“Our economy will continue to hemorrhage unless Congress gets serious about ways to rehire workers and get Americans working again. That’s the urgent need, and that’s the focus of our plan.”
Senate Majority Leader Mitch McConnell doesn’t appear to be in any hurry to ensure Americans hurt by the coronavirus crisis get the economic help they need. But two members of his own caucus have bucked his position and instead have seemingly aligned themselves more closely with Democrats by proposing one of the most “radical” coronavirus relief efforts to date.
The proposal introduced by Sens. Josh Hawley of Missouri and Cory Gardner of Colorado calls for the federal government to cover workers’ salaries by subsidizing businesses’ payrolls during the pandemic. They argue such an effort would incentivize companies to rehire workers who have been laid off and keep other workers on payroll.
Hawley first proposed his “Rehire America” plan in early April and has since been promoting the idea to other members of his party. Gardner on Thursday became his first convert, signing onto the legislation, even as McConnell and other Republican leaders have publicly said they feel no urgency to pass another coronavirus relief bill. Gardner, who is up for re-election in November, made clear that he believes Americans need more help.
“Without additional support, it’s possible that many jobs will never come back and many businesses will never reopen,” Gardner said in a statement. “More must be done, and we must think big as we continue to search for solutions to help the American people through this pandemic.”
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Roughly 36 million Americans have filed for unemployment benefits during the coronavirus pandemic, and the national unemployment rate is 14.7%, the highest level since the Great Depression. Low-wage earners have been hit particularly hard, as 39% of people working in February with a household income below $40,000 reported a job loss in March, compared to only 13% in those making above $100,000, according to a report from the Federal Reserve.
Under Hawley and Gardner’s proposal, the federal government would provide temporary payroll assistance of 120% of a rehired employee’s wages, capped at $50,000 per employee. The temporary bonus pay is intended to give companies an incentive to bring back workers and compensate employees for some of the pay they lost while unemployed. The plan would also require the government to help businesses suffering from revenue shortfalls by covering up to 80% of wages for each worker currently on payroll, capped at $50,000 per employee. Both forms of assistance for companies would last through the end of the year.
“Our economy will continue to hemorrhage unless Congress gets serious about ways to rehire workers and get Americans working again,” Hawley said in a statement on Thursday. “That’s the urgent need, and that’s the focus of our plan.”
Their effort mirrors one from an ideologically disparate group of Democrats including: Rep. Pramila Jayapal of Washington, Sen. Bernie Sanders of Vermont, Sen. Doug Jones of Alabama, and Sen. Mark Warner of Virginia.
The Democrats’ plan, championed by Jayapal, would guarantee the salaries of workers earning up to $90,000 for as long as six months. It would benefit more than 36 million workers, according to an analysis by Moody’s prepared for her office. Jayapal fought for the Paycheck Guarantee Act to be included in Democrats’ $3 trillion coronavirus relief proposal released Tuesday, but it did not make it into the bill.
In an interview with the New York Times on Wednesday, Jayapal said her proposal—which has the support of more than 60 House Democrats and a coalition of union leaders, advocates, economists, and public policy professionals—had “broad support” and “should be taken seriously.”
“What are we waiting for? Are we waiting for unemployment to reach 50 percent?” she said.
Jayapal and supporters of her bill argue that simply sending Americans another $1,200 check—as the House Democrats’ plan would—is not enough to address the scope of the economic devastation. They also say that it would help workers stay on their employer-provided insurance plans, averting the potential catastrophe of tens of millions of newly uninsured Americans.
House Speaker Nancy Pelosi has not fully embraced the idea, but acknowledged in an interview with MSNBC last month that much more needs to be done to “put money in people’s pockets,” and said a minimum income or guaranteed income might be worthy of discussion.
McConnell and fellow Republicans, meanwhile, have outright rejected the proposals. Rep. Steve Scalise of Louisiana called guaranteed income a “radical, socialist idea” and said Congress should focus on implementing the already-passed relief bills, such as the CARES Act.
Hawley and Jayapal’s ideas, of course, are only viewed as radical in the U.S. Governments in Denmark, France, Ireland, and the United Kingdom, among others, have implemented similar efforts to help stave off mass unemployment. They appear to be working, too. In Denmark, for example, the unemployment rate rose to only 4.2% in March, up from 4% in February. April numbers are not yet available.
In the United States, meanwhile, the White House expects the unemployment rate to surpass 20% by June. Hawley, Gardner, and Jayapal argue that things could get even worse, unless action is taken.“This crisis will not end on its own,” Jayapal tweeted on Thursday. “A paycheck guarantee will put workers back on their payroll and back on their health care while helping businesses.”