Guaranteed income? What Congress is considering for new coronavirus package
Suppose you’re laid off but could still get all or most of your salary anyway?
It’s an idea being pushed by a group of liberal Democrats as well as a conservative Republican.
Rep. Pramila Jayapal, a Washington Democrat who co-chairs the House Progressive Caucus, is leading an effort to have the federal government give businesses money so they can pay employees the equivalent of up to $100,000 of their annual salary for at least three months.
Sen. Josh Hawley, a Missouri Republican with potential White House aspirations, has rolled out a proposal for the federal government to cover 80 percent of each worker’s payroll cost up to the national median wage, regardless of size. The federal Bureau of Labor Statistics reported in January the median was $39,000 a year.
Congressional leaders are discussing a new economic aid package, likely to be focused on additional aid for businesses, hospitals and state and local governments.
While the guaranteed income ideas are unlikely to be included in the next legislation, which could be considered as soon as next week, there is more and more talk about some sort of ongoing payment to people feeling the sting of the sudden economic downturn.
The guaranteed income plan is being implemented in Great Britain, which is paying 80% of the wages of people who can’t work because of the coronavirus outbreak, up to 2,500 pounds a month, or $3,110.
In this country, the Payroll Protection Program enacted last month offers small businesses forgivable loans that would allow them to maintain payroll as well as pay rent and utilities.
The Jayapal proposal would provide 100% of wages for workers earning annual salaries of up to $100,000, and keep them enrolled in employer-sponsored benefits, including health care, for three months. Self-employed workers and independent contractors would be eligible.
If the economic downturn persisted, the program would be renewed each month. The plan does not specify how it would be paid for.
Hawley’s plan would allow firms that hired back laid-off workers to be eligible to receive the benefit he proposes..
“The goal is to protect the job of every worker. The proposal does not call for size thresholds,” Hawley’s spokeswoman Kelli Ford said in an email to The Kansas City Star, referring to the restrictions on payroll aid in the law adopted last month.
“This is because a worker who is laid off from a mid-size firm of say 501 employees needs just as much help as a worker laid off by a small business. It’s also important to avoid complicated eligibility criteria that requires businesses to consult with lawyers and bankers to find out if they qualify,” Ford said, noting the rocky roll-out of the paycheck protection program, which effectively left banks to decide whether to accept a business’ application.
Ford said Hawley has pitched the idea to lawmakers of both parties and the White House. He’s also promoted it on Fox News, a favorite channel of President Donald Trump, and in a guest column for The Washington Post.
She maintained that the plan would save taxpayer money by reducing the need for spending on unemployment benefits and industry bailouts.
“Regarding cost, this program would stem layoffs and prevent workers from going on unemployment benefits in the first place. With more workers on payroll and more firms staying in businesses, this also means the taxpayer does not need to spend money on future bailouts,” Ford said.
“All of these factors will help to offset the program’s cost. Instead of a patchwork-style process, this is a smarter use of resources—and better for workers and their families.”
Jayapal, too, noted “a paycheck guarantee will enable a speedier recovery and reduce the ultimate cost of the crisis to taxpayers by keeping people employed.”
Sen. Roy Blunt of Missouri, a member of Senate GOP leadership, said he’s read about Hawley’s proposal but has not spoken to him about it in depth.
He said Congress’ first priority should be making sure the recently approved bill is implemented effectively.
Jayapal said her plan would help ease the problems caused by an unemployment benefit system that’s been crushed in state after state by the volume of calls and inquiries.
“Workers would not be forced to apply for unemployment insurance, overwhelm that system and then have to once again find a job,” she said. “Businesses of all sizes would be able to keep workers on payroll and benefits — and be able to quickly re-open — partially or fully — without having to rehire and retrain their workforce.”
Under the current economic aid plan, most adults will receive a $1,200 federal payment starting this month, plus $500 for dependent children.
Jayapal and others have long argued that the one-time payment is hardly enough should the economic downturn persist and have argued for ongoing payments in such a case.
Jayapal is leading a bid to guarantee immediate, monthly payments of up to $2,000 per income-eligible adult and another $1,000 for families with children for up to six months.The payments could be extended for six more months if the economy remained stuck.
This story was originally published April 10, 2020 at 7:40 PM with the headline "Guaranteed income? What Congress is considering for new coronavirus package."
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