What Congress Should Do This Week
This week, the Senate takes on the critical question of how to protect Americans and support the economy during the China coronavirus emergency. Our work must focus on efforts to help working Americans who hold hourly jobs, can’t telework, and can’t count on a paycheck. We must also help businesses that those workers rely on for jobs.
Over the weekend, the House of Representatives passed the Families First Coronavirus Response Act. It turns out that the administration and Speaker Pelosi were still ironing out significant differences even today. But from what we have seen already of the bill’s substance, I have serious concerns that it doesn’t go far enough to protect American families from the serious disruptions that are already occurring due to the China coronavirus.
We must do better than this, and we must be prepared to spend whatever it takes to shelter Americans from the coming storm — and very likely to spend more than the House bill proposes. But what we spend must work.
THE PROBLEM WITH THE HOUSE BILL
The House plan includes a number of valuable provisions, including free virus testing for all Americans and school lunches for children whose schools are closed. I believe these provisions could be passed by the Senate unanimously. And there must be strong liability protections for mask manufacturers working to fill the gaps created by the critical shortage of medical masks.
Unfortunately, the bill’s central effort to help Americans is designed to achieve policy goals that have been overwhelmed by events. The bill is wrapped around the axle of paid sick leave — for a limited number of American workers, no less — in an effort to maintain wage continuity. But workers who need help the most won’t benefit from the House bill’s provision for paid sick leave — in particular, those who are laid off, had their hours reduced, work in the gig economy, or who find that their employers have gone out of business.
This provision must be replaced with more ambitious and more efficient measures if we truly want to serve workers who must stay at home during this crisis. The bill expands the Family and Medical Leave Act to provide paid leave to those who must miss work to adhere to a quarantine, take care of at-risk family members, or care for children who are out of school. The bill attempts to offset the cost of this provision through tax credits and efforts to advance funds to employers. Businesses would be able to use tax payments they’ve made to the IRS to pay sick leave wages. The U.S. Treasury Department also would provide cash advances to businesses that don’t have enough tax payments to draw on.
These policies are well intentioned but needlessly complicated, at a time when simplicity and speed are paramount. They also wouldn’t help companies that are put out of business by the coming crisis — tax credits don’t help businesses with no profits, let alone bankrupt companies or their newly unemployed workers. Moreover, the administrative efforts required to claim these tax credits would be substantial and complicated.
Another serious flaw in the House bill’s sick-leave plan is that it wouldn’t cover many American workers. Employer-provided sick leave is useless to workers who have already been laid off or had their hours reduced. Additionally, the bill exempts large companies with 500 or more employees from providing any paid sick leave, which means an enormous number of workers won’t be subject to this program, while small businesses will face a federal mandate that their larger competitors do not.
This key plank of the House bill is thinking too small. Its policy objectives of “wage-replacement” and “wage-continuity” for a small portion of American workers are rapidly being overcome by global events. The Senate should think bigger.
A BETTER APPROACH
I propose a better plan: cash to workers and loans to businesses. Keep it simple, make it fast. We should:
1) send cash directly to low- and middle-income Americans to help them weather the coming storm, in the form of tax rebates;
2) adjust the criteria for programs like Unemployment Insurance (UI) and Temporary Assistance for Needy Families (TANF) and surge funding to the states, so checks can make it to needy families quickly;
3) and offer low-interest loans to businesses that need them, so that those same Americans still have jobs to return to once the crisis has subsided.
Workers and businesses deserve this more immediate and direct solution from the federal government.
First, provide checks directly to workers. Let’s cut out employers as the middle men and get relief to people not in weeks but in days. In 2001 and 2008, the government sent tax-rebate checks to nearly every household in America. We should send relief directly to American families most likely to be in need — those in the bottom and middle tax brackets — to pay for rent, groceries, childcare, and other necessary expenses, as well as to spend at local businesses that are hurting during this crisis.
Giving relief directly to Americans is a better solution than complicated sick-leave policies or payroll tax cuts, and will be more certain to go to the kinds of hourly- or gig-workers who need it most. Legislation that provided tax rebates to households most likely to be in need within days would be much more effective and immediate than complicated policies requiring significant time for implementation. Moreover, the House’s proposed sick leave policies require employment or even active work outside the home when many jobs are in jeopardy, and when staying at home is often the wisest course of action to prevent the virus from spreading.
Second, use established programs and agencies to surge support to needy Americans as we approach the worst of the economic crisis. Regulations for Unemployment Insurance and TANF should be adjusted to take into account the realities of the epidemic — for example, work requirements for TANF, and the requirement to seek work in order to receive UI, can be temporarily suspended — and money should be sent to the states to be rapidly distributed to those most in need. Those who have been furloughed or who need to stay home to look after children could qualify temporarily for UI. These programs exist to get checks quickly to needy Americans. Let’s use them.
Third, we should offer low-interest loans to businesses to get through the coming months, when our efforts to mitigate the virus will necessarily slow down the economy. Providing guaranteed, low-cost liquidity to businesses will allow them meet payroll, pay off debts, and minimize layoffs, minimizing the virus’s damage to our economy.
The cost of my plan would be very substantial, but the expense would be worth it. These measures would send a strong message to the American people that we have our priorities straight by helping working families, NOT giving handouts to special interests, or imposing new burdens at a time of national crisis.
I’ll work with any Republican or Democrat to get these measures into law. What’s essential is that we unify behind a plan that will help American families, stabilize the economy, and mitigate the spread of the China coronavirus. Let’s pass something that works for all Americans — and that actually will work as intended.
