March 17, 2020

Coronavirus Aid Package

“The U.S. House of Representatives overwhelmingly passed a coronavirus aid package early on Saturday that would provide free testing and paid sick leave [for employees of companies with fewer than 500 employees].” Reuters

Many on both sides criticize excluding large companies from the paid leave requirements and urge Congress to approve direct cash payments.

“These policies represent steps in the right direction, but… the bill is inadequate. The paid sick leave requirement is troubling, even. As it stands, this policy exempts almost every major corporation and company, since the only employers affected are those with 500 or fewer employees. That’s less than 20% of the workforce.”
Kaylee McGhee, Washington Examiner

Big employers like McDonald’s and Amazon are not required to provide any paid sick leave, while companies with fewer than 50 employees can seek hardship exemptions from the Trump administration… The House’s failure to require universal paid sick leave is an embarrassment that endangers the health of workers, consumers and the broader American public.”
Editorial Board, New York Times

Sen. Tom Cotton (R-AR) writes, “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…

“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.”
Tom Cotton, Medium

“Fighting the virus means stopping economic activity. The fiscal response thus cannot be to restart economic activity, at least not yet. In 2001, George W. Bush told the nation: ‘Fly and enjoy America’s great destination spots. Get down to Disney World in Florida. Take your families and enjoy life, the way we want it to be enjoyed.’ Doesn’t really work today, does it? This, then, is a moment for stimulus policy by Occam’s razor, the notion that the simplest solution is often the best one. We need to temporarily transfer a lot of money to a lot of households and businesses. For households, the simplest way to do so is with direct checks, a policy that has been effective in three past recessions.”
Jared Bernstein, Washington Post

Other opinions below.

See past issues

From the Left

“The crux of the disagreement about paid sick leave has been pretty consistent over the years: Republicans think these programs force small businesses to cover costs that will be detrimental to their operations. They’ve also generally chafed at any additional government intervention in the way that businesses operate such programs. The House coronavirus bill, though, accounts for these expenses and includes a tax credit for businesses that offer workers paid sick days. [Senate] Republicans, however, are continuing to voice objections despite the urgent nature of this legislation and the concessions that have already been made… The House has worked through its deal with Mnuchin and now it’s up to the Senate to pass it.”
Li Zhou, Vox

“The text of the bill suggests that it is intended primarily for workers whose unemployment is directly attributable to illness at their workplace or government quarantine—not for, say, restaurant waiters or theater employees whose hours are cut…

“Those thrown out of work by Covid-19, and, and especially those in already precarious economic straits, need emergency home pay—ideally full replacement wages that allow them to stay at home, support their families, take care of kids who are out of school, and stay safe during this emergency without going bankrupt. Congress will have to appropriate much more than what they’re planning on setting aside for coronavirus-related unemployment—or mandate that employers cover the cost as a condition of receiving other assistance.”
Mark Engler and Andrew Elrod, New Republic

“The fact that a conservative Republican is proposing unrestricted cash payments during a GOP administration — in which even heavily regulated government programs like food stamps are under attack — is notable. And Romney is not alone in this. Sen. Tom Cotton (R-AR), one of the most conservative members of the Senate GOP and a likely future presidential contender, went on Fox & Friends on Monday morning to call on Congress to dispense with complicated mechanisms like tax credits and instead put ‘cash in the hands of affected families’…

“Some Democrats not in leadership have also been pushing their own versions of this idea. There is already a cash bill in the House from Democratic Reps. Tim Ryan and Ro Khanna that would give at least $1,000 to every American making under $65,000, and as much as $6,000 to some families with children. But the involvement of conservatives in this effort is a remarkable turnaround… It’s extremely heartening that in a time of extreme partisan polarization, even conservative Republicans are putting aside their normal opposition to unrestricted cash welfare because they know it’s needed during this crisis.”
Dylan Matthews, Vox

From the Right

Rep. Chip Roy (R-TX) writes, “The bill purports to help people by putting a massive mandate on small and medium-sized businesses while perpetuating the K-Street Corporate welfare cronyism Americans are sick of – exempting businesses over 500 [employees]. Worse yet, the mandate was to be paid later through tax credits, and the tax credits would not even cover it all…

“I suggest… offering very expansive and immediate small business loans, and other measures to keep businesses afloat through the negative impacts of government calls to stay home. Due to the action and recommendation of government leaders of all levels, we are facing massive slowdown for restaurants, retail, the arts, travel, hotels, and more. It is fully and wholly unsustainable for most. Therefore, we have a duty to find ways to inject capital and help them stay afloat.”
Chip Roy, The Federalist

“Most spending in the bill is intended to mitigate financial hardship, and relief in a crisis is a proper role for government. States will be able to request federal approval to dole out emergency food stamps and waive work requirements. Most provisions expire at the end of this calendar year or when the public health emergency declaration is lifted, but the political temptation will be to make them permanent…

“[Furthermore] most people won’t need more than a month or so to cope with illnesses, and 12 weeks of job-protected leave will make it harder for employers to cope with prolonged absences. Small businesses and franchisees are also worried that the tax-credit scheme could mean delayed payments and cause a cash crunch that forces them to lay off workers immediately… What makes more sense is Wisconsin Sen. Ron Johnson’s idea to let workers who must take prolonged absences apply for unemployment benefits. Direct federal payments are better than a mandate on business and a complex tax credit that will be hard to remove once in place.”
Editorial Board, Wall Street Journal

Some argue that “Congress is already working overtime to lessen the economic impact of this crisis. They’re extending unemployment benefits for the duration of the epidemic, paying for extended sick leave for workers, and even offering food aid to low-income families with children who may be missing meals at school. I rarely get the opportunity to say this, but even I have to admit that both Congress and the President have worked together quickly to take concrete action to help those most adversely affected by the economic impacts caused by the coronavirus outbreak…

“Unless and until we see that the impact of these relief measures isn’t enough, there’s no need to cut our own throats with a trillion-dollar boondoggle like [universal basic income].”
Jazz Shaw, Hot Air

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