Coronavirus bill warned by GOP critics could fuel layoffs

Coronavirus bill warned by GOP critics could fuel layoffs

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A provision in the 2 trillion dollar response package against coronaviruses that Republican senators had warned could fuel layoffs appears to remain in the text – after an 11-hour effort to remove it from the Senate was shot.

Republican sense Lindsey Graham and Tim Scott, both from South Carolina, Ben Sasse from Nebraska and Rick Scott from Florida reported what they described as a “massive drafting error” that could have “devastating consequences”.

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The problem is that the current version could pay workers more unemployment benefits than they currently receive, adding a payment of $ 600 per week in addition to regular benefits which are calculated as a percentage of income. This could further disrupt the job market, lawmakers warned.

“Unless this bill is resolved, employees are strongly encouraged to be laid off instead of going to work. This is not an abstract and philosophical point – it is an immediate and real problem, “said Tim Scott, Sasse and Graham in a statement.

Tim Scott gave the example of someone in South Carolina earning $ 20 an hour, or $ 800 a week, who could receive up to $ 326 in unemployment benefits in the state, followed by an additional $ 600 a week in federal benefits, which means they would earn more than their normal wages.

Critics of their position noted that the rise in unemployment would currently expire during the summer, the more one can not quit his job voluntarily and then claim unemployment. Others have suggested that this could be resolved by employers raising wages.

But senators have warned that introducing such powerful incentives into the economy at such a crucial time could further boost the economy.

“Do you want to destroy what is left of the economy? Spend it as it is written,” said Graham. “If you want to help people, pay them their wages, but don’t pay them more for not working.”

It was a position supported by conservative groups such as the Heritage Foundation.

“As currently drafted, the CARES law will cripple the economy by pushing people away from their employers and into unemployment insurance,” said Paul Winfree, director of the Roe Institute for Economic Policy Studies from Heritage. “It will end up hurting workers who are better off staying attached to their jobs, so that when the pandemic subsides, we can all get back to work as quickly as possible.”

Sasse presented an amendment on Wednesday that would limit unemployment benefits to 100% of someone’s salary. It took 60 votes in the upper house but only garnered 48 votes against the opposition mainly Democrats but also Republicans.

This opposition was summed up by Senator Bernie Sanders, I-Vt., Who even threatened to suspend the bill on the matter “until more stringent conditions are imposed on the $ 500 billion social welfare fund to ensure that any business receiving financial assistance under this law does not fire workers, reduce wages or benefits, send jobs abroad, or pay wages to workers.

Republicans have always voted for the bill – given the urgency of the overall economic situation – but have maintained their objections to this part of the bill.

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“The bottom line is that the good in the bill outweighs the bad, and especially this provision which I thought was bad,” said Senator Tim Scott on Fox & Friends.

Their concerns were echoed by Republicans in the Democrat-controlled House, where making changes that would limit unemployment faces an even greater obstacle than the effort in the Senate.

“Yes, it is a problem,” minority leader Kevin McCarthy told reporters on Wednesday. “It is not a time, when all of America is trying to come together, that someone should benefit from it and receive a higher payment than they actually earn while they work taking money from them. ‘a taxpayer to pay you. “

“I don’t think an American would really want this, so why don’t we just fix this bill so that it doesn’t happen?” he said.

But, with most lawmakers agreeing that time is running out, and with leaders trying to keep all their caucuses under control and on board for the huge package, it seems likely that Republicans will not make an effort long-term remedy, since he would likely be dead when he arrived in a House vote.

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Currently, the House plans to vote on the bill on Friday in a voice vote, partly as a security measure – which would make a long struggle against the law unlikely.

“In order to protect the safety of deputies and staff and to prevent the spread of COVID-19 during the travel of deputies, the Republican leader and I hope that the vote of the Assembly on the final passage will be by vote vocal. MPs who wish to come to the House to debate this bill will be able to do so, “said Majority Steny Hoyer in a letter to colleagues, adding that there would be a chance to debate if necessary.

Gregg Re and Chad Pergram of Fox News contributed to this report.

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