Legislate in haste, repent at leisure. The rush to get a $2 trillion coronavirus relief package to a vote hit its first major road bump this afternoon after three Republican senators objected to language regarding the expanded unemployment benefits. The provision is so generous, they claim about the existing language, that it would incentivize employers to lay off employees — the exact opposite effect the bill intends.
Is this just an excuse to oppose a massive cash dispersal? “None of what we’re here to talk about today,” Sen. Ben Sasse told reporters this afternoon, “is about a price tag.”
INBOX: Scott, Sasse and Graham oppose fast-tracking coronavirus bill over provision they say incentivizes workers to be laid off. pic.twitter.com/GOdNqVFsP7
— Kyle Cheney (@kyledcheney) March 25, 2020
“If this is not a drafting error then this is the worst idea I’ve seen in a long time,” Graham said. Under the deal worked out with Democrats, jobless individuals would receive $600 a week for four months on top of their regular unemployment compensation, which varies by state. In South Carolina, the maximum benefit is $326 per week, so for four months an individual could get paid the equivalent of about $49,000 a year or $24 an hour, Graham said.
“I think we’ve done absolutely the worst thing we can do to stabilize the economy. We’ve incentivized people not to go back to work,” he said. “Every employer in the state has to compete with a $24 an hour minimum wage now I guess.”
The good news would be that this was indeed a drafting error. If so, it would be easy to fix it, either in the text of the bill now or in an amendment, as Sasse suggested. Unfortunately, this does not appear to be a drafting error, but instead a deliberate choice in order to make benefit assignment more efficient:
But a Senate Finance Committee Democratic aide not authorized to speak on the record about the issue said trying to limit a benefit increase to a worker’s full salary presented logistical problems. “The administration made clear that state unemployment offices did not have the technological capability to calculate wage replacement on an individual basis, which is how we came to the bipartisan agreement on a $600 increase per week in benefits,” the aide said.
Businesses taking special forgivable Small Business Administration loans under the aid package would find themselves with a shortage of workers to rehire when they open back up, critics said. And Graham argued it could actually remove health care workers like nurses from the frontlines because they’d be better off financially taking unemployment.
Wait a minute, some might object, you can’t get unemployment if you quit your job voluntarily. Actually, according to the language in one draft, you can — as long as you “self-certify” that you quit because of the coronavirus:
— Phil Kerpen (@kerpen) March 25, 2020
And that’s one of the big problems with this approach. If people can draw unemployment after quitting on their own, not only will that drain people from the workforce, it will make employers leery about hiring any new workers to replace them. Providing those incentives promises to create chaos over the next four months that they will be in effect.
So why not just fix them? For one thing, the money’s needed right now, Mitt Romney argues:
We can't afford to wait any longer to send relief to those who need it. The Senate’s #COVID19 relief package supports workers, families, and businesses across the country. The Senate and House should pass this bill now and get it to the President’s desk. https://t.co/hXc3Auv0Zp
— Senator Mitt Romney (@SenatorRomney) March 25, 2020
As I said … legislate in haste, repent at leisure, although that’s meant as a warning rather than a recommendation. For another, changing this will create opposition on the other side of the aisle. Bernie Sanders pledged to block the bill if the language got changed:
Unless Republican Senators drop their objections to the coronavirus legislation, I am prepared to put a hold on this bill until stronger conditions are imposed on the $500 billion corporate welfare fund. pic.twitter.com/7X0o9C4BoO
— Bernie Sanders (@SenSanders) March 25, 2020
This threatens to extend the fight over the bill for days, perhaps with Nancy Pelosi holding it up in the House if these changes get made, too. For everyone outside the Beltway, it’s just another example of how Congress can’t handle its business, either under normal circumstances nor even a crisis when the economy might crash around them. In my column at The Week, I argue that the credibility crisis for self-governance and legislating might be even more acute than the pandemic or the economic disaster fast approaching:
In this situation, the parameters of this massive relief package matters less than Congress’ credibility in dealing with a crisis. Thus far, the response has been far from confidence building, especially with an electorate whose faith in institutions had fallen sharply over the previous few years. Voters expect Congress to act in a crisis, not get stalled by partisan bickering and then literal absence. A failure to act here could have enormous political as well as economic consequences and call the whole idea of a co-equal legislature into question. …
At this point, the nation needs to take action to prevent panic and despair from turning a short-term problem into a long-term disaster. A functional Congress and White House can fine tune the approach as it goes, adding to what works and shifting resources away from what does not.
In order for that to succeed, Congress has to become functional again and re-instill confidence in its ability to deal with crises. This agreement may not be perfect, and it may not even be great, but inaction and gridlock would be far worse than whatever problems this agreement might cause down the road. Voters are watching intently to see whether they can trust our public institutions at all, and the consequences of their failure at this junction might be far worse than the virus or the economic damage it does.
Thus far, their performance to these metrics has not been impressive.