A CORONAVIRUS RELIEF PROPOSAL
Getting America
Back to Work
April 3, 2020
America now faces the greatest economic crisis in living memory. Last month, the economy shed 20.5 million jobs, more than double the number lost during the 2008-2009 financial crisis. The official unemployment rate now stands at 14.7 percent. Many states are poised to begin the slow work of reopening their economies in the weeks to come, but they do so facing uncertain prospects. Consumption patterns for the industries most affected by the coronavirus lockdowns are unlikely to return to normal in the short term, and we may soon see the ripple effects in comparatively unaffected industries.
Workers and businesses are in a bind. They can’t remain frozen in place for a year, but they lack the financial security they need to restore operations in an uncertain environment. Without further federal action, America’s reopening will stall. Congress must act now to provide the economy the scaffolding it needs to reopen and build the growth curve back up.
“Our economy will continue to hemorrhage unless Congress gets serious about ways to rehire workers and get Americans working again. That’s the urgent need, and that’s the focus of our plan.”
Senator Josh Hawley
“I think we need to protect every single job
in this country until this emergency passes.”
This pandemic also exposed a Grand Canyon size fault in our supply chain. We don’t make critical products in America anymore. It’s a threat to our health, our national security and our economy. Americans have long known about this problem. Washington is just waking up to it, and Wall Street was hoping it wouldn’t get caught. It’s time to fix it. We need to invest in America again and protect our people. The goal is simple – If we need it, we should make it.
If we pursue policies for continuous employment combined with bringing our supply chains back, it will super charge a recovery. Policymakers must act now to ensure that the present crisis is the gateway to a stronger American economy. It’s time to get America ready for a comeback.
Rehire America
To overcome challenges with uncertain revenues and possible worker reluctance to fully join the workforce again, Congress should provide wage support through the end of the year for businesses facing revenue shortfalls:
To help businesses staff up and get unemployment down, the federal government should provide temporary payroll support of 120 percent of a rehired employee’s wages, capped at $50,000 per employee. This would help businesses offer temporary wage increases to rehired workers to offset the difference between prior wages and pandemic unemployment. This temporary bonus should also cover newly hired workers to allow businesses that have survived the lockdowns to hire workers laid off from businesses that cannot reopen.
Any changes to the accounts of the Social Security and Medicare trust funds resulting from the delivery of this support via the payroll tax system would be fully offset through general revenue transfers, holding our nation’s retirement programs harmless.
Similarly, for businesses with revenue shortfalls, the federal government should pay up to 80 percent of wages for each worker currently on payroll, capped at $50,000 per employee and remitted to employers on an advance basis. Payroll support would be delivered through the payroll tax system as a “negative” payroll tax.
“Rehire America proposes a flexible program to meet the evolving needs of businesses and help American workers get through this crisis. More must be done, and we must think big as we continue to search for solutions to help the American people through this pandemic.”
Senator Cory Gardner
Turning on the Lights
Businesses can’t rehire their workers if they can’t pay their bills, and for many industries the road back to normal could be a long one. In addition to payroll support, Congress should provide businesses grants applicable to rent, utilities, mortgage interest, and other fixed costs based on historic revenues.
In addition to these fixed costs, businesses operating in the pandemic economy need financing to make the substantial investments necessary to keep their workers and customers safe, attract new customers, and experiment with new business models. These investments will help not only to make these firms more productive but also to fuel demand throughout the economy as consumer demand slowly ramps up. To further induce businesses to reopen and rehire, Congress should provide an additional reinvestment credit offsetting these business investment costs.
Eligibility
These new credits should be made available to businesses of all sizes, including small businesses that have received Paycheck Protection Program loan forgiveness once they have exhausted that support, so long as they have experienced revenue declines of 20 percent or greater. Support will be capped at the level of a business’ revenue losses. To ease administration of the credit, verification of revenue losses and reconciliation of overpayment will occur in 2021 for small and mid-size businesses.