With Congress ending its summer recess on Monday, it now falls to Democrats and Republicans from both chambers, as well as the Trump administration, to pick up talks over what a third rendition of the federal COVID-19 stimulus bill will include.
Congressional Republicans, during a press conference at the Oval Office with U.S. President Donald Trump, said they want to ramp up legal protections for businesses to protect against pandemic-related lawsuits, and payroll tax cuts and other economic incentives to encourage employers to bring back more workers.
According to U.S. Treasury Steven Mnuchin, the oft-times referred to “[Coronavirus, Aid, Relief and Economic Security Act] 3.0” will pivot the focus of the federal unemployment expansion away from paying “people more money to stay at home,” and toward having Americans “go back to work.”
Mnuchin
“We want to make sure that people who can go to work safely can do so, we’ll have tax credits that incentivize businesses to bring people back to work, will have tax credits for [personal protective equipment] for safe work environment,” he said
But the Monday announcement lacked any talk of hundreds of billions of dollars in state aid, which Congressional Democrats and many governors argue is vital for states that have seen their tax revenue crater as a result of the global pandemic.
That’s part of a version of the CARES Act—the $3 trillion HEROES Act. That measure passed the Democratic-controlled U.S. House of Representatives, and calls for a second $1,200 stimulus check, billions of dollars in aid for state and local governments, and an extension of the $600 per week jobless benefits. U.S. Senate Majority Leader Mitch McConnell, a Kentucky Republican, has dismissed the bill as a “wishlist” and “dead on arrival,” promising it would not survive in the Senate.
The $600 expansion to jobless benefits, part of the first $2.2 trillion CARES Act package from late March, is set to expire the week ending July 31. That benefits as many as 63 million Americans who’ve lost their jobs as the global pandemic plunges the nation into some of the worst economic conditions since the Great Depression.
In New Jersey, that’s led to an unemployment rate of 16.6 percent, the state’s highest jobless rate in decades.
“We don’t think any federal money should be spent [if] it gives you a disincentive to work, we want to make sure we have incentives to keep going,” U.S. House Minority Leader Kevin McCarthy, a California Republican, said on Monday.
Many business owners NJBIZ has interviewed in the prior weeks have complained that the $600 expansion discouraged employees from coming back to work—arguing they could make more while on unemployment.
But progressive activists and Democratic lawmakers have warned that many Americans will feel deep economic pain if the $600 a week is allowed to expire without a replacement.
Of the nearly $11 billion in jobless benefits paid out to 1.3 million New Jerseyans, more than half of that was through the $600 expansion.
As for business protection, McConnell added at the Oval Office press conference that “we don’t need an epidemic of lawsuits.”
The question of legal protections for business owners has become increasingly relevant in states like New Jersey, which have rolled back restrictions and allowed many employers to resume operations.
One bill introduced in May in the New Jersey Legislature would grant immunity from COVID-19 lawsuits.
That means that if you became infected, and believed you contracted it while at your place of work or a restaurant or store you visited, the bill would clamp down on the kind of legal actions you could take against a business.
President Donald Trump speaks during a rally in Wildwood on Jan. 28, 2020. – DANIEL J. MUNOZ
Trump meanwhile, has said he would veto any CARES Act bill that does not include a payroll tax cut, meaning that some or all Social Security and Medicare taxes that make up 7.65 percent of the paycheck could be waived.
“It’s been proven to be successful,” Trump said on Monday. “It’s an incentive for companies to hire their workers back and to keep their workers.”
He and Republicans have remained frosty about state aid, citing concerns states might use the money to pay for long-standing financial issues with no relation to COVID-19—such as New Jersey’s unfunded public worker retirement and health care costs.
Gov. Phil Murphy and the New Jersey congressional Democrats have warned that without the federal aid, the state would have to make steep cuts to services such as police and firefighters, teachers, health care and housing.
The governor last week approved a bill granting him the authority to borrow up to $9.9 billion to make up for losses in tax revenue, but that alone might not be enough, he said.
New Jersey is already seeing a $10 billion revenue shortfall through June 30, 2021, which could be worsened by another $20 billion through December that year, from costs to prepare for and contain the pandemic, as well as the pain from other shockwaves to the national economy.
“The next three weeks is do or die,” Murphy said at a COVID-19 press briefing Monday afternoon in Trenton. “I can’t tell you exactly what happens to our services or our finances without the federal cash, but it’s ugly.”
