Tag Archives: coronavirus impact on economy

Coronavirus Pandemic, Democrats 2020, Economic Policies, Economy, Employment & Labor Issues, News & Photo Features

Biden Offers Plan to Scale up Unemployment Insurance

As the unprecedented number of Americans filing unemployment claims rose once again, Joe Biden, the presumptive Democratic candidate for president, announced a new plan to transform unemployment insurance into Employment Insurance for millions of workers by getting all 50 states to adopt and dramatically scale up short-time compensation programs (c) Karen Rubin/news-photos-features.com.

As the unprecedented number of Americans filing unemployment claims rose once again, Joe Biden, the presumptive Democratic candidate for president, announced a new plan to transform unemployment insurance into Employment Insurance for millions of workers by getting all 50 states to adopt and dramatically scale up short-time compensation programs.

Vice President Biden released the following statement on today’s unemployment claims and his new plan on scaling up employment insurance:

Today, we learned that another 5.2 million people have filed unemployment claims, bringing the total to more than 22 million in the last month.

This dire economic dislocation stems from the need to protect public health through strong social distancing measures. But let’s not forget: these measures are required to the extent they are because we didn’t prepare early enough, and when the virus surfaced in our communities, we didn’t test sufficiently to contain it. This pain is a product of poor decision making by Donald Trump.

With true American spirit, workers did not hesitate to sacrifice to save the lives of fellow citizens. But even as we temporarily shrink economic activity, there’s no reason why the incomes of working people must shrink, too.

As we navigate this crisis, our paramount economic priority must be to make American workers whole, so they retain their income and benefits during this period of social distancing. For the workers that are laid off, we should swiftly compensate for lost wages and health benefits for all of them, not just those who can make it through the bureaucracy. 

But we should also be doing more — much more — to reduce the number of people who are laid off in the first place. We should be committed to keeping as many people as possible attached to their employment, so they can easily return to work when appropriate, and maintain their income and benefits.

This is more than just the right thing to do — it is the surest road to a rapid recovery, because the faster everyone returns to their jobs, the faster we can improve demand and get our economy running again. 

The Trump Administration has been given a number of extraordinary tools to make this happen — to keep people employed. Yet, they are failing to use them effectively. For more people to stay in their jobs, Donald Trump has to do his job. 

As this crisis continues to unfold, I will be putting forward ideas to not only better address the immediate needs of working Americans, but also what is needed for long-term, structural reform to make our economy work for all its people.

So today, as we see these chilling numbers of job losses — each one a mother or father, a neighbor or friend, a proud, hardworking American — I am calling for a bigger and bolder approach to keeping people on the job in times of crisis. That idea is called “short-time compensation” or “work-sharing.” I call it Employment Insurance.

The Biden Plan to Scale Up Employment Insurance by Reforming Short-Time Compensation Programs

Transform unemployment insurance into Employment Insurance for millions of workers by getting all 50 states to adopt and dramatically scale up short-time compensation programs. Under short-time compensation — also known as work sharing — firms in distress keep workers employed but at reduced hours and the federal government helps make up the difference in wages. The Obama-Biden administration championed this approach in the U.S., and so far 27 states have established short-time compensation programs.
 
These programs must become more flexible and attractive to both employers and employees, so that as many workers as possible can remain attached to their jobs and receive full wages and health benefits during crisis times, even if employers must significantly cut their hours.
 
Germany has long used short-time work programs to protect jobs in recessions, so that workers are ready to hit the ground running as the economy improves. And this approach is especially well suited to the current moment, when we can expect a more gradual recovery in certain sectors, with some businesses operating a partial capacity for an extended period.
 
In short, we should start thinking of this as Employment Insurance more than Unemployment Insurance.
 
For the current crisis, the administration should move rapidly to scale up short-time compensation to save or restore millions of jobs. Specifically:

Small businesses who use this program must be able to get help to cover their worker’s benefits as well as their other costs, like rent and non-payroll overhead, as they are partially shut down through the crisis. Companies that fulfill the goal of payroll protection by using work sharing should not be punished by being excluded from any small business program for loans or forgiveness that is tied to essential overhead in proportion to their fall in revenues.

The federal government should temporarily waive the need for states to “experience rate” companies, that is, force employers to pay higher taxes in the future if they use short-time compensation now.

These are crisis measures, but we can and should do more to strengthen short-time compensation to prevent layoffs in future downturns, learning lessons from other nations and from those states in America that have been leading the way.
 
As President, Joe Biden would pursue permanent reform of short-time compensation, through the following steps:

Establish 100% federal financing: Currently, states bear the burden of paying for short-time compensation, except in emergencies. Yet, state unemployment funds are already straining under the burden of unprecedented numbers of unemployment claims. Joe Biden would call for short-time compensation to be 100% permanently funded by the federal government to catalyze far greater use of short-time compensation that can keep workers working and connected to their benefits and work relationships.

Secure participation from all 50 states, DC, Puerto Rico, and the Virgin Islands: 23 states still have not established short-time compensation programs. This initiative is too important to leave out millions of Americans. Joe Biden would make it a top priority, using a mix of conditioned assistance and additional incentives, to ensure universal participation, consistent with Supreme Court precedent in Dole and Sebelius.

Create a tax credit for employers’ extra health care costs: Employers must currently provide full health benefits for employees even if they are reducing hours. While it is crucial that employees keep their full benefits, having to fund the full health care costs of workers when they are seeing a significant fall in revenue can discourage companies from choosing short-time compensation over layoffs. Joe Biden would create a refundable tax credit that would reimburse companies as well as non-profits for the extra costs of providing full health benefits of all their workers during a period of work hour reductions.

Raise caps on employer work reductions: States usually cap work hour reductions at 40% to 60%. If your hours go down more than that, you can’t participate. In deep downturns, companies may need to reduce hours even further to prevent layoffs. Raising those caps to 80%, with waivers for extreme circumstances, will help employers keep people in their jobs, even in severe recessions.

Launch a major awareness campaign to improve business participation rates. During the last recession, Rhode Island had much greater participation in its short-time compensation program than the national average. One study from the Brookings Institution found that the chief reason for that was that the state “aggressively marketed work sharing to employers engaged in layoffs during the Great Recession and made use of the media to highlight potential work-sharing benefits.” Joe Biden would take a Rhode Island-style marketing campaign nationwide.

Build automatic triggers based on economic and public health conditions. Enhancements to short-time compensation and unemployment insurance tied to the COVID-19 crisis should be automatically extended based on economic and health conditions, and renewed in future crises. Workers and businesses should not be held hostage by partisans in Congress.

Coronavirus Pandemic, Donald Trump, Economic Policies, Economy, Election 2020, Health Care, News & Photo Features

The Biden Emergency Action Plan to Save the Economy From Coronavirus Pandemic

Vice President Joe Biden offers his own plan to address the coronavirus pandemic that contrasts with Trump’s: “It would be catastrophic to reopen everything without a plan, and then have a spike in cases and shut it all back down. That would just mean more loss of life and economic pain.” © Karen Rubin/news-photos-features.com

So far, Donald Trump has failed to lead – he has begrudgingly followed when shamed into acting by Governors like Cuomo, Newsome yet still manages to take credit for the “boldest” “greatest” “historic” “unprecedented” actions for which he had no input. Trump is taking credit for a $2 trillion aid package that contradicts his own plans to bail out the Oil & Gas industry and give Treasury Secretary Mnuchin unlimited power to steer billions of dollars to friends, while his EPA and Interior Department race to institute rules that overturn Obama-era rules to reduce carbon emissions that contribute to Climate Change; there is even a provision in the bail-out specifically barring funds to go to Trump’s own businesses because of his record of using his office for self-enrichment, in violation of the Emoluments Clause. Trump’s daily briefings have been turned into substitutes for his campaign rallies, where he gets to attack “enemies” (The Press) and spout lies designed to boost his approval and chances for election. Democratic challengers Joe Biden and Bernie Sanders don’t have the same bully pulpit, but have nonetheless attempted to draw stark contrasts in how they would lead the nation out of this coronavirus pandemic, which, in fact, could be continuing into the next president’s administration. This is from the Biden campaign: — Karen Rubin, News & Photo Features, [email protected]

Tonight, Joe Biden is releasing an emergency action plan to save the economy, laying out three key steps he would take as president to tackle the ongoing pandemic and safeguard our country’s economic prosperity. In a new video speaking directly to Americans, Vice President Biden outlined his emergency action plan and highlighted the immediate, impactful steps that can be taken to defeat the virus and protect the livelihood of working families.

FACT SHEET:
The Biden Emergency Action Plan to Save the Economy

Congress is close to passing a massive relief bill. When it passes, it’s all about execution — and filling in the gaps.
 
If Joe Biden were President right now, here are the three things he would do now to save our economy and help our families weather the storm.  And to get them done, he would appoint a task force reporting twice-daily to him on progress.
 
FIRST, use all available authorities, including the Defense Production Act to turn the tide on this epidemic. Joe Biden knows that no economic strategy will work if we don’t stop the virus. In recent days, there’s been talk that we have to choose between public health and our economy. That’s not just a false choice. It’s a dangerous one.
 
It would be catastrophic to reopen everything without a plan, and then have a spike in cases and shut it all back down. That would just mean more loss of life and economic pain.
 
To reopen, public health experts say we need real testing capacity, the ability to trace contacts if someone tests positive, and the ability to surge equipment and supplies to any new hotspots. We should listen to them. It’s the quickest, surest way to getting our economy back on track. And we also need to address the shortage of items like ventilators and personal protective equipment for health care workers, and make sure our workforce on the frontlines everyday has the protections to provide the essential services we will continue to need.  Joe Biden would use the full powers of the presidency and this government to make that happen. 
 
Joe Biden would end this epidemic and get our economy back on track through bold action — not by picking an arbitrary date on the calendar and asserting it’s over.
 
SECOND, launch a task force reporting directly to me to make sure every dollar going out the door gets to the people who need it — fast.
 
Joe Biden led the implementation of the Recovery Act in the last crisis.  He knows it’s all about priorities. Here would be his:

  • Keep as many people on the payroll as possible and make Americans whole for lost hours and wages. Joe Biden would expedite aid to businesses who commit to helping workers stay employed through the crisis, so they can get back to work when conditions allow.  He would maximize work-sharing, a form of “employment insurance” we championed in the Obama-Biden administration to keep more workers on the job. And for those who do get laid off and who’s industries are out of work, the congressional bill boosts unemployment benefits — Biden would cut through the red tape to deliver them without delay, and extend them as long as public health and economic conditions call for it.
  • Act decisively to keep small businesses in business. Included in the legislation before Congress is $377 billion for small businesses. This money will guarantee immediate loans that banks provide to small businesses to make payroll, pay rent and other costs, and keep their doors open. But there is a real risk it won’t get out fast enough to make a difference.  So Joe Biden would take unprecedented measures to get it done  Where the government is guaranteeing loans, banks have no commercial excuse for not making them. So he would call in bank CEOs and tell them that in this time of crisis, it is a matter of the utmost national interest to get these loans out the door quickly and efficiently. And if they don’t, he would seek authority similar to the Defense Production Act to make sure their lending platforms are giving priority to small business. He would also make clear that $377 billion is not a cap — we will spend whatever it takes. 
  • Enforce real conditions and oversight on big corporations.  Joe Biden would tell large companies seeking taxpayer assistance that they need to make hard commitments that the assistance will go toward their workers, not toward enriching their CEOs or shareholders. He would hold the strictest line on bans on buybacks and raises for executives. He would impose the highest scrutiny on payroll plans. And he would impose strict oversight and enforcement of these conditions by appointing strong regulators focused on corporate accountability and worker protections in the event of bankruptcy. Joe Biden will not let companies off the hook, the way the White House and Senate originally proposed.

THIRD, bring the leaders of Congress together to build the next deal. This was a good start. But more must be done. Congress approved direct cash relief — $1,200 per person to help working families through this crisis.  But it’s a one-off.  And Congress didn’t include direct student loan forgiveness, or Social Security boosts for seniors, or cost-free treatment for COVID-19, full paid sick leave for our workers, or sufficient fiscal relief to states.  Joe Biden would:

  • Provide for additional checks to families should conditions require.
  • Forgive a minimum of $10,000 per person of federal student loans, as proposed by Senator Warren and colleagues. Young people and other student debt holders bore the brunt of the last crisis. It shouldn’t happen again.
  • Increase monthly Social Security checks by $200/month, as proposed by Senator Wyden and colleagues. Seniors and people with disabilities are uniquely at risk right now.
  • Provide emergency paid sick leave to everyone who needs it, with no one left out. This should include workers in all industries and all sectors, regardless of company size, and including gig workers, domestic workers, contractors, and the self-employed.
  • Ensure that no one has to pay a dollar out of pocket for COVID-19 testing, treatment, or an eventual vaccine.
  • Provide all necessary fiscal relief to states so their workers and communities get the help they need, especially those on the front lines like New York.

The bottom line is that Congress will have to keep acting. This is not the last bill.  There will be more. And Joe Biden would do whatever it takes, spend whatever it takes, move heaven and earth to help all the people harmed by this crisis.