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Three Republican senators are warning that they will oppose the massive coronavirus response package unless a “massive drafting error” in the legislation, that they say will create an incentive for employers to lay off employees, is fixed.
Fox News is told the concern is that the current version could pay workers more in unemployment benefits than they’re currently making, by sticking a $600 per week payment on top of ordinary benefits that are calculated as a percentage of income. This could disrupt the labor market further, the lawmakers warn.
“A massive drafting error in the current version of the coronavirus relief legislation could have devastating consequences: Unless this bill is fixed, there is a strong incentive for employees to be laid off instead of going to work. This isn’t an abstract, philosophical point — it’s an immediate, real-world problem,” Sens. Tim Scott, R-S.C., Ben Sasse, R-Neb., and Lindsey Graham, R-S.C., said in a statement.
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The White House and Senate leaders had come to an agreement on the $2 trillion package that is designed to boost the economy and provide aid to workers and businesses affected by the closing down of much of daily life in response to the coronavirus crisis.
But with the legislation nearing approval by the chamber, the three Republicans are warning that the text as written could incentivize layoffs, which they say could in turn lead to “life-threatening shortages” in health care and the food supply chain.
“This isn’t who we are as Americans; this isn’t what we do in a crisis. We must sadly oppose the fast-tracking of this bill until this text is addressed, or the Department of Labor issues regulatory guidance that no American would earn more by not working than by working,” the statement said.
When asked for more details, Sasse spokesman James Wegmann told Fox News that because of the way the federal unemployment benefit formula is structured, “the bill will create a perverse incentive to sever the employer/employee relationship.”
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“This threatens dangerous supply chain problems in critical industries,” he said.
He said that they are working on an amendment to fix the problem that would mean that the maximum unemployment benefit is 100 percent of someone’s salary, therefore ensuring they get the benefits they need, and supply chains are kept intact.
Fox News’ Caroline McKee contributed to this report.
