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Senate proposal championed by Sen. Mark Warner would guarantee paychecks for workers

ROANOKE — Congress is gearing up to consider a fourth coronavirus relief proposal, and Virginia Sen. Mark Warner is leading a push on the Senate to guarantee paychecks for workers.

The Paycheck Security Act would fund a portion of a company’s payroll costs, up to $90,000 per worker who has been laid off or furloughed. The company would have to demonstrate it has lost a 20% month-over-month decline in revenue.

Warner, a Democrat, has joined with Sens. Bernie Sanders, D-Vermont, Doug Jones, D-Alabama, and Richard Blumenthal, D-Connecticut, to try and get this included in any upcoming COVID-19 relief legislation.

“We make up the ideological breadth of Senate Democrats, the four of us,” Warner said Friday during a call with reporters.

Congress has already passed trillions of dollars in legislative relief to respond to the pandemic, but the devastation the coronavirus has inflicted — on public health, state and local government budgets, the economy — has legislators saying more help is needed.

More than 3.8 million laid-off workers applied for unemployment benefits last week in the United States. More than 560,000 Virginians have filed for unemployment since the crisis began.

Congress expanded the unemployment benefits, but the unemployment system is overwhelmed by record applications. It created the Paycheck Protection Program for small businesses with fewer than 500 people to ask for money to cover two and a half months’ worth of payroll. The program was thrown together in a week and had various problems, including large companies beating small businesses in the race to secure loans.

“We’re barely keeping the economy going, and we think now is the time to pause and say maybe there’s a better and more efficient way to do this,” Warner said.

The senators’ legislation would provide businesses of all sizes with grants to cover up to $90,000 in wages for workers and some operational costs, like rent and utilities, for up to six months. The Treasury Department and the IRS would hand out the grants.

There are eligibility restrictions and conditions. Companies with 18 months of average payroll on hand in cash would be prohibited from receiving these grants. Companies also can’t cut pay and benefits of rank-and-file workers, can’t buy back stock or pay dividends, and must cap CEO compensation at 50 times the median wage of their workforce.

Companies getting funding from the Payroll Protection Program and the Economic Injury Disaster Loan program — meant to provide businesses with immediate, emergency cash — would also be ineligible, unless the money they were getting from those programs ran out.

The senators said they view this program as one that could succeed the Payroll Protection Program. Their proposal is similar to a provision in a previous relief package that helped guarantee paychecks for airline workers through September. In keeping people on payroll, they also keep their health insurance.

“It’s a heck of a lot simpler than what we’ve done since now,” Sanders said.

Blumenthal praised Warner for being a “champion of this kind of visionary and innovative effort.” Warner’s business background has been an asset in discussions about how to respond to the coronavirus crippling the economy. He’s a pro-capitalist and moderate Democrat who built a career in the venture capital and telecom industries before he arrived at the Senate.

President Donald Trump tapped him to join a bipartisan task force to advise him on how to reopen the economy.

Warner pressed to have loopholes closed and more accountability measures in legislation that would release billions of dollars in loans to businesses. He’s been advocating for years that the country’s unemployment insurance program failed to cover millions of workers who make a living as independent contractors, freelancers, gig workers and self-employed entrepreneurs. Congress closed that gap, at least temporarily.

With Congress looking ahead to more legislation, Warner said it’s useful to revisit its strategy about how to keep workers employed and minimize the massive disruption to the economy.

“Even if we do reopen the economy, this isn’t going to be an easy rebuilding of our workforce and the economy,” he said.

The senators are optimistic about receiving bipartisan support. Rep. Pramila Jayapal, D-Washington, introduced a more generous version of the Senate proposal in the House of Representatives. Sen. Josh Hawley, R-Missouri, has also expressed support for a paycheck guarantee program.

There’s no price tag on the proposal yet, but the senators believe that while it will cost a lot, they expect it’ll be less expensive than the way they’re approaching saving the economy now.

“This is trying to save the economy, this is trying to save jobs, this is trying to save businesses,” Jones said.

The legislation’s main goal is to keep workers employed so that businesses can resume operations once the economy reopens. When workers become untethered from their employers, it’s harder to resume business quickly and accomplish the objective of a deep and brief recession being followed by a rapid and robust recovery.

“Instead of allowing businesses to go into freefall and pick up the pieces later and reassemble the workforce, we’re proposing a guardrail at edge of that precipice,” Blumenthal said.

The idea of the federal government stepping in to help pay people’s wages would be unprecedented, but it’s not a new concept. It’s a strategy European countries such as Denmark, Germany and the United Kingdom have already adopted over a month ago. Unemployment is higher in the U.S. than in Europe since the start of the coronavirus lockdowns.

Warner said he was interested in having this kind of program in the United States at the onset of the crisis, but the senators said it’s not too late to implement it now.

“We’re only beginning this period of insecurity and unemployment,” Blumenthal said.

The Senate is returning to Capitol Hill next week, but the House will not, instead figuring out how to do its work virtually.

Rep. Robert “Bobby” Scott, D-Newport News, chairman of the House Committee on Education and Labor, announced Friday House and Senate Democrats introduced legislation to invest $15 billion in workforce training and career and technical education. The Relaunching America’s Workforce Act, of which Sen. Tim Kaine, D-Va., is the co-sponsor of in the Senate, would provide partial funding to employers to keep workers on payroll while the employees go through job training.

The legislation would also restart a grant program that was used during the Great Recession to support partnerships between community colleges and industry to get workers skills for in-demand job.

“Providing additional resources to the nation’s workforce system now is a critical step in relaunching America’s workers and businesses as the nation begins to recover from the COVID-19 national emergency,” Scott said.


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