Reducing a Harmful Incentive for Worker Layoffs during the COVID-19 Outbreak

Description

The Sen. Ben Sasse (R-NE, ACUF Lifetime 94%) amendment (1578) to the Coronavirus Aid, Relief, and Economic Security (CARES) Act would implement a critical reform to make it less financially lucrative to not work and earn more than one would normally on the job. Specifically, a provision within the $2 trillion CARES Act provides an extra federal benefit of $600 per week through July 31, 2020 in addition to state unemployment benefits (national average $462/week). As a result, some employees actually earned more from unemployment benefits than they earned when working. The Sasse amendment would ensure that unemployment compensation does not exceed the amount of wages the individual was previously earning. ACU recognizes that researchers from the University of Chicago who studied the enactment of the $600 federal benefit found that 69% of unemployment recipients earned more than their prior wages, with one-fifth of recipients earning wage replacement rates of more than 200%, meaning they made twice as much while on unemployment. ACU believes it is absurd to force taxpayers to pay universal stay-at-home welfare payments at such a disparity to actual wages, believes many of government’s reactions to COVID-19 have done more harm than good and supported this amendment. Democrats used the filibuster to defeat this amendment as the Senate failed to invoke cloture (end debate) on March 25, 2020 by a vote of 48-48. (A three-fifths majority vote, or 60 votes, were required and a “yes” vote supported the ACU position.)