WASHINGTON, DC – Unemployment is spreading across the country like the novel coronavirus (COVID-19), upending lives and livelihoods, and damaging individuals, businesses, state, and local budgets at an alarming rate. The U.S. economy shed more than 20 million jobs in April alone and 33.5 million people have become unemployed in the past seven weeks, according to the U.S. Department of Labor.
To effectively address the pandemic and the economic crisis, U.S. Senator Jack Reed (D-RI) is teaming up with U.S. Representative Don Beyer (D-VA) and U.S. Senator Michael Bennett (D-CO) to introduce the Worker Relief and Security Act. This legislation would use automatic triggers (also known as “stabilizers”) to ensure the involuntarily unemployed receive sustained federal unemployment insurance (UI) for the duration of the crisis, rather than an arbitrary cutoff. The Beyer-Reed-Bennett bill would tie enhanced UI benefits to the current public health emergency and economic conditions. Under the bill, enhanced benefits would end 30 days after the national emergency declaration or a state governor’s declaration for the pandemic ends, after which it would phase out over 13 weeks.
“Our bill would help stabilize the economy, allow hard-pressed families to put food on the table, and keep businesses in business. It is not a cure all, but it will inoculate the U.S. economy against some of the worst impacts of the virus and go a long way toward keeping families, businesses, and states solvent through this crisis. The Worker Relief and Security Act offers a smart, data-driven strategy that automatically adjusts to evolving conditions and takes politics out of the equation. It invests in people, will help stave off a deeper depression, and better position America for a strong economic rebound,” said Senator Reed. “This legislation offers a firm commitment that Congress will put politics aside and take an effective, conditions-based approach to targeting relief where it is needed. It offers a strong return on investment for taxpayers and will provide a major boost to families, businesses, and communities.”
Unemployment insurance is a joint state-federal program that provides direct payments to eligible workers who have lost their jobs through no fault of their own and are actively seeking to return to the workforce. Each state administers a separate unemployment insurance program, but all states follow the same guidelines established by federal law. Jobless benefits are based on a percentage of prior earnings and are crucial to alleviating economic hardships for the unemployed and help breaking the negative cycle of unemployment and recession by helping unemployed individuals partially maintain their purchasing power during economic downturns.
“In the face of an historic crisis, the federal government must take extraordinary steps to give the American people sustained help and prevent this economic downturn from becoming a depression,” said Congressman Don Beyer, the Vice Chair of the Joint Economic Committee. “This pandemic and the resulting economic crisis may continue to inflict horrifying suffering on the country for many months to come. Passing emergency relief legislation that incorporates automatic triggers would have the enormous benefit of ensuring assistance continues to flow to workers even if Congress itself is unable or unwilling to act. I have had many conversations with colleagues about the ideas contained here, and expect them to receive strong consideration in ongoing discussions about future pandemic response legislation.”
“We are going to be climbing out of a deep economic hole, and we need to maintain support for workers and families until the economy is back to full strength,” said Senator Michael Bennet. “Our plan will strengthen unemployment benefits to sustain people whose lives have been upended through no fault of their own until they can safely go back to work.”
In the current recession, even as businesses and communities seek to safely reopen, production and consumption have contracted, and not all employees, or customers, can swiftly return. In some instances, the jobs themselves are no longer needed. In other cases, people with chronic health conditions are left with an untenable choice between their paycheck and their health.
Still, despite the dire circumstance, Senator Reed notes America’s unique and substantial advantages and assets – from our capacity for technological innovation to leading financial institutions to geopolitical clout and a diverse, productive, entrepreneurial workforce – position the U.S. for strong economic recovery if we follow the right path.
“People and communities are growing poorer because of the Trump Administration’s unfocused, disjointed response. Even now, there is a troubling disconnect between reality and White House rhetoric. There are steps we can take to stop the unemployment carnage, but the road to recovery is a marathon, not a sprint. Getting our nation back on track starts with smart, cost-effective investments in people. It requires a coordinated response and tailored solutions like the Worker Relief and Security Act to save jobs and protect people,” said Senator Reed. “The public health and economic challenges we face are not insoluble. Our nation has the capital, capacity, expertise, and resources to overcome this. What is required now is stable, steady leadership and strategic investment. We must do everything we can to keep people safe and healthy and ensure they can safely return to work at the appropriate time. That requires cost-effective federal investment to ensure people, businesses, and communities can weather the storm and be ready for a strong rebound when the time comes.”
The Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law No. 116-136) authorized extra unemployment payments, increased the amount of money, and broadened eligibility to include self-employed individuals and gig economy workers. But the increased unemployment benefits have an expiration date, and the $600 additional weekly benefit from the Federal Pandemic Unemployment Compensation (FPUC) the CARES Act authorized sunsets on July 31. Meanwhile, the expanded eligibility covering self-employed people and independent contractors expires at the end of December, right when infection rates could be soaring.
The Beyer-Reed-Bennett bill specifies that for the duration of extreme social distancing, based on the President’s emergency declaration issued in March or a governor’s declaration, eligible workers will continue receiving CARES Act UI assistance, and benefits will continue for the full length of an economic crisis. A summary is available here, with a factsheet here, and explanatory charts here. Under the proposal:
• A worker who exhausts their traditional unemployment compensation benefits (funded by the state) will be able to receive additional unemployment benefits fully financed by the federal government without limit until 26 weeks after the end of extreme social distancing.
• A worker receiving Pandemic Unemployment Assistance (PUA) benefits for those who do not qualify for traditional UI will also not face limits on the number of weeks they can draw benefits until 26 weeks after the end of the Public Health Emergency.
• Workers receiving the extra $600 in weekly benefits will continue to receive it until 30 days after the end of the President's emergency declaration, after which it will begin to phase down over 13 weeks.
Workers in states with extraordinary unemployment or elevated levels of unemployment would be eligible for additional benefits on top of regular benefits based on the 3-month average of the state's unemployment rate. The bill would also fix the Pandemic Unemployment Assistance program to ensure workers who fall between the cracks of the traditional unemployment assistance do not fall between the cracks of the program meant to support them.
The legislation has been embraced by a wide variety of leading economists, including former Federal Reserve Chair Janet Yellen, who stated: “An unthinkable 30 million American workers have already been displaced by the pandemic and the count continues to rise. They need relief and support for as long as the job market remains weak. That’s not only fair. It’s essential to support an economic recovery. The Worker Relief and Security Act is important because it guarantees that the CARES Act’s critical unemployment benefits will remain in place for however long they’re needed.”
Reed also rejected the false notion that unemployment benefits are too generous, thus disincentivizing people to work and making unemployment an attractive option.
“Americans want to work, and no one can collect unemployment if they’ve been offered their job back. Displaced, low wage workers aren’t getting rich off of pandemic unemployment assistance. But this modest sum can make a lifesaving difference for individuals and help businesses survive the downturn,” said Senator Reed.
Using a tiered system that tailors aid to people most in need, unemployed workers in states where the three-month average of the unemployment remains above 7.5% would continue to receive extraordinary support after the 26 weeks following the end of extreme social distancing. Workers in states where the 3-month average unemployment rate is between 7.5% and 8.5% will be eligible for 39 weeks of extended benefits or PUA. Workers in states where the 3-month average unemployment rate is between 8.5% and 9.5% will be eligible for 52 weeks of extended benefits or PUA. Workers in states where the 3-month average unemployment rate is above 9.5% will be eligible for 65 weeks of extended benefits or PUA.
This comes on top of regular unemployment benefits (typically 26 weeks) workers receive as well as any weeks of additional benefits or PUA they received before the end of extreme social distancing and the 26 weeks after. Unemployed workers will receive $450 in additional weekly benefits for 13 weeks following the end of extreme social distancing and will then continue to receive $300 in additional weekly benefits as long as the 3-month average unemployment rate in their state is above 7.5%.