On Tuesday, June 9, the Senate Finance Committee hearing “Unemployment Insurance During COVID-19: The CARES Act and the Role of Unemployment Insurance During the Pandemic” addressed the future and current administration of Unemployment Insurance (UI).
As state governments and businesses have slowly started to gain footing during this pandemic, Congress is now faced with a larger issue regarding the approaching expiration of the prospective $600/week flat-sum UI benefits. From both sides of the aisle, Congressional leaders have expressed concerns regarding the major discrepancies between re-opening and restarting businesses and the spread of the COVID-19 virus.
Chairman Chuck Grassley (R-IA) applauded that the CARES Act’s efforts that have provided Americans with the financial stability needed during this pandemic. However, he noted that the economic and social frontier’s continually changing scenery has promulgated an imperative reform to address the recovering economy. As states and businesses start to re-open, employment and job markets are slowly starting to turn positive Chairman Grassley remarked: “[we] need to shift our focus to helping people safely return to work, making sure businesses are able to come back quickly and put the country back on a path to economic growth”.
Ranking Member Ron Wyden (D-OR) remarked that the Trump Administration, along with Labor Secretary Scalia, have failed to recognize the continuing tragedies of the pandemic on Americans by advocating for the removal of these UI benefits and how it will result in millions of benefactors (over 20 million unemployed Americans) losing important support. He argued that many are already “hanging on by a thread.” The UI benefits are saving millions of jobless people from hunger and homelessness in the middle of this pandemic, stated Senator Wyden. “And forcing people back into contagious workplaces would also further spread the virus that has killed 110,000 Americans and turned nursing homes nationwide into scenes of tragedy.”
The first-panel presentation included Secretary of Labor Eugene Scalia, as he testified regarding plans for UI benefits and federal stimulus plans. Secretary Scalia expressed encouraging words amid a grim political/social setting. He noted the success of the Families First Coronavirus Response Act (FFCRA) and CARES Act in “swiftly” administering relief and aid packages to states for unemployment. He also pointed to recent successes in the job market as current benchmarks suggest—2.5 million in job growth. The recent successes in state information technology adaptations and administering of these relief programs have offered signs that Americans are returning to work.
Ranking Member Wyden and other Democrats expressed significant concerns regarding Secretary Scalia’s testimony, remarking that the Republican party push for a premature re-opening of the economy may cause a re-spike in COVID-19 cases and fails to address individual situations of American workers. Senators argued that both the President’s and Secretary’s failures, in not observing and acknowledging the major health safety concerns in workspaces; moreover, guidelines and standards given by CDC and DOL have failed to address clear rules regarding employees. Senator Sherrod Brown (D-OH) and others also noted significant concerns regarding the Office of Congressional and Intergovernmental Affairs (OCIA) claims as numbers of complaints have surpassed 5,000 yet that only resulted in 1 citation being written. Furthermore, Senator Brown remarked that the Trump Administration is “using [American] citizens as “expendable” members”. On the contrary, Senators Bill Cassidy (R-LA) and Rob Portman (R-OH) suggested that American workers want to work and that in order for the economy to bloom again, we need workers to come back. Later in the hearing, Secretary Scalia addressed future workshare and training programs for re-entry in job markets and program integrity regarding fraudulent reporting for UI benefits.
The second panel consisted of Scott Sanders from the National Association of State Workforce Agencies, Beth Townsend from the Iowa Workforce Development, State Senator Jose Javier Rodriquez from Florida, Michele Evermore from the National Employment Law Project, and Les Neilly from Neilly Canvas Goods Company. These witness testimonies focused on unemployment administrations in the states and the frequent challenges of the UI program in assisting Americans during these tough times. Senator Rodriguez and Evermore both pointed to major inconsistencies in state agencies such as the Department of Economic Opportunity (DEO) and other unemployment offices. They presented many first-hand struggles of individuals during these times and highlighted the extensive need for UI as a “Key Economic Stabilizer”.
In response, Senators John Cornyn (R-TX) and Patrick Toomey (R- PA) expressed dissenting opinions regarding future stimulus plans. They explained that future expansion of UI benefits would further place small businesses and companies in more financial difficulty, because workers will take UI benefits over actually coming in to work. However, Senators Debbie Stabenow (D-MI) and Robert Menendez (D-NJ) expressed their views that the $600 stimulus checks have been “life lines” for families in need. They both highlighted major concerns with minority communities specifically with unemployment for African American being at 16.8 percent and for Hispanics at 17.6 percent. The overall unemployment rate is 13.3 percent, the highest in over a decade.
In all, this hearing presented the legislative language of the CARES Act with concerns about the future development and re-entry of workers into the economy. As states continue to re-open and move into new phases, it is vital to promote flexible federal and state funding plans dependent on the economic production level.