House Financial Services Committee Convenes Hearing on Protecting Workers’ Pay During Pandemic
Last week, the House Financial Services Committee (HFSC) held a hearing titled “Paycheck Security: Economic Perspectives on Alternative Approaches to Protecting Workers’ Pay During COVID-19” to consider how to move forward and continue to protect employers as many pandemic-related economic aid programs are scheduled to expire soon.
During the hearing, The Committee considered H.R. 6918, the Paycheck Recovery Act of 2020 (PRA), which would direct the Secretary of the Treasury to create a grant program through the Internal Revenue Service (IRS) for employers impacted by COVID-19.
If passed and signed into law, the legislation would ensure all private and public employers that have experienced at least a 10 percent revenue loss would be eligible to receive a three-month lump sum grant to support their workforce and wages. The IRS could run the program for three months, with automatic renewals if the unemployment rate remains above 7 percent.
PRA grants could also be used to cover operating costs, as long as they relate to COVID-19. Additionally, the legislation would direct the Secretary of the Treasury to transform other types of federal aid, such as loans through the Paycheck Protection Program, into PRA loans.
“Recovery from the present recession will likely involve a larger redeployment of workers and capital than previous downturns,” said witness Diego Zuluaga, Associate Director of Financial Regulation Studies at the Cato Institute.
“Attempting to freeze America’s productive structure in its pre-COVID-19 state will therefore only delay the return to full employment and steady growth. The bounce-back will be swifter, on the other hand, the more quickly businesses adapt to new conditions,” he continued.
In addition to Zuluaga, other witnesses testifying before the committee included Lisa D. Cook, Professor in the Department of Economics at Michigan State University’s James Madison College; Lily Eskelsen Garcia, President of the National Education Association; and Joseph Stiglitz, Professor of Economics at Columbia University.
To view a video replay of the hearing, or to access other resources including the Committee Memorandum and individual witness testimonies, click here.