Wednesday, April 22, 2020

Congress sowed, small business owners reap

During the last full week of March, Congress passed H.R. 748, the so-called Phase III of Congress' response to the corona virus and its economic fallout.

Just before passing it, a debate ensued on the Senate floor about one of it's provisions. In addition to already-existing unemployment benefits, Congress was providing $600 per week to beneficiaries. That works out to $2,400 per month. On an annualized basis that works out to $31,200 per year—for not working at all. Due to the stay-at-home nature of the circumstances, this also meant there was no requirement to look for work either. Over the four months the provision would be in place, this is a total benefit of $9,600 additional for people not working.

Members of Congress may not realize that this works out to more money than many people get paid when they're working their normal job(s).

Several Senators raised concerns about this provision and offered an amendment to “ensure that additional unemployment benefits do not result in an individual receiving unemployment compensation that is more than the amount of wages the individual was earning prior to becoming unemployed.”

Inexplicably, not only was this amendment necessary, it was voted down, 48-48.

Senator Bernie Sanders was having none of it: “Imagine that. Somebody who is making 12 bucks an hour now faces, like the rest of us, an unprecedented economic crisis and, with the 600 bucks on top of their regular unemployment check, might be making a few bucks more for 4 months. Oh, my word, will the universe survive? How absurd and wrong is that? What kind of value system is that?”

If the amendment passed, Sanders threatened to derail the legislation by adding an amendment to remove funds for large businesses.

Will the universe survive, indeed? Perhaps it depends on what we mean by universe.

For small business owners that employ people, their business is a large part of their universe.

When even left-leaning news organizations cannot avoid reporting on the problems this policy created, it might be something for Congress to correct, and certainly to avoid in future spending legislation.

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