Could your paycheck be guaranteed by the federal government?

Mark Warner
Sen. Mark Warner, D-Va., speaks with a reporter as he arrives at an event marking 100 days since the death of Jamal Khashoggi on Capitol Hill in Washington, Thursday, Jan. 10, 2019. (AP Photo/Andrew Harnik)

The paychecks of many workers slated to lose their jobs would be guaranteed through federal funding of company payrolls under legislation proposed to be included in the next major measure Congress develops to address the coronavirus pandemic.

Supporters of the legislation say it would help provide relief for other programs, such as the Small Business Administration’s Paycheck Protection Program, which has been swamped with applications that caused it to run out of money before receiving additional funding from Congress last week.

State unemployment offices have also been overwhelmed by the claims of millions of Americans who are out of work.

Sen. Mark Warner, D-Va., is one of the co-sponsors of the new proposal, called the Paycheck Security Act. Other co-sponsors include Sens. Bernie Sanders, I-Vt.; Doug Jones., D-Al.; and Richard Blumenthal, D-Ct.

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Warner said novel approaches are needed to deal with the worst economic situation since the Great Depression. He also points out that the legislation, which is similar to some programs in Europe, would allow people to keep their health insurance.

“There’s broad-based support for this,” Warner said in an interview with WTOP. “Can we move this giant battleship of all these programs that we put in place to support people through the pandemic — can we can move them to a new solution?”

Under the proposal:

  • Grants to companies would cover salaries and wages up to $90,000 for each furloughed or laid-off employee, plus benefits. As a result, the employees would not file for unemployment
  • Employers to be eligible would need to have suffered a month-over-month drop in revenue of at least 20% to receive grants covering a portion of payroll and benefits for at least the next six months
  • Companies would need to commit to not cutting the pay and benefits of rank-and-file workers

Warner believes it was a mistake that companies applying for the SBA’s Paycheck Protection Program didn’t have to show financial losses. Critics have singled out several major companies, such as the burger chain Shake Shack, for getting millions of dollars from PPP, which has led some of those firms to return them.

The Los Angeles Lakers this week repaid a loan of about $4.6 million, after learning the original fund had been depleted.

Warner, who is a member of the president’s task force on reopening the economy, said steps like his proposal are necessary because economic challenges are going to continue for some time.

“Clearly, the economic harm that we’re going to be feeling is not going to go away even when we reopen,” he said.

Sen. Josh Hawley, R-Mo., has offered up a similar proposal. It calls for the government to guarantee 80% of wages up to the national median.

There are a lot of competing proposals for inclusion in the next major legislation related to the pandemic. Congress has already approved nearly $3 trillion in emergency aid and Senate Majority Leader Mitch McConnell has recently raised concerns about the growing national debt.

Warner argues that his proposal could be less expensive than programs already in place.

“At the end of the day, it’s as cheap if not cheaper than the array of programs that we’ve put together,” he said.

Mitchell Miller

Mitchell Miller has worked at WTOP since 1996, as a producer, editor, reporter and Senior News Director. After working "behind the scenes," coordinating coverage and reporter coverage for years, Mitchell moved back to his first love -- reporting. He is now WTOP's Capitol Hill reporter.

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