After House Speaker Nancy Pelosi excluded a plan to keep unemployment down by subsidizing firms to keep workers on payrolls from her relief package last week, dozens of progressives have banded together with 10 “front-line” Democrats from swing districts to introduce it as a standalone piece of legislation.
The Paycheck Recovery Act, authored by Rep. Pramila Jayapal, D-Wash., aims to make sure that paychecks are flowing from employers to workers during the coronavirus pandemic. A previous version, the Paycheck Guarantee Act, had been a priority of the Congressional Progressive Caucus, of which Jayapal is a co-chair. The bill subsidizes struggling companies’ payrolls in order to discourage layoffs and keep unemployment down. While Pelosi had said she was open to considering the idea, she ultimately kept it out of the HEROES Act, the coronavirus relief bill passed by the House on Friday, which includes an extension of unemployment subsidies. Jayapal confronted her on a private caucus conference call over the decision, and Pelosi aides later pushed back, criticizing the measure for not having official legislative text or Republican co-sponsors.
Jayapal ultimately voted against the legislation, along with eight other progressives, citing the exclusion of her program. They were joined by five front-liners, some of whom objected to the paycheck measure’s omission, others of whom opposed it from the right, complaining of a lack of bipartisan buy-in.
The stampede of front-liners toward Jayapal’s new bill, according to people involved in the negotiations, is driven by an intersection of policy and electoral concerns. The front-liners are concerned that Pelosi’s rejection of the paycheck bill, and her focus on unemployment, makes for poor politics, and they have complained that they are getting hammered at home by Republicans, who are dubbing Democrats the party of unemployment.
The alliance of swing-district Democrats and the progressive wing of the party represents a new threat to House Democratic leadership’s domination of the caucus. Because of the stark partisan divide in the House, Pelosi can’t rely on the few remaining moderate Republicans to push legislation over the top. Instead, leadership typically shapes legislation to appeal to the swing-district bloc of Democrats — there are 42 front-liners who the party considers in need of electoral protection — then bludgeons progressives into supporting it, arguing that whatever is being offered is better than nothing and promotes the necessary goal of maintaining the majority, without which progressives have no power at all. Efforts by progressives to organize enough no votes to extract leverage in negotiations over coronavirus relief have so far not come to fruition, but teaming with front-liners opens up a new potential strategy as the pandemic scrambles political calculations.
For years, Pelosi has insisted that if it were up to her, the party would go further left than it does, but that the imperatives of reelection require moderating legislation for the members she calls “majority makers.” But if those majority makers get out ahead of Pelosi, that rationale would evaporate, and the dictates of making and keeping a majority would militate in their direction.
The first glimmer of the potential coalition came when Rep. Haley Stevens, a freshman from Michigan, voted against the rule linked to the HEROES Act on Friday afternoon. Flipping just four more votes would have shot down the rule, which would have blocked the underlying bill from coming to the floor. Members of Congress often express opposition to legislation by opposing the rule, even if they later vote in support of the bill itself later, which Stevens did.
Stevens, in a statement explaining her support for the HEROES Act and her vote against the rule, said that the bill’s failure to keep workers tied to their jobs, prioritizing unemployment instead, was a knock against it. “Any relief package must prioritize strong employment measures to protect jobs and the relationship between workers and employers for an extended and flexible duration of time,” she argued.
It was a clear reference to the paycheck measure’s omission from the final package. “Mass unemployment is not and will never be our answer to this crisis,” Stevens said.
Rep. Katie Porter of California, among the most progressive front-liners, also voted against the rule, as did Rep. Abigail Spanberger of Virginia, who cited a number of concerns, among them that that the bill didn’t prioritize “addressing catastrophic unemployment rates.”
Rep. Tom Suozzi, a Democrat from Long Island and a moderate member of the Problem Solvers Caucus, is co-sponsoring Jayapal’s legislation. “I think the most persuasive argument is that state unemployment systems are ill-equipped to handle the volume of claims and that will not be rectified in the near future,” he told The Intercept. “Helping people by having more folks on unemployment is not the answer. Additionally, PPP” — the Paycheck Protection Program, which is meant to help small businesses keep their payroll going — “has too many ‘big’ small businesses that don’t need the help. This bill seems more effective and more targeted.”
The other front-liners so far on the bill, which has 93 co-sponsors, are Democratic Reps. Mikie Sherrill and Tom Malinowski of New Jersey; Sean Casten of Illinois; Katie Porter and Mike Levin of California; Jahana Hayes of Connecticut; Steven Horsford and Susie Lee of Nevada, and Kim Schrier of Washington.
The Senate is currently debating its version of the relief package, with Majority Leader Mitch McConnell pretending that liability protection for businesses during the pandemic is the sole provision Republicans want — and, therefore, that everything else is a Democratic demand. Such conditions don’t leave much room for policy innovation, but Jayapal’s paycheck guarantee is one program that has bipartisan support in the Senate and has worked elsewhere in the world.
In moments of economic decline, resulting from either natural disasters, pandemics, or financial crises, governments around the world have two primary means of mitigating harm and reducing the depth and duration of the slump: extending unemployment payments to those laid off through no fault of their own, or extending subsidies to companies to keep workers tied to their jobs, even if their hours are heavily reduced.
In the wake of the 2008 financial crisis, Germany relied on a program of wage subsidies to keep people in their jobs, which kept unemployment in the low single digits. The U.S., meanwhile, focused instead on providing relief in the form of unemployment payments and brief subsidies for health care coverage for the jobless. The U.S. unemployment rate, as expected, rose dramatically, while Germany’s didn’t, and the U.S. recovery took much longer. U.S. policymakers, or at least those in charge of writing the laws, learned little from the last crisis.
The CARES Act, the multitrillion-dollar relief package that was passed in late March, took the route of subsidizing unemployment by providing workers who had been recently laid off with an extra $600 in unemployment benefits for four months. The HEROES Act includes an extension of those benefits until January 2021. “Mass unemployment is a policy choice, and we must choose differently,” Jayapal said Tuesday, introducing the Paycheck Recovery Act.
Sen. Josh Hawley, R-Mo., joined by a handful of Democrats, has sponsored a similar piece of legislation in the Senate. The politics of fighting on behalf of jobs is an obvious winner, and Hawley is hoping to exploit Democrats’ failure to do so in an election year. Some Republicans, Politico reported, “see an opportunity to get the upper hand on jobs and the economy after the Democratic House proposal omitted” Jayapal’s paycheck guarantee legislation. Republican Sen. Cory Gardner, facing a tough reelection fight in Colorado, publicly backed the paycheck measure at the end of last week. Sens. Bernie Sanders, I-Vt.; Mark Warner, D-Va.; Doug Jones, D-Ala.; and Richard Blumenthal, D-Conn., have also supported versions of the legislation.
“We should put forward a proposal that is focused on jobs in contrast to what House Democrats are doing. They could have done something like this. They had an opportunity to put forward a jobs proposal and they didn’t,” Hawley said. “It is unbelievable that you would propose $3 trillion in federal spending and you wouldn’t have a focus on workers.”