U.S. Senator Doug Jones, D-Ala., alongside several of his colleagues, today released a proposal to establish a ‘Paycheck Security’ program to cover the wages and benefits of employees of affected businesses and non-profits until the economic and public health crisis is resolved.
“While we’re taking drastic steps to ensure the health and safety of the American people, we must also keep our hard-hit small businesses and their employees financially secure. The Paycheck Security Act will put existing infrastructure to work to help companies maintain payroll while cutting the red tape that’s slowing down relief to the American workers who need it most,” Senator Jones said. “Folks on both sides of the aisle agree we have to do more at the federal level to help small businesses and their employees, especially as it appears we’ll have a slow, staggered process to get folks back to work. This proposal is a creative solution that we can be implemented quickly to help businesses and workers in Alabama and across the country.”
Under the terms of the paycheck security proposal:
- All employers who have suffered a month-over-month drop in revenues of at least 20 percent will be eligible to receive grants covering a portion of payroll and benefits for at least the next six months.
- Grants will cover salaries and wages up to $90,000 for each furloughed or laid off employee, plus benefits, as well as up to an additional 20 percent of revenues to cover fixed operating costs such as rent, utilities, insurance policies, and maintenance.
- Employers and non-profits of all sizes will be eligible if they can verify revenue losses and don’t otherwise have more than 18 months of their payroll available in cash.
- Businesses that have received a Paycheck Protection Program loan or an Economic Injury Disaster Loan, or have otherwise accessed the Federal Reserve 13(3) facilities, will be ineligible, unless they exhaust these other programs or use the Payroll Security Program grant to pay back their existing loans.
An extensive white paper detailing eligibility, verification, and other contours of the proposal is available here.
“The Paycheck Security proposal is the right solution at the right time. It supports workers, keeps businesses afloat, and plays an oversized told in saving the American economy,” said John Bridgeland, former Director of the White House Domestic Policy for George W. Bush. “These Senators recognize that Congress should be supporting employment, not massive unemployment. We need this smart proposal to be enacted now.”
“We’re thrilled the Senators are seeking long-term grant assistance for businesses harmed by COVID-19 in his proposal for the Paycheck Security Program,” said John Arensmeyer, CEO of Small Business Majority. “This will provide a much more streamlined process that will allow businesses to continue to operate and keep people employed, and it will help the most vulnerable small businesses that have been left behind by the inefficient and underfunded Paycheck Protection Program (PPP). The Senators’ proposal addresses the needs of businesses and their employees now and throughout the rest of this crisis, reducing the need to keep going back to Congress for band-aid fixes.”
“The Paycheck Security Act is a bold program of grants, not loans, appropriately scaled to meet the massive challenge facing workers and firms. Equally important, it’s designed to be quickly and efficiently executed,” said Jared Bernstein, Center on Budget and Policy Priorities.
“Workers and their families are paying the price for going into the current crisis with a weak social insurance system and public safety net. Given this pre-existing weakness, transformative responses to this economic crisis have to be put together on the fly, and the Paycheck Security Act is a bold solution to provide needed relief during the lockdown period of the crisis and would put us in much better position to mount a rapid recovery once the public health all-clear was sounded,” said Josh Bivens, Director of Research, Economic Policy Institute.
“We are headed toward catastrophic levels of unemployment–20 percent or higher–and we must act to ensure that millions more workers are paid for as long as this crisis endures by making support for employers who keep workers on payroll simpler, faster and more universal. The Paycheck Security Act does just that,” said Richard L. Trumka, President, AFL-CIO.
Also joining Senator Jones in releasing the proposal today are Senators Mark Warner, D-Va., Bernie Sanders, I-Vt., and Richard Blumenthal, D-Conn.