Congress hit for not doing more on paid leave

Advocacy groups are hitting Congress for not going far enough in providing emergency paid sick and family leave in the face of the coronavirus pandemic, saying legislation passed by the House and backed by President Trump leaves too many people behind.

The bill, which emerged after lengthy negotiations between Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi (D-Calif.), would provide two weeks of paid sick leave for workers, and up to three months of paid family leave.

But unlike an earlier draft, it excluded companies with over 500 workers from the requirements, and created a path for companies with fewer than 50 employees to seek a waiver. It drew criticism for leaving some workers without protection during a critical time.

“We believe the House missed a vital opportunity to mitigate the impacts to small businesses, and in fact included provisions that may harm small businesses that are already struggling,” said John Arensmeyer, CEO of Small Business Majority, an advocacy group.

Eileen Appelbaum, co-director of the left-leaning Center for Economic and Policy Research, said the bill included “egregious compromises.”

On the right, Sen. Tom Cotton (R-Ark.) protested a switch in how the bill paid for the provisions. It would use refundable tax credits to cover costs.

“We worry that the bill setting up a new and complicated system relying on businesses giving paid sick leave and then getting a refundable tax credit won’t move quickly enough and could put pressure on those businesses to lay workers off,” he said on Fox News.

The New York Times ran an editorial decrying the “giant hole in Pelosi’s coronavirus bill.”

Given the provisions on large and small employers, it suggested most workers wouldn’t be helped at all, since 54 percent of workers fall into companies with 500 or more employees, and another 26 percent work for firms with 50 or fewer workers.

Pelosi criticized the Times editorial, and it appears that its estimate of who would not be covered is overblown given that the vast majority of large employers already offer sick leave. Twelve states and D.C. already have laws covering sick leave, ensuring somewhat broader coverage. 

The original House bill, however, did cover workers at firms with more than 500 employees, something critics of the compromise bill said was crucial to ensure sick people would stay home during the pandemic.

Matt Stoller, research director of the left-leaning American Economic Liberties Project, said the House bill was a half measure.

“Ultimately, what you need to address a public health crisis like this is universal paid leave, because people who work for big companies and people who work for small companies can both get and pass on the coronavirus,” he said. “You can’t get your economy started until you have systems in place that make sure people don’t get infected.”

Some conservative groups also pushed for broader coverage. The right-leaning Heritage Foundation put out a plan to offer broad tax credits to companies that would cover 90 percent of leave. It estimated that this would cost between $2 billion and $80 billion, depending on the spread of the virus.

Democrats blamed Republicans for any shortcomings in coverage, but also argued compromise was necessary to move the bill ahead quickly during a crisis.

“Republicans didn’t support the mandate nor did they support leave for everyone. It was a clear non-starter for them,” said a Democratic source familiar with the negotiations. “Secretary Mnuchin and Republicans refused to consider any leave policies whatsoever without a cap.”

Mnuchin pushed back against the criticism, arguing that smaller companies were more vulnerable than big box companies when it came to weathering the storm.

“This focuses on employers that are 500 and less people. That’s a portion of the economy but that’s the economy that’s going to be hit the hardest,” he said on “Fox News Sunday.”

He also said that the IRS would work to make cash for small businesses available immediately through a variety of channels, and pushed back against the notion that companies would need to wait until their quarterly tax filings to get the sick leave tax credit.

“Employers will be able to use cash deposited with the IRS to pay sick leave wages,” he said. “Additionally, for businesses that would not have sufficient taxes to draw from, Treasury will use its regulatory authority to make advances to small businesses to cover such costs.”

The status of the bill is fluid. House lawmakers passed a series of corrections to their bill Monday night, while Sen. Rand Paul (R-Ky.) is threatening to hold up a vote unless new ways of paying for the bill are included.

Under the House’s latest corrections, companies will not be compensated for sick days they already offer, but can be reimbursed for health care premiums for workers on emergency sick leave. The family leave will only apply to parents whose children’s school or care facility was specifically shut down because of coronavirus.

Trump seemed to suggest that the Senate could address the issue of large companies in its own rewrite of the bill.

“We’re looking at that through the Senate because, as you know, the Senate is not digesting that bill,” he said Monday. “We may very well be adding something on that.”

Even with the bill in flux, Congress is already starting to consider a broader stimulus bill to boost an economy reeling from the pandemic. In the past month alone, stock markets have erased nearly all of their gains since Trump took office, and Trump on Monday admitted that a recession was possible.

Senate Minority Leader Charles Schumer (D-N.Y.) on Monday called for a new stimulus in the range of $750 billion.