It didn’t take long for the Families First Coronavirus Response Act to go from conception to law. The House passed it 363-40 Saturday, March 14. By the end of the day Wednesday, March 18, the bill had cleared the Senate 90-8 and been signed into law by the president. It goes into effect 15 days after signing. This relief bill gives many Americans a bit of breathing room amid the COVID-19 crisis – but at what cost?
A Welfare State of Mind
This law greatly expands the welfare programs, both by adding funds and qualifying more people. It adds another $500,000,000 for SNAP and WIC, $400,000,000 for commodities, and relaxes the restrictions on who qualifies for benefits.
This act also extends SNAP to households with children whose schools are close for five or more days, so long as they qualify for free or reduced-price meals. This measure addresses the legitimate concern of what to do with kids who can’t go to school – especially if a parent is required to stay home with them, thus missing out on income. They have to eat, and this provision is Congress’ way of making sure they do. It also increases the benefits for those who draw unemployment and makes it easier to get for anyone put out of a job after the government restricted businesses and closed schools.
Additionally, the Families First Coronavirus Response Act increases the amount of Medicare and waves cost sharing under the program, making testing for COVID-19 available at no out of pocket cost to the patient.
Employers Left Holding the Bag
With all the closings and restrictions placed on businesses, many employees face losing their incomes. To reduce that pressure, the government leaves the employer holding the bag. The first ten days off work are unpaid, but if the employee has any paid time off, they’re entitled to it. From the 11th day on, however, employers are required under this law to pay “not less than two-thirds of an employee’s regular rate of pay” for the number of hours the employee would have normally been scheduled to work.
There are exceptions. Small businesses with fewer than 50 employees are exempt, as is any company that can prove this requirement jeopardizes the viability of the business. And paid leave can’t exceed $200 a day and $10,000 total. Other rules may apply in special cases, but for the majority of the Americans left out of work in the wake of the Coronavirus panic, it means two-thirds their normal checks each payday, just to stay home.
Additionally, employers must pay emergency sick leave for anyone who has to miss work because they’re under quarantine, are caring for someone under quarantine, or caring for a child whose school has closed because of the COVID-19 emergency. That’s either going to be the employee’s regular wage or the minimum wage in that state, whichever is higher.
That’s a great boon for the workers who might not otherwise be able to pay their bills, but it hammers the affected employers. Those required by the government to close or offer reduced hours or services will still have to pay the employees they had to send home on days they’re not doing as much – if any – business. The only real protection for the actual employers is a 100% tax credit on any paid leave due to the emergency, so long as they don’t exceed the maximums detailed in the new law.
Wasting Time or Saving Tax Dollars?
Sen. Rand Paul (R-KY) was the chief dissent in discussions on this bill. He voted against it, but first attempted to insert an amendment that would require the money come from cuts and reforms elsewhere. It failed, of course, and so the $104 billion will be appropriated without being offset in any way – and we the taxpayers will pick up the tab later. Note the media spin on this, that Sen. Paul held up the emergency relief bill with an amendment he knew wouldn’t pass. The message is clear: People are dying, and he’s wasting time.
Let’s set that record straight right now. Sen. Paul didn’t oppose spending the money to fight Coronavirus; he wanted it to come from what Congress had already appropriated. Is that unreasonable? Note that this bill grants new funds to SNAP to pay for the meals of kids who are out of school for five or more days. It also allots more money for commodities. But what about the funds and food the closed schools already have? Will the food go to commodities? Will food program funding stop for closed schools and be diverted to SNAP? Here was a logical opportunity to offset some of the cost of this bill – without reducing the amount of food that goes to hungry kids – and Congress ignored it.
Then there’s the “people are dying” argument. Coronavirus has claimed lives in America. But how many of those died because they didn’t have emergency sick leave from work, paid time off, or extra SNAP benefits? How many Coronavirus deaths have been due to starvation? People are dying, but not because the U.S. government’s appetite for spending was slowed momentarily by Rand Paul.
The Cost of Meddling
A big part of the reason so many people face financial disaster is the meddling by the very government they hope will now save them. If businesses and schools weren’t closed, how many people would be out of work? The sick, of course, but the number of Americans suffering from COVID-19 is miniscule compared to those missing work from other seasonal illnesses, especially flu.
Every year, tens of thousands of Americans die from influenza and tens of millions become ill – many of whom miss work, thus losing income if they don’t have the paid time off to cover it. Every year, we somehow manage to avoid total economic collapse in spite of this. What’s different this time? Government action, both inspired by and, in turn, inspiring widespread panic.
If the government forces people to miss work, it is obligated to help replace that income somehow – but wouldn’t it be better if the politicians and bureaucrats just stayed home instead? Either way, it is the American people who pay the price, and it costs us more in the long run if the government has to step in and manage our lives.
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Read more from James Fite.
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