For Congress, it is customary to misuse must-pass legislation as the vehicle for policies that would otherwise fail on their own. But to hide behind the veil of pandemic relief for a third round of aid while $1.1 trillion remains unspent from previous aid packages is insulting.
That is what Democrats are now doing, taking advantage of the coronavirus to include provisions in a relief bill that are neither COVID-19-related nor helpful for getting Americans back to work and reopening the economy.
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The House of Representatives last week started piecing together what will become a $1.9 trillion pandemic relief package and will force it through Congress at record speed under the process of budget reconciliation.
This expedited procedure allows legislation to pass the Senate with a simple majority, not the usual 60-vote threshold. This turns the bill into a silver bullet for progressives to check off longstanding items on their wish list.
In this next round of aid, Democrats are aiming to pass a hike in the federal minimum wage to $15 an hour, taxpayer-funded bailouts to unfunded multiemployer pension plans, bailouts for poorly managed states, and an increase to federal unemployment insurance supplement payments to $400 per week on top of regular benefits.
Any one of these provisions would strike a damaging blow to an already emaciated American economy. Including all four would result in economic convulsion.
$15 an Hour Minimum Wage
A federally mandated $15 minimum wage has been a priority for leftists for nearly a decade, who claim it will lift low-income workers out of poverty.
However, recent reports demonstrate that the minimum wage increase would have the opposite effect. The Congressional Budget Office recently reported that increasing the federal minimum wage from $7.25 to $15 per hour would cost more than 1.4 million workers their job. The estimated job losses could even be as high as 2.7 million.
Additionally, the report states that “cumulative pay would increase by $509 billion for people who were employed at higher hourly wages” but that “pay would decline by $175 billion because employment would be reduced” among those who had previously held a minimum wage job.
In other words, if passed, the minimum wage hike would boost those who are already doing well, but would make the poor poorer.
And while conservatives often point to increases in the price of goods and services as a result of the wage hike, the Congressional Budget Office finds that we infrequently focus on increased federal spending for Medicare and Medicaid.
This is a result of an increase in the price of health care services and of the increase of Medicaid enrollees due to people losing their jobs.
Some Democrat senators have expressed their concern with the wage increase as it would have a devastating impact on their rural communities. Their colleagues would be wise to listen to them.
Multiemployer Pensions and State Bailouts
Private union leaders have been mismanaging their employees’ pension plans for decades, with unfunded liabilities currently estimated at over $673 billion. And amidst an economic crisis, they are looking to send American taxpayers the bill.
In 2019, the House passed a bipartisan bill designed to bail out underfunded pension plans called the Rehabilitation for Multiemployer Pensions Act, which ultimately failed in the Senate. A similar provision was included in last summer’s HEROES Act, which met the same fate as previous measures.
Naturally, Congress must attempt to sneak in cash payments for financially troubled multiemployer pension plans yet again.
Like multiemployer pensions, many states in the union are looking to the federal government to cover them for years of poorly managed budgets.
States like New Jersey, New York, and Illinois had already put themselves in the hole for billions of dollars before the pandemic. It is unfair for taxpayers in well-budgeted states such as Montana, Texas, and Utah to have to bail out states that have run up deficits year after year.
In both instances, the problems predate COVID-19. So why is Congress selling it as pandemic relief? These bailouts prove that House and Senate leaders will sell the American people out to cover for the mistakes of their union pals and buddies in statehouses.
$400 Per Week Unemployment Insurance
Lastly, Congress looks to raise the federal unemployment insurance supplement from $300 to $400 per week on top of what each state already provides in unemployment insurance benefits.
Such an increase would exceed previous wages for many workers. Increasing the weekly unemployment insurance allowance would equate to 15 states doling out $45,000 or more per worker on an annualized basis. This incentivizes anyone making less to simply opt out of the workforce to collect government checks.
Capping federal unemployment insurance at 100% of the worker’s previous earnings is a much more prudent means to help out those who are unemployed in a way that is fair to taxpayers who continue to work and pay into the program.
This Is Not the Right Way to Pass Pandemic Relief
Our lawmakers are behaving like scrambling vacationers who can’t help but to overpack—and it’s going to cost more at the gate. Except we are not headed toward a tropical getaway, rather an economic catastrophe.
If Congress truly wants to help the American people move past COVID-19 and reopen the economy, it would work to include only what is necessary in relief legislation, not slip in longstanding policy priorities and certainly not ones that would further cripple the economy.
Though at this rate, Congress is teed up to squander yet another opportunity to pass meaningful pandemic relief.
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