Republican Sens. Josh Hawley and Cory Gardner have joined to submit a plan to subsidize payrolls to spur the rehiring of workers laid off during the economic shutdown created by the coronavirus pandemic.
“If the government created stay-at-home guidelines, then the government owes it to the American people to help get them their jobs back,” Hawley, who represents the state of Missouri, said when announcing Gardner’s support for the plan Thursday. “Our economy will continue to hemorrhage unless Congress gets serious about ways to rehire workers and get Americans working again.”
Their proposal, dubbed Rehire America, provides businesses with a 120% tax credit for salaries going to rehired workers that is capped at $50,000. For example, if a rehired employee earns $40,000, then the employer would receive $48,000 from the federal government. If a rehired worker earns $50,000, the employer receives $50,000 from the federal government.
The plan also gives businesses facing revenue shortfalls of at least 20% an 80% tax credit for existing salaries, again, up to $50,000 per employee.
Both lines of support would be delivered to businesses via a “negative” payroll tax, which essentially means that businesses will receive money from the federal government instead of paying it, according to Hawley’s office. Also, the Social Security Trust Fund is held harmless under the plan, meaning it will not receive fewer funds because of the proposal.
These tax credits would be available to businesses of all sizes, including those that took advantage of the Paycheck Protection Program loan program once that support has been exhausted. The plan also provides grants for rent, utilities, mortgage interest, and other fixed costs to qualifying businesses.
The plan is based on the proposal that Hawley released in early April. The senator has spoken to members from his party to garner support for it.
“Senator Hawley has shared his ideas with every member of the Republican caucus. He’s hopeful the Senate will act to stop the economic devastation and put Americans back to work.” said Kelli Ford, a spokesperson for Hawley.
The Senate is currently not expected to take up another coronavirus relief package as Majority Leader Mitch McConnell, a Republican from Kentucky, would like to see how the economy reacts to the three prior relief bills before passing another package.
Still, Hawley’s plea got the attention of Gardner, who faces a tough reelection bid in November and described the proposal as a next step for the CARES Act.
“Without additional support, it’s possible that many jobs will never come back and many businesses will never reopen. Rehire America proposes a flexible program to meet the evolving needs of businesses and help American workers get through this crisis,” Gardner, who represents Colorado, said when announcing his support for the plan.
The senators’ proposal comes as new applications for unemployment benefits totaled over 2.9 million last week, the Labor Department reported Thursday. Since the economy halted in mid-March to slow the spread of the coronavirus, 36.5 million workers have filed for unemployment benefits, an unprecedented figure since the federal government began tracking unemployment in the 1930s.
