In the throes of the 2008 financial crisis, Obama’s former White House Chief of Staff Rahm Emanuel famously quipped, “you never let a serious crisis go to waste.” Now, 12 years later and in the midst of a different kind of crisis, lawmakers are singing a similar tune as they ram a coronavirus “stimulus” package down the throats of American taxpayers. On Wednesday, March 11, House Speaker Nancy Pelosi (D-Cali.) and other top Democrats introduced a no-holds-barred legislative package creating a new federal sick leave program and ramping up unemployment insurance. Democrats mistakenly believe that the strong hand of government can keep the coronavirus at bay, when in reality, only a robust private response can keep patients safe and the economy afloat. As hundreds of thousands of patients worldwide fight COVID-19, half-baked policy prescriptions at taxpayer expense are certainly not what the doctor ordered.
The multi-billion dollar package (no exact figures as of time of writing) significantly expands unemployment insurance reimbursements for states and, astoundingly, creates a one-year federal paid sick leave benefit program financed via Social Security. Coronavirus victims, quarantine participants, or those caring for loved ones with the ailment are eligible to receive compensation “equal to 2/3 of the individual’s average monthly earnings” (and not exceeding $4,000 a month) for up to three months’ time. This gargantuan program would put taxpayers on the line for significant sick leave expenses, while crowding out private companies’ already-generous paid sick leave programs. According to the U.S. Bureau of Labor Statistics, “Seventy-three percent of private industry workers had paid sick leave benefits available from their employers in March 2019 [latest available data].”
It’s bizarre that lawmakers insist on duplicating benefits for more than 7 in 10 workers on taxpayers’ dime instead of trying to find a narrow way to target (i.e. means-testing) the workers who do not have those benefits. Additionally, a one-size-fits-all federal paid sick leave program fails to consider the array of health differences faced by millions of patients currently under doctors’ watchful eyes. Because there’s a limited number of COVID-19 tests available, “suspicious” patients who have come into contact with COVID-19 patients are encouraged to self-quarantine out of an abundance of caution.
Many of these individuals are perfectly healthy in their own right or only have a handful of mild symptoms and can effectively work from home. But, these individuals would be given the green light to take paid sick leave under the proposed legislation, since “eligible individuals” include individuals instructed to keep to themselves by direction of a healthcare provider, employer, or a local, state, or federal official. And it’s hard to argue with taking free money for no work, instead of…well, working from home for money. Thanks to the poor, expansive wording of the Democrats’ bill, millions of workers would rush to sideline themselves at a time when a contagion of fear and cancelled contracts is wreaking havoc on the economy.
There are far better alternatives to this anti-stimulus being rushed through the House. The federal government can be doing far more to encourage telework, including increasing the generosity of the home office tax deduction offered for the business use of taxpayers’ homes. Currently, Uncle Sam lets remote workers deduct $5 per square foot of their home office (up to 300 square feet of space) off of their taxes. Ahead of Tax Day lawmakers can double this write-off and send a message that there’s nothing wrong with working from home. Members of Congress should also follow President Trump’s suggestion to lower payroll tax rates and let workers keep more of their hard-earned dollars during such a scary, uncertain time in America. These pro-growth policies, not ill-considered, open-ended spending plans, will be key to our recovery from the coronavirus.
The country is looking to Congress and the president for leadership in this time of crisis. Writing a blank check will do nothing for the physical or fiscal health of the nation.