Congress may be out of session this week, but when lawmakers return, they will get back to their favorite pastime of spending taxpayer dollars. The next coronavirus relief bill, which will almost certainly be across the ballpark of $1 trillion or more, is inevitable. In addition to increasing the deficit, lawmakers, and particularly Democrats, are willing to incentivize Americans to stay more than six feet away from the economy.
The Cares Act, which was the last coronavirus relief bill, provided federal unemployment benefits of $600 each week for up to four months. These enhanced unemployment benefits, which expire in two weeks, have had an adverse impact because, in many instances, individuals are receiving more money on unemployment insurance than they can earn when they work. This is especially true of service industry and retail jobs.
Democrats are pushing to extend the federal unemployment benefits. In their $3 trillion Heroes Act they rammed through the House, Democrats included an extension of the enhanced unemployment benefits through the end of the year. Not only would extending these benefits drive up the deficit of far more than $2 trillion, but it would also deal a serious blow to small businesses that might need workers as they struggle to pick up the pieces from the lockdowns that sent the economy in a tailspin.
Paying workers more to stay home instead of return to work is a surefire way to force thousands of small businesses all around the country to go under. Some predict that as much as 40 percent of small businesses will never reopen thanks to the lockdowns in the spring. That portion is even higher for businesses owned by minorities who, until the pandemic, had been more successful than at any other time in our great history.
States already provide unemployment benefits, and the economy cannot afford a blanket extension while many areas of the country can safely start to reopen. At least Republicans in Congress have the better idea here with a payroll tax cut. Small businesses need to be able to pay their employees, and a payroll tax cut would also incentivize rehiring. We need a payroll tax cut that makes it easier for the economy to get back on its feet.
Unfortunately, Democrats continue to play politics with the coronavirus and the economy as a whole. Democrats know their odds of taking the White House and the Senate hinge on the state of the economy. If this downturn is the new normal, as many left wing talking heads seem to want to be the real case, an extension of unemployment benefits is a stepping stone on the pathway toward universal basic income.
Why return to work if the federal government pays you more to stay home even after a coronavirus vaccine is available? Can Republicans halt efforts by Democrats to extend federal unemployment benefits and move toward universal basic income? In order to get the country moving again, we will need to stop incentivizing the labor force to stay home. Small businesses deserve all this support they need to safely and responsibly reopen. This starts with no more spending in the next coronavirus relief bill.
Adam Brandon is president of the nonprofit organization Freedom Works.