Biden proposes federally funded subsidies to keep workers on payrolls

Biden proposes federally funded subsidies to keep workers on payrolls
© Greg Nash

Former Vice President Joe BidenJoe BidenChina eyes military base on Africa's Atlantic coast: report Biden orders flags be flown at half-staff through Dec. 9 to honor Dole Biden heading to Kansas City to promote infrastructure package MORE on Thursday proposed federally funded subsidies for businesses to keep employees on payroll when they would otherwise need to lay them off in times of economic distress.

Biden, the presumptive Democratic nominee for president, called for the national adoption of state-run “short-time compensation” programs amid the drastic spike in joblessness caused by the coronavirus pandemic. 

Such programs allow businesses facing financial peril to cut their workers’ hours with the federal government making up the difference in lost wages.


Short-time compensation programs are intended to fend off business bankruptcies and keep workers connected to their employers and their employment-linked health benefits during economic downturns. Doing so could help pave the way to quicker rebound when the economy begins to improve.

“We should be committed to keeping as many people as possible attached to their employment, so they can easily return to work when appropriate, and maintain their income and benefits,” Biden said in a statement.

“This is more than just the right thing to do — it is the surest road to a rapid recovery, because the faster everyone returns to their jobs, the faster we can improve demand and get our economy running again,” he said.

More than 5 million Americans filed new claims for unemployment benefits last week, the Labor Department reported Thursday, joining roughly 17 million other workers who were laid off as businesses closed to slow the spread of the virus.

A $2.2 trillion economic rescue bill signed by President TrumpDonald TrumpBiden heading to Kansas City to promote infrastructure package Trump calls Milley a 'f---ing idiot' over Afghanistan withdrawal First rally for far-right French candidate Zemmour prompts protests, violence MORE in March expanded and lengthened unemployment benefits to help millions of workers who’ve lost their jobs pay for basic expenses until they can work again.

The bill also provides 100 percent federal funding for short-time compensation programs capped per person at the total amount in unemployment benefits they would have received had they lost their job, and $350 billion in forgivable loans to small businesses meant to cover payroll and other essential expenses.

Twenty-six states currently offer a short-time compensation program, which is credited by some economists for part of Germany’s strong rebound from the 2007-09 recession. Biden said Thursday he would use “a mix of conditioned assistance and additional incentives” to expand such programs across all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

Biden also proposed expanding the program to help businesses cover rent and other necessities, a tax credit to help cover employee health benefits, raising caps on hours reductions and automatic triggers for emergency aid to kick in and extend.