We knew this was going to happen.
When the CARES Act passed Congress in late March, drivers and other independent contractors were given the ability to collect Pandemic Unemployment Assistance (PUA) from their individual states.
On top of that, the federal government added an extra $600 per week to the compensation. This was a huge relief for many drivers.
At that time, it seemed like having the extra $600 per week through July 31 would be long enough to see us through. A look at the situation now tells us that this benefit has run out before we stopped needing it.
So what will our government do?
As of August 5th, 2020, there are high-level discussions among White House representatives, the Speaker of the House, and the Senate Majority Leader. It would be great if we could report that a deal has been struck, and it calls for an extension of PUA provisions and the federal subsidy. However, as of this writing, the negotiations are at an impasse.
The one thing all major players agree on is the need for another round of stimulus checks. The amount should be around $1,200, but like all topics related to coronavirus relief, the final number is still under negotiation… a very long, complicated, and contentious negotiation.
In this blog post, we’ll examine what drivers need, what’s happening in the negotiations, and what options remain if an agreement doesn’t get reached soon. We’ll include:
- What drivers need
- What the White House wants
- What the Democrat legislators want
- What the Republican legislators want
- What’s likely to happen
- Options if no agreement is reached
What drivers need
Many drivers have been able to go back to work, but others still need support from the PUA program and the federal subsidy. Those of us who were rescued by this safety net are very aware of how necessary this income was, and in some cases still is.
Quite a few politicians make the point that the $600 per week subsidy is often more than workers, including drivers, earn when they’re on the job. Their concern is that the extra money provides an incentive for people to stay home, rather than returning to work. Although this might be the case for some drivers, for others it certainly isn’t because they are unable to return to work.
Those who have been infected with COVID-19, are in quarantine, are part of a high risk group, or live with someone who is at elevated risk, absolutely cannot expose themselves to people who may be carrying the virus—which they certainly are while in the close quarters of their vehicles.
Delivery drivers are also exposed to risk, since they come into contact with restaurant workers and other individuals they encounter when doing pickups and deliveries.
Another consideration is the economies that are still shut down in many localities. While some states and cities are trying to open up and resume an economic rhythm that’s as close to normal as possible, most have not been able to do that.
It can be very difficult for rideshare and delivery drivers to earn money at the same levels they did before the pandemic began. It can also be challenging to come close enough to those levels to make ends meet.
So, even though fewer drivers may need unemployment compensation, the fact is that many still do. Therefore, drivers and all people who find themselves out of a job or unable to earn at acceptable levels need the executive and legislative branches to come up with a solution that will provide continued relief… soon.
What the White House wants
The White House originally proposed that PUA and federal subsidies be continued through September 30, 2020, but that the weekly supplement be reduced to $200. After September 30, the amount of PUA would drop to 70% of an individual worker’s employment income.
When negotiations actually began, the White House proposed a one-week extension of the $600 subsidy, and the Democrats (Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer) soundly rejected it.
After that, White House Chief of Staff Mark Meadows put what he called a “skinny proposal” on the table. This would have included four months of federal subsidies at $400 per week, plus $105 billion for schools, liability protections, and some amount (not specified) for the Paycheck Protection Program.
We don’t know what the final numbers will be, but we do have some idea of what the White House wants:
- Continuation of PUA with limits on the weekly subsidy and duration of payments
- Money that’s earmarked for helping schools open safely
- Provisions to utilize previously allocated funds and/or additional funds for the Paycheck Protection Program
- Extension of the eviction suspension provisions
- Funds for additional costs incurred by the US Postal Service
- Liability protection for businesses,hospitals, and other institutions, to protect them from lawsuits by workers and consumers (the White House has indicated a willingness to strike a deal without this)
What the Democrat legislators want
Speaker Pelosi and Minority Leader Schumer have articulated a broader plan for virus relief. The House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act in May 2020.
Known as the HEROES Act, it would allocate some $3 trillion to the cause of supporting continued unemployment benefits, hazard pay for essential workers, suspension of student loan payments, and aid to states that face fiscal problems due to the impact of COVID-19.
Some more specific elements of the HEROES Act include:
- Continuation of PUA with the $600 weekly subsidy through January 2021
- Suspension of student loan payments, plus the excusal of up to $10,000 in student and private loans
- Rental assistance
- A ban on evictions
- Mortgage assistance
- $900 billion+ in direct aid to states and municipalities, to be allocated as needed
- Healthcare-related spending
- Small business assistance
- Reduction of tax deduction caps for individuals
- Money for the US Postal Service
- Agriculture aid
- Limits reimposed on business loss deductibility
This legislation was passed by the House of Representatives on May 15, 2020, but it is not likely to make it through the Senate without major modifications. In fact, the Republican-majority Senate found so much wrong with the HEROES Act that they introduced a plan of their own.
What the Republican legislators want
Republican legislators maintain that the HEROES Act is excessive, and that many of the allocations it includes have little or nothing to do with COVID-19 relief. In response to the House bill, the Senate passed the Health Care Economic Assistance Liability Protection and Schools, or HEALS Act.
Like all the proposals, the HEALS Act provides for a second round of stimulus checks. There’s also money for the PPP program, and a change in unemployment benefits. It is the same as the original Republican proposal: $200 per week through September 30, and then 70% of the worker’s income after that, up to the individual state cap. Here are some more specific details:
- Additional PPP loans to businesses that are still making 50% or less of previous income
- Continuation of PUA but at $200 per week, and only through September 30, then to 70% of income
- Liability protection for businesses, hospitals, and other institutions to protect them from lawsuits filed by workers and/or consumers
- Healthcare aid aimed at COVID-19 testing, treatments, and vaccines
- Protection from premium spikes for Medicare recipients
- Incentives to manufacture PPE made in the United States
- Tax breaks, including 100% deduction for meals and entertainment
- Money to help schools open safely
What’s likely to happen
At this writing, the negotiations are moving along so slowly they appear to be at a standstill—but they are moving. White House representatives went to the Republican Senate leaders to complain that they cannot get the Democrats to move. The Democrats remind Republicans that their proposed HEROES Act was available for review in mid-May and was basically ignored. So here we are.
Of course, Democrats and Republicans always see things differently, but why is this particular negotiation so difficult?
For one thing, the two parties are pretty much divided as decisively as the Hatfields and the McCoys. There isn’t much reaching across the aisle these days. The more pressing reason for the stubborn contention, though, most likely stems from the fact that this is an election year.
Each side is always jockeying for position, but now they’re pressing harder than usual to make the other side seem uncooperative, unreasonable, and of course, not worth voting for in November.
All this is getting a bit unsettling, as Congress is scheduled for its yearly August recess. But according to an August 3 CBS News report, House Majority Leader Steny Hoyer said the recess will not happen “until such time as we adopt COVID-9 legislation.”
Certainly the idea of missing August recess might motivate most of Congress… but if that doesn’t, the White House just added new incentive at the August 5 Presidential press briefing.
President Trump hinted that, if no agreement is reached, he could use executive orders to extend PUA and eviction suspension, as well as other provisions designed to help individuals who continue to be directly impacted by COVID-19.
It’s our guess that (at the eleventh hour) there will be an agreement, an unimaginable amount of tax dollars will be spent, and there will be some form of PUA for drivers in need that should extend into the foreseeable future.
The details are yet to be divulged, but as soon as they are, we’ll get them to you—just keep watching for our next post.
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