Washington—Heritage Action for America sent a letter yesterday signed by 20 conservative groups to urge America’s governors to fix the unemployment insurance provision of the recently passed CARES Act.
The letter, which was sent to the governors of Alaska, Colorado, Mississippi, North Carolina, Nevada, New Mexico, Texas, Utah, Virginia, and West Virginia, encouraged state leaders to fix the backwards incentives of the recently passed coronavirus relief legislation. The letter was signed by numerous influential conservative groups, including FreedomWorks, Americans for Prosperity, Club for Growth, the American Conservative Union, state-level groups, and several others.
The letter asked governors to work to fix a provision in the CARES Act that adds an additional $600 per week on top of existing unemployment insurance benefits all laid-off workers will receive for the next four months. These funds will be administered regardless of how much money the individual was earning before the crisis, and regardless of whether their unemployment is related to COVID-19 disruptions.
"It is deeply important for America's workers to emerge from this crisis with paying jobs," said Jessica Anderson, executive director of Heritage Action. "The new UI provision of the CARES Act, unfortunately, will make it more profitable to be unemployed than employed. That's why we are calling on governors around the nation to work to fix the issue, which will help us weather this crisis and quickly get back to normal."
“In light of their efforts and the potential negative economic effects of this provision, we call on all Governors to work closely with Secretary of Labor Eugene Scalia to limit the damage of this provision to both workers and small business owners,” said the letter. “In addition to the federal costs of providing benefits, excessive unemployment will prevent the businesses from ramping up production once it’s safe to do so.”
The letter also calls on governors to “crack down on waste, fraud, and abuse within state unemployment offices and issue warnings to workers and employers that claims will be strictly scrutinized for legitimacy and all wrongful claims will be prosecuted and repaid.”
Heritage Action previously urged the Senate to pass an amendment to the CARES Act to ensure that no worker earns more from unemployment insurance than they previously earned through employment. Jessica Anderson also wrote an op-ed in The Hill with David McIntosh of Club for Growth to ask America’s governors to fix the provision.