CARES Act Flaw: Employees Reject Jobs in Favor of PPP Funds

The policy director of the Foundation for Government Accountability (FGA) wrote Tuesday that some business owners are having difficulty “reopening” their doors because their employees would rather collect funds through the Payroll Protection Program (PPP).

In a column at the Washington Examiner, Sam Adolphsen observed business owners he spoke to in Camden, Maine, said their employees were receiving nearly $1,000 a week for not working through the CARES Act’s PPP coronavirus relief measure.

“It’s a confusing and concerning problem for these business owners because they took the Paycheck Protection Program funds that were supposed to help them keep employees on the payroll,” Adolphsen wrote, citing a report released in early May by the Heritage Foundation that found the unemployment benefits in the $2.2 trillion CARES Act are actually creating devastating consequences for the U.S. economy.

“Instead of bridging the gap, excessive unemployment payments will only increase the breadth and depth of the economic downturn,” research fellow Rachel Greszler wrote in her report, urging Congress to “fix” the CARES Act legislation so that no more than 100 percent of a worker’s prior wages would be provided through the emergency relief program.

Adolphsen explained further:

Business owners across the country are lamenting that people are not coming back to their jobs, even when offered. For small businesses able to survive the quarantine, more will need to be done to get their workers off welfare and back in the workforce. It’s going to require thoughtful action from state and federal leaders, as well as strict enforcement of existing laws regarding unemployment benefits. Thankfully, some of the nation’s governors are making bold and commonsense moves to address the three-headed monster of a health crisis, budget woes, and businesses on the brink of extinction.

Adolphsen praised Florida Gov. Ron DeSantis (R), who fast-tracked COVID-19 protection for vulnerable nursing home residents, and Texas Gov. Greg Abbott (R), who came to the aid of healthcare workers by easing regulations and introducing more flexibility in the delivery of their services.

Without Congress’s intervention to fix the CARES Act flaw, however, the nation is experiencing welfare on steroids. Adolphsen wrote:

Congress created this problem, in large part, by adding a $600 per week unemployment benefit on top of the usual benefit so that many made significantly more money staying at home than they made while working. This is the perfect storm for wide-scale unemployment fraud and abuse.

He applauded the courageous acts of those governors, including Kim Reynolds (R-IA), Phil Scott (R-VT), and Mike Parson (R-MO), who are asserting that workers who refuse to return to their jobs will no longer be eligible for unemployment benefits.

“Reopening the economy only works if people return to work,” Adolphsen wrote.