The Chamber supports policies to stimulate the economy, keep businesses open, and keep Americans safe in the midst of the COVID-19 pandemic. The Chamber applauds Congress for passing the historic CARES Act, which provided relief for businesses, state and local governments, and individuals as they navigate challenges presented by the global pandemic.
The Chamber also recognizes that further action at the federal level is desperately needed to keep our economic recovery on the right track. The Chamber supports legal liability reforms to shield those employers who have done their part in curbing the spread of the coronavirus from frivolous lawsuits. The Chamber also supports federal funding for the state’s depleted Unemployment Insurance Trust Fund, which was forced to acquire a loan exceeding $800 million from the federal government to continue paying unemployment benefits to Kentuckians. Specifically, with regard to the unemployment insurance situation in Kentucky, the Chamber has called for:
- A transfer of federal funds to state UI trust funds equal to the amount of benefits paid due to COVID.
Employers should not be responsible for the cost of unemployment due to COVID-19. Businesses closed due to COVID-19 in response to decisions made by governors and the federal government, causing unprecedented levels of unemployment. The unemployment was not due to the normal functioning of the labor market or the actions of employers.
- Extending the Title XII interest waiver through 2021.
H.R. 6201 provided a waiver of interest on Title XII loans through the end of 2020; an extension through 2021 is needed to avoid significant increased costs for states and special assessments on employers.
- Delaying the application of the FUTA offset credit reduction for a year.
A delay in the FUTA offset credit reduction would assist Kentucky and employers in adjusting to the need for UI trust fund solvency and to avoid further FUTA increases.
- Providing short-term transfers of federal funds to state UI trust fund accounts to reduce the charges to reimbursing employers (employers that pay dollar for dollar reimbursement for claims instead of the tax) due to the COVID-19 recession.
Some employers in Kentucky, including some nonprofit organizations, are reimbursing employers that find themselves in the position of unprecedented unemployment compensation benefit charges to their accounts due to the COVID-19 recession. These employers make payments for actual costs in lieu of tax contributions. A short-term transfer of 100% of charges due to the COVID-19 recession would permit reimbursing employers to manage the increased costs and provide additional funds to reduce unemployment trust fund deficits.
Additionally, the Chamber supports continued temporary, targeted measures to support small and mid-size employers and child care and K-12 schools, and to provide state and local government assistance as part of ongoing recovery efforts.
As part of the CARES Act, numerous tax provisions were enacted on a temporary basis to help businesses address liquidity issues. Given the expected time required to return to the pre-pandemic economy, a further extension of these tax provisions is warranted.
The ability of many parents to return to work is dependent on schools physically reopening and child care being available. Reopening must be safe and should be guided by public health officials. Congress should provide critical financial assistance to aid in a safe reopening.
Just as the pandemic caused a sudden, unanticipated drop in receipts for businesses, it has done the same for state and local government revenue. Without additional federal assistance, state and local government programs and jobs will have to be quickly cut, deepening and lengthening the economic downturn.