Senate Democrats propose bill to cover salaries up to $90k and other costs for qualified businesses

A group of Senate Democrats is advocating for passage of a proposal that would provide qualifying companies with taxpayer-funded grants for salaries up to $90,000 and other expenses.

Sens. Mark Warner, Doug Jones, and Richard Blumenthal promoted the plan, titled the Paycheck Security Act, during a conference call with reporters on Friday. Also in the group is Vermont Sen. Bernie Sanders, an Independent.

“All employers who have suffered a month-over-month drop in revenues of at least 20 percent will be eligible to receive grants covering a portion of payroll and benefits for at least the next six months,” reads a draft of the proposed legislation.

“Employers and non-profits of all sizes will be eligible – unless they hold more than 18 months of average payroll in cash or cash equivalents – and are otherwise compliant with the requirements and conditions detailed below,” the draft reads.

The taxpayer-funded grants would be issued to “cover salaries and wages up to $90,000 for each furloughed or laid-off employee, plus benefits, as well as up to an additional 20 percent of revenues to cover fixed operating costs such as rent, utilities, insurance policies, and maintenance.”

Sanders, a democratic socialist and former 2020 presidential candidate, said the average worker would not have to fill out “all kinds of forms” to collect unemployment if the new proposal passes.

“You will continue to receive the payment you previously received and you will continue to receive the health care you received,” he said.

The bill directs the Treasury Department to work directly with the Internal Revenue Service and payroll processors to distribute the grants to qualifying businesses with “initial payments to employers beginning no later than 10 days after enactment.”

Under the new proposal, employers will have to “verify revenue losses” through their 2019 tax returns or "partnerships with payment processors."

The employers who "cannot verify will pay an increased share of federal taxes during each year of profitability after the crisis until the grant is fully recovered and would be "subject to penalties for any fraud," according to the draft.

Evidence of revenue losses due to COVID-19 was not a requirement for the forgivable loans issued to qualifying business in the Paycheck Protection Program. 

Warner said the senators know that a revenue loss requirement is necessary in future coronavirus stimulus legislation for businesses.

“We’ve learned that you have to have some sort of demonstration of revenue loss,” the Virginia lawmaker said. “We’ve learned it’s not great if a large public company that's got lots of money on its balance sheet to be going after public money so we’ve tried to put prohibitions there. Ideally, this would’ve been done at the outset," he also said, referring to the PPP program passed last month.

Warner’s office told Just the News that adding a disclosure requirement to the new proposal is under "serious consideration” so the public knows which companies are receiving taxpayer funds.

Any businesses that have received a Paycheck Protection Program loan or an Economic Injury Disaster Loan would not be eligible for the grants under this new plan, “unless they exhaust these other programs or use the Payroll Security Program grant to pay back their existing loans.”