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Law360 (June 9, 2020, 10:22 PM EDT ) U.S. Labor Secretary Eugene Scalia seemed supportive of Senate Republicans' intent to revoke a pandemic-related weekly enhancement to unemployment benefits on July 31, saying Tuesday that "the circumstances that originally called for the $600 plus-up have changed" and "policy will need to change as well."
Scalia's comments came during a contentious four-hour hearing on unemployment before the Senate Finance Committee, during which Republicans aggressively pushed for ending the $600 enhancement as soon as possible, while Democrats advocated extending it six months as the House of Representatives has voted to do.
Labor Secretary Eugene Scalia testified before a Senate committee Tuesday about unemployment insurance and the novel coronavirus pandemic. (AP Photo/Alex Brandon)
"The $600 per week benefit was the right thing to do at that time in a closing economy, and I am mindful of the concerns that that might result in people turning down work," Scalia said. "We've made it a priority for the department ... to make sure that doesn't happen."
Scalia said the agency has discussed the prudence of Congress phasing out the $600 enhancement rather than revoking it outright. "There's been discussion of having a smaller benefit — maybe $250," he said.
Republicans hammered home their disapproval of the $600-per-week extra benefit during their questioning of Scalia, the only witness called during the hearing's first three hours. Finance Committee Chairman Chuck Grassley, R-Iowa, opened the hearing by ripping into the extra benefit, calling it a "problem" that the enhancement allows five out of every six unemployment recipients to make more money out of work than they do at work.
Sen. Sherrod Brown, D-Ohio, said the only problem revealed by this statistic is that American jobs don't pay well enough.
"It's a pretty clear takeaway here that the companies didn't pay them enough to begin with," Brown said, asking Scalia if raising the minimum wage to $15 would ensure Americans would earn more at work than on the enhanced unemployment benefits.
Scalia said it wouldn't, because workers earning $15 per hour would only make $600 per week before taxes, so they'd end up with less money than they could get receiving the unemployment benefits authorized by the bipartisan Coronavirus Aid, Relief and Economic Security Act, which was signed into law March 27.
The relief measure authorized a $600 weekly benefit enhancement for all unemployed workers because states don't have the staffing capabilities to determine each worker's salary individually and replace that salary, said Heidi Shierholz, the director of policy at the Economic Policy Institute and the Department of Labor's former chief economist during the Obama administration. The $600 number was settled on because it would make the average American worker whole, she told Law360 Tuesday.
Against Republicans' adamant insistence that the extra payment go, Finance Committee Ranking Member Ron Wyden, D-Ore., asked Scalia whether the situation has changed at state unemployment agencies.
"Do states have the capacity right now to implement 100% wage-replacement on an individual basis?" Wyden asked. "You said they didn't have it during negotiations."
Scalia didn't answer, telling Wyden he would talk to him about it privately. Wyden pressed him for "an answer on the record today," then told Scalia "it's sounding like a no" when the Trump administration official kept mum.
The fate of the $600 extra unemployment benefit is so far undecided, with the Democratic-led House voting last month to extend the enhancement six months in a $3 trillion coronavirus relief package the majority-Republican Senate refused to consider.
Wyden and several of his fellow Democrats advocated for the extension during Tuesday's hearing.
"Between the CARES Act and federal lending programs, big corporations are getting trillions of dollars in support to weather this crisis, and now Senate Republicans are saying, 'We're going to cut what the little guy gets, maybe in half?'" he said. "The system is already rigged to favor the powerful and wealthy. We shouldn't stack the deck any further."
Tuesday's hearing also gave Democrats the opportunity to pillory Scalia over the Department of Labor's track record on work safety enforcement during the coronavirus. The DOL's work-safety agency, the Occupational Safety and Health Administration, has issued just one citation to an employer despite receiving about 5,000 coronavirus-related workplace safety complaints, an OSHA official told the House of Representatives in late May.
Scalia attempted to defend the agency by saying it has issued industry-specific guidance for workplace safety during the pandemic.
Sen. Robert Menendez, D-N.J., said that's not nearly enough.
"Instead of guidance, you should be issuing emergency temporary standards that make a clear example of what's acceptable to return to work safely and what's not acceptable," he said. "One citation out of 5,000 [complaints] is unacceptable."
--Editing by Adam LoBelia.
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