Economy

GOP COVID-Relief Plan Includes New Stimulus Checks And PPP, But Lower Jobless Benefits 

stimulus

The opening salvo in what is sure to be a contentious fight for a new economic stimulus package was unveiled Monday (July 27). Senate Republicans officially unveiled their $1 trillion package, which proposed cutting extra pandemic-related unemployment benefits to $200 a week from the current $600 and included another $1,200 flat payment for Americans who make under $120,000.

The Senate Republican proposal will also include $105 billion for schools, $16 billion for COVID-19 testing, a second round of small business loans from the Paycheck Protection Program (PPP) and tax incentives for employers to rehire workers. It will also include liability protections for businesses, schools, hospitals and nonprofits.

The plan was unveiled by Senate Majority Leader Mitch McConnell (R-Ky.). Its call for unemployment restructuring is bound to be hotly contested.

According to CNBC, “while the Senate GOP leader did not specify how the party would construct the unemployment benefit, reports Monday indicated the party aims to set the enhanced insurance at 70% of a worker’s previous wages, and set the sum at an additional $200 per week while states figure out how to implement the new policy — a third of what individuals received previously. States have worried about their ability to quickly figure out a policy change as Americans wait on unemployment insurance.”

That part of the proposal immediately drew fire, as at least one government agency said it could take some states the rest of the year to implement.

According to a memo prepared by the National Association of State Workforce Agencies, obtained by Bloomberg News, replacing the expiring $600-a-week supplements with a percentage of a worker’s former wages could take most states eight to 20 weeks to implement. “Reprogramming aged computer systems would take the states a wide range of timelines to implement, with some moving faster,” according to Bloomberg.

“It’s one thing to add this administrative burden when states don’t have any other issues, but doing this in a period with so many things coming at states at once, it’s just a nightmarish proposal,” said Michele Evermore, a senior researcher and policy analyst for the National Employment Law Project.

However, the package is likely to get a thumbs up from the National Retail Federation, which made lobbying for a new version of the PPP one of its top priorities.

“It is vitally important to get it right on this new round of relief,” the federation said in a statement. “The packages of the past few months provided an important bridge for some businesses that helped them get through the crisis. Many initiatives, notably the landmark Paycheck Protection Program, delivered timely relief to the smallest employers and helped avert a much deeper employment crisis. Others, such as the Main Street Lending Program, were too slow and poorly designed to deliver the urgently needed liquidity they were intended to provide to mid-size companies. As a result, some mid-size retailers have sought bankruptcy protection while others have found credit only under the harshest terms.”

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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