Jayapal: Paycheck Recovery Act could be "automatic stabilizer" in crises

The Paycheck Recovery Act could serve as an "automatic stabilizer" in future unemployment crises like the coronavirus pandemic by offering direct grants to affected businesses, the bill's sponsor, Rep. Pramila Jayapal (D-Wash.), said Wednesday at an Axios virtual event.

The big picture: Under Jayapal's proposal, which has bipartisan support and is under consideration in the House Financial Services Committee, the federal government would subsidize the benefits and salaries of qualified workers if unemployment hits 7% or higher. The intent is to limit the number of people filing jobless claims.

• Overwhelmed unemployment systems are backlogged, causing delays in some benefits.
• The proposal would be permanent and would not require congressional approval for each round of grant distributions.

What they're saying: "When you overload an already diminished system of unemployment, you essentially limit a whole bunch of people from getting any kind of support."

• "So if you do the Paycheck Recovery Act, and you expand unemployment, and you provide additional relief... that would have been the kind of comprehensive package where perhaps we could have kept unemployment numbers lower...."

Watch the event, "Reimagining capitalism in America."