The Washigtnon Post - 03.04.2020

(Joyce) #1

friday, april 3 , 2020. the washington post eZ re A1 7


the coronavirus pandemic


BY TONY ROMM

For millions of Americans who
drive for Uber, deliver food with
Postmates and rent houses on
Airbnb, the $2 trillion coronavi-
rus aid package extends an eco-
nomic lifeline — offering weekly
checks for those trapped at home
as a result of the outbreak.
But it could take weeks or more
before any relief money reaches
the pockets of cash-strapped
workers, according to labor rights
activists, who say delays threaten
to put some people’s h omes, fami-
lies and livelihoods in jeopardy
amid this historic economic
downturn.
In California, Illinois, Wash-
ington and a slew of other states,
unemployment officials are sig-
naling they aren’t yet ready to
start processing aid for laborers
in what is known as the gig econo-
my. Already inundated with re-
cord numbers of jobless claims
and lacking federal guidance,
many states say they need more
time to set up a new system that
can process additional benefits —
and some say they may not be able
to accept applications until later
in April.
Until now, many gig workers
were ineligible for traditional un-
employment benefits, even if
driving passengers or delivering
goods was their primary source of
income. That’s because they are
often categorized as independent
contractors, not full-time employ-
ees, for companies such as Airb-
nb, Uber, Lyft and Postmates.


Those companies don’t r emit pay-
roll taxes to the government on
behalf of on-demand laborers,
making it difficult, if not impossi-
ble, for workers to take advantage
of safety-net programs.
Congress sought to remedy the
gap temporarily. Part of the coro-
navirus stimulus bill, known as
the CARES Act, which was enact-
ed by President Trump on Friday,
includes a federally funded pan-
demic relief program for an array
of self-employed people. But it
has become increasingly clear to
some in the industry that delays
in disbursing aid could make it
hard for them stay afloat finan-
cially.
Anwaar Malik, a driver for
Uber a nd Lyft i n Long Island, said
he applied for unemployment aid
in New York, the epicenter of the
U.S. coronavirus outbreak, imme-
diately after he learned the
CARES Act had become law. At
the time, though, New York did
not appear set up yet to process
his claim, leaving Malik’s applica-
tion in limbo.
By Wednesday, Malik said, he
had made more than 1,000 calls to
follow up with the state’s unem-
ployment office, mostly without
success. That same day, the New
York State Department of Labor
said it put out a step-by-step
guide to help gig workers apply
for aid in an effort to address the
difficulties other on-demand la-
borers have also faced. But those
resources weren’t readily appar-
ent to drivers like Malik, who
offered a grim assessment that

afternoon about the future.
“Drivers’ lives are at risk if they
don’t get this money,” he said.
The hardships facing gig econ-
omy workers, and vexing state
and federal officials, illustrate the
mammoth undertaking involved
in bringing the country’s corona-
virus recovery effort online. It
takes time to dole out billions of
dollars in aid and establish new
government programs — time
leaders lack if they hope to blunt
the havoc wreaked by this deadly
pandemic. The magnitude of
their task came into sharp relief
Thursday, after officials reported
a record-breaking 6.6 million
Americans filed unemployment
claims last week.
As businesses continue closing
their doors — or issuing mass
furloughs or layoffs — workers
have flooded state employment
agencies with pleas for jobless
aid. Their websites are bogged
down and their phone lines are
flooded, leaving many Americans
with long waits for financial help
at a moment when they’re strug-
gling to pay bills. Some states
have told residents to apply for
benefits only on certain days, de-
pending on the first letter in their
last names, to ease the conges-
tion.
The coronavirus law also re-
quires states to administer new
benefits to people who are self-
employed, a category that in-
cludes workers whose primary
income comes from working on
behalf of Airbnb, Uber and other
companies in the gig economy.

The new relief fund provides
weekly aid to those affected
Americans, along with the same
extra $600 laid off and fur-
loughed full-time employees are
slated to receive for the weeks
they are out of a job.
Already, gig workers and labor
activists are scrambling to obtain
the money — and reporting diffi-
culties in navigating the govern-
ment’s complicated relief pack-
age. In California, the home base
for Uber, Lyft and other Silicon
Valley giants, state officials don’t
appear ready to handle applica-
tions, said Veena Dubal, an asso-
ciate professor at the H astings
College of the Law at t he Universi-
ty of California, who is an advo-
cate for gig workers and labor
rights. She added that some gig
workers who have applied for
benefits over the past few days
have been told they aren’t e ligible.
California’s Employment De-
velopment Department, which
oversees unemployment pay-
ments, said Wednesday that it
plans to act swiftly but is awaiting
key guidance from the U.S. Labor
Department, echoing a concern
shared by other states, including
Maryland and Virginia. The La-
bor Department did not respond
to a request for comment.
Dubal said it’s a sign of the
challenge millions of gig workers
nationwide are bound to face.
“There is a lot of confusion about
how the states are going to be
rolling out the benefits provided
in the CARES Act,” s he said.
Accepting applications, deter-

mining eligibility for benefits and
processing payments for these
previously uncovered workers is
likely to be resource-intensive for
many states, and through no fault
of their own. Their budgets are
dwindling, and their staffs may be
home as a result of the coronavi-
rus, adding to the possibility it
could be weeks before some work-
ers see their first check.
By Wednesday, unemployment
officials in Colorado and Pennsyl-
vania advised ride-share and de-
livery drivers to hold off on seek-
ing aid until their systems were in
place. Illinois’s website simply
said: “Please do not apply at this
time.”
On its website, Washington
state also said it needed time and
acknowledged that necessary up-
grades would not be “complete by
mid-April.” However, it reiterated
the workers are eligible for pay-
ments from when their employ-
ment was first disrupted by the
coronavirus outbreak. The state’s
Employment Security Depart-
ment did not respond to a request
for comment.
Meanwhile, in Maryland, the
state’s computers are “currently
not set up to process these new
CARES Act programs immediate-
ly,” said Fallon Pearre, a spokes-
person for the unemployment
agency. Pearre said it would take
time to “create new IT systems,
modify our current technical sys-
tems, train staff, and conduct
tests.”
Adding to the challenge are gig
economy companies themselves.

For years, Uber, Lyft and their
industry peers have contended
their workers are not employees
and sought to stave off regulation
that would upset their business
models. As a result, these compa-
nies have avoided paying taxes
into the pot of government funds
that ultimately covers workers
when they are out of a job. Amid
the pandemic, their approach has
prompted fresh criticism that Sil-
icon Valley essentially received an
undeserved government “bail-
out.”
With new unemployment pro-
grams coming online, some activ-
ists said the companies have a
new obligation to do their part —
including by making wage data
available to states so that they can
process claims more quickly.
“It’s a significant hurdle for
drivers, which these companies
could solve tomorrow,” said Rey
Fuentes, a fellow at the Partner-
ship for Working Families, which
advocates in the San Francisco
Bay area for greater benefits for
gig workers.
In response, Uber spokeswom-
an Susan Hendrick said in a state-
ment that the company would
work with “states as they estab-
lish their process for independent
workers to apply for unemploy-
ment.”
Lyft spokeswoman Julie Wood
said the company had also been in
talks with states, adding it recent-
ly held a call with drivers to
inform them about possible bene-
fits.
tony.romm@washpost.com

Gig economy workers are facing a long wait for promised relief benefits


BY ERICA WERNER
AND PAUL KANE

House Speaker Nancy Pelosi a n-
nounced on Thursday the creation
of a new select committee with
subpoena powers to scrutinize the
Trump administration’s response
to the coronavirus pandemic and
its m anagement of the new $2 tril-
lion economic r escue law.
“Where there’s money, there’s
also frequently mischief,” Pelosi
(D-Calif.) said as she announced
the creation of the special biparti-
san panel she said would be fo-
cused on rooting out waste, fraud
and a buse.
Pelosi’s announcement comes
amid growing clashes between
congressional Democrats and the
Trump administration regarding
oversight of the new rescue legis-
lation and a $500 billion fund
controlled b y the Treasury Depart-
ment. President Trump has to ap-
point a new inspector general to
oversee that fund but has already
signaled opposition t o the scope o f
that person’s m andate.
Pelosi told reporters on a con-
ference call that her new commit-
tee would be modeled after the
World War II-era committee run
by then-Sen. Harry S. Truman
(D-Mo.), whose role in investigat-
ing the i mplementation of billions
of dollars in defense contracts
eventually led to his elevation to
vice president.
She said this new committee
needed to serve as an everyday
watchdog of the m ore than $2 tril-
lion already allocated to fight the
novel coronavirus and the virtual
lockdown it has placed on the
economy.
The House S elect Committee on
the C oronavirus, as Pelosi called it,
will be chaired by Rep. James E.
Clyburn (D-S.C.), who is the No. 3
Democratic leader as majority
whip. No further details were pro-
vided about how many lawmakers
would serve on t he panel.
In a statement, Clyburn said
“we cannot let the assistance di-
rected toward addressing this cri-
sis accrue in an unequitable fash-
ion.”
Democrats have alleged that
the White House and R epublicans
are prioritizing assistance for
businesses over households, and
Clyburn said h is committee would
be scrutinizing this dynamic
closely.
“In the recovery from previous
crises like the Great Depression
and various recessions, parts of
our great country were left be-
hind, having not been treated eq-
uitably,” he said. “We cannot allow
that to happen i n this pandemic.”
The new oversight c ommittee is
being c reated in addition to sever-
al other oversight mechanisms,
which were established as part of
the $2 trillion coronavirus spend-
ing law that was enacted on Fri-
day. But some Democrats are al-


ready expressing concern that
Trump could try to circumvent
oversight for his administration’s
decisions. The law established a
new special inspector general to
oversee the Treasury fund, a sepa-
rate commission appointed by
Congress also e mpowered to mon-
itor that fund, and a Pandemic
Response Accountability C ommit-
tee, composed of existing inspec-
tors general from multiple agen-
cies, to oversee the entire federal
response to the coronavirus.
Republicans voiced immediate
skepticism about Pelosi’s move to
stand up a n ew s elect committee.
“This seems really redundant,”
House Minority Leader Kevin Mc-
Carthy (R-Calif.) told reporters af-
ter Pelosi’s announcement.
McCarthy also expressed “con-
cerns” about how the committee
would be created, since the House
is on a long recess and no one
knows when they are coming b ack
given health concerns from the
coronavirus. Several lawmakers
have tested p ositive.
Pelosi said the new committee
will have the investigative author-
ities of any congressional over-
sight panel. “It’s no use having a
committee unless you have sub-
poena p ower,” s he s aid.
Since Democrats took control
of the House in January 2019,
Trump and his administration
have repeatedly ignored House
subpoenas related to the Mueller
report, the Ukraine investigation
and other issues, forcing Demo-
crats to ask the courts to compel
former and current administra-
tion officials to comply.
The select committee would
supplement oversight mecha-
nisms that Democrats pushed to
include in the $2 trillion rescue
package signed into law on Friday.
Some experts are already ques-
tioning how effective those mech-
anisms can be.
Democrats have called on
Trump to quickly nominate a new
inspector general tasked with
overseeing how Treasury makes
loans and loan guarantees as part
of the $500 billion program. This
process could take months,
though, as the person must be
nominated by the White House
and confirmed by the Senate,
which is not in session because of
coronavirus fears.
Trump has already suggested
he may try to block one of the
inspector general’s most impor-
tant tools: the ability to alert Con-
gress if the executive branch de-
nies requests for i nformation.
“There’s a bunch of oversight
provisions [in last week’s $2 tril-
lion law], and t hey are not as mus-
cular as one might want,” said
Adam J. Levitin, a professor at
Georgetown University Law who
played a key oversight role during
the financial crisis bailout pro-
grams of 2008, and also consulted
with Democrats on the oversight
language in the n ew b ill.
Another oversight piece — a
Pandemic Response Accountabili-
ty Committee, composed of exist-
ing inspectors general f rom m ulti-
ple agencies — will oversee the
entire federal response to the cor-
onavirus, including but not limit-

ed to the federal spending under
the three pieces of coronavirus
legislation e nacted so f ar, and w ith
a mandate to examine any future
legislation.
Republicans and t he Trump ad-
ministration agreed to the provi-
sions, although at lower funding
levels than Democrats sought. In
the case of the oversight of the
Treasury fund, the provisions
were among the last items agreed
to as Schumer, Treasury Secretary
Steven Mnuchin and Majority
Leader Mitch McConnell (R-Ky.)
exchanged offers during late
nights at t he C apitol last week.
Democrats also wrote in provi-
sions requiring swift public d isclo-
sure of loans and prohibitions on
loans going to any Trump organi-

zation b usiness.
“We were fighting for major
guardrails, including limits in-
volving t he Trump f amily, s o if you
ask me about how we went from
virtually nothing to what we got, I
would tell you I think there was
real progress,” said Sen. Ron
Wyden (Ore.), top Democrat on
the Finance Committee. “There’s
obviously a l ot more t o do.”
The limits of the oversight
mechanism in the legislation be-
came apparent as soon as Trump
signed it into law, w hen h e issued a
signing statement disputing the
authority of the new inspector
general to notify Congress if the
executive branch was not provid-
ing requested i nformation. Trump
suggested he w ould not necessari-

ly allow such notifications. The
signing statement also disputed a
requirement for members of the
Pandemic Response Accountabili-
ty C ommittee to consult w ith C on-
gress before hiring staff.
Neil M. Barofsky, who served as
the first inspector general for
TARP, said i t was c rucial f or him to
have the ability to notify Congress
when an executive branch agency
was failing to cooperate with a
request for information. Such a
notification — or more often, the
threat of one — was the one real
tool he had to force Treasury De-
partment o fficials or others to pro-
duce information they w ere r eluc-
tant to divulge.
If Trump f ollows t hrough o n his
signing statement and blocks the

special inspector g eneral from n o-
tifying Congress of resistance
from the executive branch, “that
potentially will hamstring the
ability of the IG to be effective,”
Barofsky said.
“If they have no recourse...
that could be very problematic,” h e
said.
Pelosi’s decision to create a spe-
cial congressional committee will
give lawmakers more access to
information, as well as subpoena
powers if they believe the White
House isn’t being forthcoming
with key details.
The experience of TARP also
made clear the i mportance of who
was in key roles. Barofsky had an
outspoken, activist approach, as
did the chair of TARP’s version of
the Congressional O versight C om-
mission, Elizabeth Warren. The
current Democratic senator from
Massachusetts was tapped for the
panel by then-Senate Democratic
Leader Harry M. Reid (Nev.) and
was elected by fellow members to
chair it.
The structure of the coronavi-
rus Congressional O versight Com-
mission, however, is slightly dif-
ferent, specifying that it will be
chaired by the member selected
jointly by McConnell and Pelosi. It
may be difficult for the two of
them to agree on a selection, and
then it might not be a person who
is outspoken in either direction.
“There are a lot of things the
administration could do to try to
frustrate oversight, starting with
the s pecial IG f or pandemic r ecov-
ery efforts,” s aid Levitin, who had
served as special counsel to War-
ren’s oversight panel. “Will the
president put f orth a nomination?
How fast will he act? And will he
put f orward someone w ho is l ikely
to take a close look at things or
twiddle his or her t humbs?”
The administration h as not said
whether Trump will nominate
someone for the job, and w ho that
person m ight be if h e does.
A senior administration official
said Trump is deeply skeptical of
inspectors general and saw the
move to add the provision to the
relief package as a w ay t o undercut
or hurt him and his administra-
tion. He believes the inspector
general could look for ways to
criticize him and work with the
Democrats, said the official, who
spoke on t he c ondition of a nonym-
ity to describe the president’s
views.
The special inspector general
for TARP is still in action more
than a decade later, with an annual
budget of more than $20 million
and around 85 employees, said
Christy Goldsmith Romero, the
person who is now in t hat role. The
agency continues to conduct au-
dits and prosecutions and l ast year
recovered n early $ 900 million.
However, the special inspector
general for the coronavirus re-
sponse does not have such an
open-ended mandate: The office
will terminate five years after en-
actment of the law.
erica.werner@washpost.com
paul.kane@washpost.com

Josh Dawsey and Felicia sonmez
contributed to this report.

New committee to monitor management of $2 trillion law


salwan georges/the washington Post
Rep. James E. Clyburn (D-S.C.), who is the No. 3 House Democratic leader as majority whip, will chair
the Select Committee on the Coronavirus, Speaker Nancy Pelosi (D-Calif.) announced on Thursday.

Bipartisan panel to root
out waste and abuse
faces early GOP criticism
Free download pdf