The Stimulus Bill Subsidizes Defense Contractors While Denying Direct Payments to Workers

Earlier this year, Republican senators slammed the idea of spending money to pay Americans not to work during the pandemic. Only a few months later, a group of GOP senators has signed onto stimulus legislation that would authorize the government to pay idle defense contractors to not work, even as those contractors rack up big profits during the pandemic.

Meanwhile, the same bill excludes bipartisan provisions authorizing direct payments to millions of Americans struggling to survive.

The stimulus legislation released by Republican and Democratic senators yesterday afternoon includes an extension of a program to replace the wages of certain government contractors who miss work due to COVID-19. The program, Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, allows federal agencies to reimburse contractors who are unable to work in person due to the pandemic, and whose jobs do not allow telework, for up to forty hours per week of lost wages. In effect, the program uses government money to reimburse defense contractors for giving paid leave to their employees.

The provision was added to the last page of the 525-page bill after defense contractors sent a letter to congressional lawmakers lobbying for the language. The same bill does not authorize direct payments to millions of Americans — nor does it reimburse small businesses for providing paid leave benefits to their workers.

While the bill would fund $300 a week in new federal unemployment benefits, that’s half as much as Congress distributed under the CARES Act — and millions of people will still see their unemployment benefits lapse on December 26, as it will likely take weeks to reprogram state unemployment systems.

“This is about need and not greed,” said West Virginia senator Joe Manchin, one of the Democratic sponsors of the bill who has called new direct payments to families “a bad idea.” Nearly 12 million US renters will be behind $5,850 in rent by January, according to the Washington Post.

Independent senator Bernie Sanders of Vermont and Republican Missouri senator Josh Hawley have been pushing lawmakers to include language in stimulus legislation giving $1,200 stimulus checks to millions of families. That was not included in the same stimulus that includes the subsidy program for defense contractors.

In July, Senate Republicans introduced a stimulus package that included $11 billion in appropriations to reimburse defense contractors for payments made under Section 3610, following lobbying from the defense industry.

“Section 3610 provides authority for agencies to cover from existing funds certain contractor costs and keep key personnel and skilled workers in a ready state,” lobbying groups and executives from representing defense contractors and other government contractors wrote on December 11.

The provision was first renewed in September as part of a continuing resolution passed by Congress, following advocacy from Democratic senators and defense contractors, and was renewed again last week as part of a one-week government funding agreement.