Oregon Senator Ron Wyden wants to tie expanded unemployment insurance to state unemployment rates during the COVID-19 pandemic. He joins Yahoo Finance's On The Move to discuss.

Video Transcript

ADAM SHAPIRO: To help us understand where we're headed with this unemployment report, we want to invite into this train Senator Ron Wyden. He is the top Democrat on the Senate's Finance Committee, and he is joining us now to talk about the ways we can help our fellow countrymen who are caught in the COVID-19 crisis with temporary or possibly long-term unemployment get through this crisis. Senator, thank you for joining us on Yahoo Finance.

RON WYDEN: Thank you.

ADAM SHAPIRO: You're calling for an extension, perhaps, of unemployment benefits. Can you simply explain to us what that would entail with so many people now needing that money?

RON WYDEN: First, I want people to understand what these new numbers today mean. This is a hellaciously powerful one-two economic punch because it is gigantic in size, and it happened virtually overnight. So what it does is it makes it clear that this crisis is ongoing, and the Congress has to step up and take action.

What I proposed yesterday-- because I put together the agreement for the $600 extra per week each week until July 31 and the additional benefits for the self-employed, the gig workers and the like, that, in effect, expires at the end of July. So what I am proposing is a market-oriented approach going forward from there. I would, in effect, put in place a trigger that would tie the benefits to the unemployment rate. And of course, with the rate soaring through the roof, that means workers are still going to need a boost.

JULIE HYMAN: Senator, it's Julie here. Thank you for joining us. And so just to get a little more granular with this, this would account for the regional differences in the unemployment rate, correct? So state by state, if the unemployment rate is higher in one state than a neighboring state, that state where it's higher will have a longer run of these extra benefits?

RON WYDEN: That's exactly right. So let's take today's situation. Under my approach, for example, if a state's unemployment rate is at 11% or higher, they would still get the full boost.

JESSICA SMITH: Senator, Jessica Smith here. I wanted to ask about the pushback that you're going to see from Republicans on this. I asked Senator Grassley, the chairman of the Finance Committee, I asked his office about that, and he said-- a spokesperson said that making anything automatic right now just doesn't make sense. What is your response to that? And how do you plan to try to build support among Republicans and the Finance Committee?

RON WYDEN: Well, first-- first of all, the agreement for the extra benefits were put together in the finance room with Secretary Mnuchin. And I was kind of struck when this group of Republicans then went to the floor of the Senate and said they wanted to unravel the extra help for workers. I've come to call those senators the "chutzpah caucus," because after they went to the floor to try to take back the extra benefits, they went out and put out press releases taking credit for the extra help for workers.

In fact, one member-- one of the leadership said that the extra benefits were a lifeline. Those were his words and not mine. So I think that Republicans are going to have problems stiff-arming workers anymore given these new numbers. And I think the proposal I'm talking about, which ties the extra help to real-world market conditions, is going to look a lot better than some of what I was asked about yesterday, where House Republicans were saying, let's just cut the benefits and that'll be that.

- Senator, I know you're not an economist, but I am curious to see what assumptions you're operating under right now. When you think about 33 million people who are unemployed, you're talking about extending the benefits. What is your assumption right now in terms of how many of those jobs will actually come back as a result of the rehiring spurred by PPP?

RON WYDEN: What I try to do is focus on objective measures. So for example, the Congressional Budget Office has made it clear-- and they are kind of the independent arbiter that we look to on the Finance Committee for trends-- they have made it clear that we are looking at unemployment in very significant numbers for quite some time into the future. I also think we know, for example, that whole sectors of our economy are going to look very, very different.

I think, for example, the restaurant business is going to look very differently. So what I try to do is focus on objective criteria. And when you have independent government analysts and those in the private sector who don't come at this from a Democratic or a Republican standpoint say that this unemployment situation is not going to get better real-- real quickly, those are the kinds of measures that I focus on.

ADAM SHAPIRO: Senator, I want to talk to you about-- more about the PPP. There have been criticism that there wasn't enough oversight about how that money was spent. Can you address how you put that genie back in the bottle now that it's out?

And the other issue is it's really complicated. We're hearing from small business owners, they're trying to figure out what percent of the loan might be forgivable, whereas what might not be forgivable. And it's just very confusing for them.

RON WYDEN: Well, first of all, I want you to know what I'm going to do next for the-- those businesses, because I think in this debate, the people who have been forgotten in the business community are the smallest of the small businesses. And these are folks who primarily have liquidity problems. They are just trying to figure out how to pay the light bill and the insurance bill.

I've heard from companies that are running breweries and-- and the like, the inventory goes stale. And what I'm going to propose in this next package is to say that if you're talking about the smallest of the small businesses, let's not put them through the banking system from A to Z again. Let's say that if based on your last tax return you have a million dollars or less in gross and less than 50 employees, you would be able to get direct cash assistance in order to pay for those kinds of things like light bill.

JESSICA SMITH: Senator, I'm curious what you're hearing from treasury. I know you have sent letters with Chairman Grassley, one of them asking him to allow businesses to deduct the expenses that they're paying with PPP money, also about how much businesses can use on non-payroll expenses. What are you hearing from treasury? And if treasury doesn't make any changes, do you expect Congress to have to step in and pass legislation to get those changes that you'd like to see?

RON WYDEN: Well, we've certainly begun to make some headway on our concern about health benefits. As you know, we wrote several letters this week. I think it's clear that we were right. Our bipartisan letter reflected what Congress intended, that those health benefits be-- be protected. We may have to have legislation on the deductibility issue.

But look, I come from a state where after you've counted intel and a handful of other businesses, the businesses are overwhelmingly small ones. That's why I feel so strongly that looking back over the events of the last few weeks, I do think that the Congress has missed the smallest of the small businesses. So if I had to give you two priorities for the next package on the economy, one would be making sure that we get a market-oriented trigger for unemployment insurance after July 31, that we protect those folks who really got left behind.

The unemployment system was created in the 1930s. Nobody had ever heard of a gig worker. So we said in our package, we were going to protect them and the self-employed and independent contractors. I want to make sure in the next package there's a trigger tied to market conditions, protection for those people who nobody really paid much attention to in employment policy over the last decade and a half. And then I want to get that cash to the small businesses.

JULIE HYMAN: Senator, it's Julie again. Something else that has gotten a lot of coverage, there have been a lot of reports about people who even when their businesses reopen don't necessarily want to go back to work, either because they are making more by getting unemployment or because they don't feel their work place is safe. Do you think coming out of this that there will be a renewed viable push for federally mandated higher minimum wage because this has exposed, perhaps, people are not getting paid as much as they should be?

RON WYDEN: What we said we wanted, and this will again be the focus of our work going forward, is that we want full wage replacement. And the reality is, in an economy driven by consumers, that really, you know, is almost demand replacement. So yes, I think that when you look at the minimum wage in some of these states, people aren't going to be able to pay for groceries, and rent, and-- and their medical bills. So yes, I think it will increase the push for increasing the minimum wage. I strongly support that.

JESSICA SMITH: Senator, switching gears a bit to look forward to the election, I know you've been pushing for vote by mail, really since the beginning of this pandemic. Has there been any progress on that? I know it's faced pushback from the White House. And if that isn't going to happen, if Republicans aren't necessarily going to get on board and vote by mail, what else can be done to make sure people can get to the polls safely?

RON WYDEN: Senator Klobuchar and I have organized the Senate Democrats with our leadership because what we want to do is COVID-proof these upcoming elections. All you have to look at is that spectacle in Wisconsin. And we get these reports now of a rising number of folks who got infected who were voting at that time, involved in that election.

And this is now a public safety issue. And I think there is something very significant that has happened recently. I've been introducing vote by mail legislation since 2002. I was the country's first senator elected by mail. It was kind of an academic debate back then.

Now, it is a public safety issue. Most of the poll workers in America are over the age of 60. We're going to have older voters. That is, if you're in the middle of a pandemic still, that is a prescription for a real health care calamity. So I do think that this is different now. And the real measure of it is the number of Republican officials at the local level, we're talking of Governor Larry Hogan, Governor Mike DeWine, Secretary of State Kim Wyman in my part of the country, Republican-elected officials at the state and local level are now breaking with Mitch McConnell, and they believe that the safety of their voters is more important than Mitch McConnell protecting his turf.

ADAM SHAPIRO: Senator Ron Wyden, thank you so much for joining us. These are historic and also troubling times. But on a lighter note, you made a bit of history. I think you're the first person to use Yiddish, the "chutzpah caucus," I think it was. I love it. More of the best to you Senator.

RON WYDEN: Let's do it again. Thanks.