Senate Majority Leader Mitch McConnell has backtracked on his previous suggestion that states in financial trouble should simply go bankrupt and now says he is “open” to considering funding for state and local governments in the next coronavirus relief bill.
That’s potentially good news for governments nationwide that are looking at huge budget deficits brought on by the COVID-19 pandemic and the shutdown of businesses. The sharp and sudden decline in tax revenue has state and local leaders frantically trying to adjust budget projections for this year and beyond. Congress should provide such funding quickly.
The change of course by McConnell, however, is not without stipulations. In exchange for funding for the state government, he wants federal liability protection for businesses that reopen to guard against what he termed an “avalanche” of lawsuits. The liability protection could be a major sticking point in a funding bill, but there is ample room for compromise.
McConnell and other top Republicans, along with Trump administration officials, are backing so-called safe harbor provisions supported by the U.S. Chamber of Commerce, the pro-business lobbying group. They want legal protection for all businesses against COVID-19-related lawsuits.
Opposing the move are Democratic leaders, labor unions and trial attorneys who fear that overly broad levels of protection from liability would allow business to escape accountability.
While most would agree that businesses, especially small local ones, should be protected from frivolous lawsuits related to the coronavirus pandemic, there are equal concerns about worker safety and whether companies are doing enough to protect their employees.
There is precedent for federal legislation providing liability protection. Recently, Congress agreed to limit the legal liability of manufacturers and distributors of face masks to speed production.
A complete safe harbor provision for businesses has little chance of making it through the Democratic-controlled House, but there are ways to limit liability without eliminating safeguards and lawsuits. A broad outline of safety measures that must be met before reopening, coupled with provisions for worker safety, could allow for some limited liability protections for businesses. Other possibilities are an inspection process and certification for businesses or limits on areas of potential litigation to reduce frivolous lawsuits that would be costly for small businesses to defend.
The bottom line is that compromise will be necessary to protect not only businesses but also the workers who are needed to keep them running. If some form of business liability protection needs to be passed in order to get emergency funding for state and local governments, then congressional leaders should quickly find a middle ground.
This editorial first appeared in the Pittsburgh Post-Gazette on Tuesday. This commentary should be considered another point of view and not necessarily the opinion or editorial policy of The Dominion Post.
