Battle lines are being drawn over prolonging the $600 pandemic payment boost to unemployment benefits.
President Trump, on Tuesday, reportedly said he opposes extending the benefit, while the House Democrats have already approved legislation guaranteeing benefits into next year.
Democrats say the benefits are needed to keep laid-off workers afloat to prevent the pandemic from turning into a lasting economic catastrophe. Republicans, though, say the benefits lead the jobless to forgo returning to work, an incentive that will prevent labor market recovery.
The payment was originally enacted in March as part of the CARES Act, and it is currently scheduled to expire on July 31. The House-passed HEROES Act, approved last week, extends the aid to Jan. 31, 2021, for most unemployed workers.
House Majority Leader Steny Hoyer, a Maryland Democrat, on Wednesday called on Trump to work with both chambers of Congress to help the unemployed financially survive the pandemic, in part by the Senate approving the HEROES Act.
“At a time when our nation faces an ongoing pandemic and record job losses, the president should work with us to ensure working families can weather this crisis and smooth the transition into the economic recovery,” he said in a statement to the Washington Examiner.
Meanwhile, the HEROES Act is dead on arrival in the Senate as Majority Leader Mitch McConnell, a Republican from Kentucky, deemed it “aspirational legislation.”
The upper chamber is currently on pause when it comes to passing another coronavirus relief package.
Several Senate Republicans, though, strongly oppose the $600 boost on the grounds that it makes work a losing short-term financial proposition for some workers.
“You can extend some assistance, but you don’t want to pay people more unemployed than they’d make working. You should never make more than your actual wages,” Sen. Lindsey Graham, a South Carolina Republican, told Trump during Tuesday’s meeting, according to the Washington Post.
On average, unemployment benefits across the country were $385 per week in February 2020, according to the House Ways and Means Committee. When combined with the added benefit, jobless workers receive nearly $1,000 a week. The median salary for a grocery store cashier is roughly $600 a week, according to Salary.com.
Doug Rike, a 25-year-old cook who worked at the Upland Brewing Co. in Bloomington, Indiana, recently told the Washington Examiner that he receives more money collecting unemployment benefits than he earned at his job. He also said that he would begin looking for work after the $600 payment expires.
Meanwhile, the stakes for workers are the highest they’ve been in generations. The unemployment rate is projected to average 15% between the second and third quarters of 2020, according to the Congressional Budget Office, when the benefit is slated to expire. The Labor Department has never recorded such a high figure since it began tracking jobs in 1948.
Since the economy halted in mid-March to slow the spread of the coronavirus, over 36 million workers have filed for unemployment benefits, an unprecedented figure since the federal government began tracking unemployment in the 1930s.
Government spending on unemployment benefits increased $45 billion between February and April and made up for roughly half of lost wages and salaries in April, according to a Brookings Institution report released last week.
“One of the most economically important pieces of that policy support has been the rapid expansion of unemployment insurance,” the report stated, referring to the $600 payment and the 13-week extension of unemployment benefits that Washington recently approved.
There has been some resistance among Senate Republicans on extending the $600 payment since it was enacted.
Shortly after the bill passed Congress, Graham said that the $600 payment would be extended beyond its July 31 deadline “over our dead bodies.”
Republican Sen. Mitt Romney from Utah told the Washington Post on May 1 that it was “not fair” that essential workers can earn less than those receiving unemployment benefits.
He has proposed “Patriot Pay,” which would provide essential workers earning less than $50,000 a temporary bonus of up to $12 per hour for May, June, and July, which are the remaining months of the $600 payment if unemployment benefits are not extended.
Some Senate Democrats oppose getting rid of the payment and would rather phase it out.
Sen. Ron Wyden, a Democrat from Oregon who is the ranking member on the chamber’s Finance Committee, has proposed scaling back the $600 payment after its July 31 expiration by tying it to improvement in the economy. Under his plan, every time a state’s three-month unemployment rate average falls 1%, the payment is reduced by $100 and eliminated after the jobless rate falls below 6%.
