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Tags: democrats | jobless aid | coronavirus | stimulus

Democrats Agree on Smaller, Longer Jobless Aid

chuck schumer raises fists behind podium
Senate Majority Leader Chuck Schumer (D-N.Y.) speaking at his weekly press conference. (Michael Brochstein/Sipa USA via AP Images)

Friday, 05 March 2021 01:44 PM EST

Senate Democrats have resolved differences over the level and duration of supplemental jobless benefits to be included in the pandemic-relief bill. Majority Leader Chuck Schumer pledged that the Senate will “power through” the arduous final process of getting President Joe Biden’s first signature piece of legislation passed.

Senate Democrats agreed on $300-a-week in supplemental jobless benefits, less than the $400 approved by the House, according to a Democrat aide. The bonus will last longer, however, until Oct. 4 rather than the end of August, and much of the help won’t be taxable, the aide said.

Recipients will get tax forgiveness on $10,200 worth of benefits under the deal, according to the aide. Senator Tom Carper of Delaware, a close Biden ally, led the talks and will offer the amendment to make the change.

For millions of unemployed Americans who were able to receive enhanced federal jobless benefits, the change would eliminate their obligation to pay Internal Revenue Service levies on the first $10,200 of those payments.

That tax forbearance will offer major help. Unemployment benefits, unlike stimulus payments, are subject to federal income taxes. Many states don’t withhold taxes when they make the payments, so recipients will be required to pay those levies when they file their tax return this spring. That means that the millions of workers who received unemployment benefits could face large, unanticipated tax bills.

The deal would also expand a tax provision from the GOP 2017 tax law that restricts how businesses losses can be carried forward to offset future-year profits through 2026. The provision was initially implemented through 2025.

In past economic crises, Congress has approved tax relief to help unemployed individuals. In 2009, lawmakers waived taxes on up to $2,400 in jobless benefits. 

White House Sees Bill Speeding Job Recovery by a Year 

Biden’s $1.9 trillion economic rescue plan will accelerate the U.S.’s return to full employment by a year, National Economic Council Director Brian Deese said.

“Most people say that this bill would pull forward by about a year the length of time it would take to get back to full,” Deese said in an interview with Bloomberg News on Friday. He declined to make more specific predictions about unemployment.

A government report earlier Friday showed that total U.S. payrolls in February remained more than 9 million lower than the peak prior to the pandemic.

Deese added that the administration is working to speed up the delivery of stimulus checks that are a key feature of the aid bill that Congress is expected to pass in coming days.

White House economist Heather Boushey, also speaking in an interview, underscored that economic recovery will depend heavily on the distribution of coronavirus vaccines.

“Just to state the obvious, this all depends on getting shots in arms,” she said. 

The Senate began debate on the bill Friday, ahead of the amendment-proposal stage known as the vote-a-rama. Republicans are planning a number of measures almost certain to fail but serving as a messaging device for their opposition to much of the package. Democrat leaders want final passage by March 14, when current supplemental jobless benefits expire.

The first amendment to get a vote will be offered by progressive Budget Chairman Bernie Sanders, who has said he will attempt to amend the bill to raise the minimum wage to $15 per hour by 2025. That amendment is subject to an objection, since the parliamentarian has ruled it against budget rules, and 60 senators would have to vote to add it to the bill. Some moderate Democrats are expected to vote against the amendment, arguing that it would sink the bill by allowing the entire package to be filibustered by Republicans.

While many of the Republican amendment votes are expected to be designed to cause political damage to Democrats and have no chance of succeeding, others may go through.

“They are dead-set on ramming through a partisan spending spree packed with non-COVID related policies” said Senate Minority leader Mitch McConnell on Friday on the Senate floor. “This isn’t a pandemic-rescue package, this is a parade of left-wing pet projects.”

McConnell said the economy is “already on track to bounce back from this crisis,” because of last year’s bipartisan virus-relief packages, not because of the $1.9 trillion bill before the Senate this week.

“Republicans have many ideas to improve the bill, many ideas, and we are about to vote on all kinds of amendments in the hope that some of these ideas make it into the final product,” McConnell said.

For amendments that are in order under budget rules — such as one to cut supplemental unemployment benefits from the $400 per week in the bill — it would only take one Democrat to side with 50 Republicans to make the change.

“We are going to power through and finish this bill however long it takes,” Majority Leader Chuck Schumer said on the Senate floor Friday. “We are not going to make the same mistake we did after the last economic downturn, when Congress did too little.” 

© Copyright 2024 Bloomberg News. All rights reserved.

Senate Democrats have resolved differences over the level and duration of supplemental jobless benefits to be included in the pandemic-relief bill. Majority Leader Chuck Schumer pledged that the Senate will "power through...
democrats, jobless aid, coronavirus, stimulus
Friday, 05 March 2021 01:44 PM
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