GOP Plan Calls for Unemployment Replacement at 70% of Wages

With additional federal unemployment benefits awarded to Americans out of work because of the coronavirus pandemic set to expire at the end of the month, Republicans have proposed extending the boosted unemployment insurance “based on approximately 70% wage replacement,” CNBC reports.

Treasury Secretary Steven Mnuchin discussed the GOP relief plan with CNBC hours after Senate Republicans and the Trump administration said they reached a possible deal on legislation they say will serve as a starting point in negotiations with Democrats.

It is unclear how Republicans plan to structure the 70% wage replacement.

Back in March, under the CARES Act, lawmakers chose $600 per week as the boosted unemployment benefit as a way to update outdated unemployment systems that states use. Many state unemployment programs don’t pay for 100% of a worker’s previous earnings.

As of Wednesday afternoon, the GOP was considering cutting the extra benefit from about $600 to $100 a week through the rest of the year, sources told CNBC. But no solid agreement was made on the new number.

House Majority Leader Steny Hoyer, D-Md., told CNBC he disagrees with the 70% wage replacement option.

He said it is not “the policy we ought to pursue.” He said that “if we’re going to ratchet that down, it ought to be over time.” But he added that “it’s not a dealbreaker.”

Senate leaders say they are aiming to release their aid package as soon as Thursday.

Mnuchin said other aspects of the package include $105 billion to help schools reopen, a targeted additional round of the Paycheck Protection Program, with “second checks” for certain companies whose revenues are down more than 50%, $16 billion in new funding for coronavirus testing, tax credits to encourage companies to hire workers and more flexibility for state and local governments in how they spend federal relief, but no new aid.

Mnuchin said a payroll tax cut, which President Donald Trump has pushed for, is not included in the base bill, but a direct payment to Americans will be. He did not specify the amount of money or who will be eligible for the stimulus check.

House Democrats propose a $3 trillion relief package. Republican Senators want a package to cost around $1 trillion. 

Mnuchin noted that the administration would consider another relief package if this one doesn’t go far enough.

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