As legislators grapple with the shape and scop of another coronavirus stimulus package, one issue continues to bubble up as critical and deeply contentious: whether to extend the additional unemployment money that jobless Americans have been receiving for months.
And that debate is intensifying, with the benefit due to expire at the end of this month.
As The Hill reports, Democrats have claimed the extra $600 weekly boost for millions of unemployed Americans has been a financial lifeline for people who lost their jobs because of the coronavirus outbreak.
But Republicans -- including President Donald Trump himself -- say the extra payment could be keeping people from returning to work at the very time that the national pandemic recovery needs them to do just that.
Lawmakers awarded jobless Americans an extra weekly payment as part of the CARES Act stimulus package. The benefit is set to expire at the end of the month. Unemployment rates in June totaled 11.1%.
“It would be unconscionable for Republicans to allow supercharged unemployment benefits to expire with the unemployment rate above 11% and 2.3 million new unemployment claims just this week,” Senate Finance Committee Ranking Member Ron Wyden, D-Ore., said Thursday.
But some Republicans think the extra money is keeping people from returning to jobs because they are earning more money by staying at home.
House Democrats proposed extending the payment for six more months under its HEROES Act.
GOP senators, on contrast, say they want to evaluate the state of the economy before extending the benefit.
“Despite mounting evidence of the problems these extra payments are causing, the House passed a bill recently to extend them — not just for a month or two, but for another six months, through January 2021,” Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said during a hearing on unemployment last month.
The Congressional Budget Office estimated that if the policy is extended for six months, the overall economy will benefit through the end of the year because unemployed people will use the money to buy food, pay rent and spend at elevated levels. But it also said the employment situation would be worse, with many potentially not taking jobs that would cost them their enhanced benefit and thus lower their total income.
By 2021, CBO estimates, both the economy and unemployment would be worse. On Thursday, the CBO projected that unemployment would remain above 10% by the end of the year and wouldn’t fall back below 5% until 2025.
“Although the unemployment rate is still high, the significant turnaround shows that Congress should focus on fostering the recovery that’s already underway and resist the temptation to rush toward another massive stimulus package,” Rachel Greszler, of the Heritage Foundation, told the Hill.
The conservative-leaning think tank is calling for a strategy of wage replacement instead of the $600 payment.
Earlier this week, in detailing hjs support for further stimulus, Trump also spoke against the jobless benefit.
Among the alternatives is a "back-to-work bonus" for those who re-enter the workforce against a global coronavirus pandemic layoff or furlough.
"You would make more money if you don't go to work," Trump said of the $600 payment. "That's not what the country's all about. People didn't want that. They wanted to go to work, but it didn't make sense because they make more money if they didn't. And we had some of that, so we don't want to have that. We want to have people get out and we want to create a tremendous incentive for people to want to go back to work."
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