More than 25 million laid-off workers received their final $600 weekly supplemental payments from the federal government last weekend and Senate Republicans are in disarray over whether to replace the benefits or just drop them.
Sens. Ron Johnson (R-Wis.) and Mike Braun (R-Ind.) put forward a proposal Thursday to supplement state benefits with $200 per week, after negotiations with Democrats stalled and their fellow Republicans failed to coalesce around a broader coronavirus relief package offered by Senate Majority Leader Mitch McConnell (R-Ky.).
“From my standpoint, it’s a pretty generous proposal,” Johnson told reporters on Thursday. “I don’t know why they should object to it if they’re really concerned about Americans who are unemployed.”
Johnson’s proposal is actually even less generous than what McConnell has offered. It would give states the option to extend federal unemployment benefits at $200 per week or 66% of previous wages. McConnell’s bill would cap benefits at 70% of what workers earned from their previous jobs. (Most state workforce agencies would be unable to implement either wage-replacement proposal anytime soon.)
Senate Minority Leader Chuck Schumer (D-N.Y.) objected to Johnson’s request, calling the proposal “stingy” and “shocking.” He accused Republicans of advancing it in order to create “some political cover” for their party because, he said, “they can’t get their act together” on extending unemployment benefits.
McConnell hasn’t signaled any support for Johnson’s proposal.
Back in May, the House of Representatives approved legislation reauthorizing the extra $600 for the rest of the year. Senate Democrats tried to pass that bill on Thursday, but Johnson objected. (Senate rules allow any senator to block legislation.)
Economists generally say that dropping the extra benefits will reduce economic growth this year. State benefits vary, and replacing the $600 with $200 would represent an average cut of 43% for those currently receiving the unemployment payments.
The federal government usually doesn’t add any money to state unemployment benefits, which typically pay less than $400 per week to encourage workers to find new jobs. But in March, Congress added $600 per week to state benefits as the coronavirus pandemic shuttered businesses and public health officials urged everyone to stay home.
That additional $600 was designed to help people survive without desperately seeking work. For many workers, the combined state-federal benefits amounted to more than their previous wages ― prompting Johnson and other Republicans to say that the more generous payments would destroy economic growth as the virus subsided.
The problem is, the virus hasn’t subsided as planned, with infections surging in most states and the death toll topping 150,000. But Johnson, a businessman who wrote in a March op-ed that “death is an unavoidable part of life,” thinks it’s more important for people to go back to work, regardless of the pandemic.
“We’re creating a very perverse incentive for people to remain unemployed when our economy is calling for more workers,” he said on the Senate floor Thursday.
Senate Republicans struggled to unify around a single stimulus proposal even before strained negotiations with top congressional Democrats kicked off earlier this week. Twenty Republican senators oppose spending any new money on relief because of the impact on the deficit, McConnell told Fox News on Wednesday.
Meanwhile, the enhanced unemployment benefits for millions of people expire on Friday, jobless claims are on the rise again, the economy contracted at the fastest quarterly rate in history between April and June, and the coronavirus continues to surge across the country.
“It’s a statement of the obvious that I have members who are all over the lot on this,” McConnell told reporters earlier this week when asked about talks over another stimulus package. “There are some members who think we’ve already done enough, other members who think we need to do more. This is a complicated problem.”
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