Some states target jobless benefits
GOP governors halting U.S. funds in hopes of spurring hiring
WASHINGTON — An unexpected slowdown in hiring nationwide has prompted some Republican governors to start slashing jobless benefits in their states, hoping that the loss of generous federal aid will force more people to try to return to work.
The new GOP cuts chiefly target the extra $300 in weekly payments that millions of Americans have received for months in addition to their usual unemployment checks.
Arkansas on Friday became the latest to announce plans to cancel the extra benefits, joining Montana and South Carolina earlier in the week, in a move that signals a new effort on the part of Republicans to try to combat what they see as a national worker shortage.
Republican policymakers have long opposed these heightened unemployment payments and unanimously voted against extending them this year. But party leaders nationwide have grown more emboldened in recent days, particularly as the U.S. government Friday released data showing the economy added only 266,000 jobs in April.
“More states are expected to follow,” Rep. Kevin Brady, R-Texas, the top Republican on the tax-focused House Ways and Means Committee, said in a statement Friday, adding that the White House is “in denial” about the economic effects of its policies.
Business groups including the U.S. Chamber of Commerce, meanwhile, last week called on the federal government to cancel the program nationally before its planned expiration in early September. Such a repeal is unlikely given Democrats’ majorities in Congress.
Many Democratic lawmakers stress that the payments remain necessary because families are hurting and parents cannot afford to return to work in the absence of accessible, affordable child care. In some states, Republicans also have ended their participation in pandemic relief programs that benefit those who drive for Uber, deliver for Grubhub or otherwise participate in the so-called gig economy, further troubling congressional advocates for heightened unemployment aid.
“A deeply disturbing trend is emerging with Republican governors cutting off enhanced jobless benefits months early, and Republican interest groups pushing the move,” said Sen. Ron Wyden, D-Ore., chairman of the Finance Committee. “Cutting off all benefits while millions of workers have not yet been able to return to work could cause tremendous financial pain and sabotage our economic recovery.”
The political dispute over unemployment reflects the broader concern — and growing confusion — about the health of the U.S. economy as businesses reopen, states lift restrictions and doctors continue their push to vaccinate as many Americans as possible against the coronavirus.
The Biden administration attributes some of the gains and a steady drop in the number of newly unemployed Americans to the $1.9 trillion stimulus law that was passed in March.
But Republicans counter that the consequences of that spending are starting to show, threatening to raise prices for consumers and overheat the economy before it has fully recovered. In a sign of the fight to come, Senate Minority Leader Mitch McConnell, R-Ky., on Thursday said the president’s agenda already had caused inflation and spawned a national worker shortage, which he said is “directly related to this recent bill that just passed.”
The White House has said it does not believe the federal benefits have created a significant crunch in the labor market. Asked if enhanced unemployment benefits had any affect on Americans’ desire to work, President Joe Biden on Friday rejected the notion. “No, nothing measurable,” he told reporters.
Some Republican leaders outside Washington still have sought to blunt the perceived impact of Biden’s agenda — beginning with the enhanced unemployment payments. The stimulus bill, known as the American Rescue Plan, provides $300 per week in extra, federally funded unemployment benefits until early September.
Hours after the Biden administration reported lower-than-expected employment numbers, Arkansas Gov. Asa Hutchinson announced the state would cease providing the extra payments in June. In a letter to Arkansas’ labor agency, Hutchinson attributed the decision to the fact that the state’s economy is “rebounding so quickly.”
Rebecca Dixon, executive director of the National Employment Law Project, said the states now risk rolling back the much-needed federal aid too prematurely, putting families that do earnestly aspire to work at renewed financial risk.