Republicans struggle to agree on a plan to keep but cut unemployment bonus.
With days to go before enhanced jobless benefits expire, the White House and Senate Republicans are struggling to design a way to scale back the program without overwhelming state unemployment agencies and imperiling aid to more than 20 million.
The hangup has led to the delay in the introduction of the GOP’s $1 trillion stimulus package.
The White House and Senate Republicans are racing to find a solution, hoping to unveil their joint plan early next week, just a few days before the $600 weekly federal payment runs out.
“We realize there are a lot of hard-working Americans because of COVID (who) still won’t have jobs,” Treasury Secretary Steven Mnuchin said Thursday.
Typically, state unemployment pays about 45 percent of a worker’s prior wages.
In March, Congress approved a $600-per-week emergency bonus for every unemployed worker on top of that traditional payment, funneling hundreds of billions of dollars to newly jobless Americans as the pandemic hit.
That federal benefit, currently being received by more than 20 million people, is set to expire at the end of this month. And it comes at a time when a federal eviction moratorium also ends, which could put enormous pressure on cash-strapped families.
In practice, the jobless benefit lapse means that millions of workers are seeing their last enhanced benefit payment this week.
In recent days, congressional Republicans and Mnuchin have discussed replacing this federal bonus with one tied to workers’ income before their jobs were lost.
Mnuchin and President Donald Trump have said publicly that they want to have the new payments replace roughly “70 percent” of a worker’s prior income.
This would represent a combination of the nearly 50 percent state contribution of a worker’s prior income plus an additional 25 percent kicked in by the federal government.
Other leading Republican lawmakers have argued for cutting the $600-per-week bonus down to $200, three GOP officials said, with one possibility being that this amount slowly phases out over time.
The officials have insisted that targeted wage replacement could prove too difficult for the states to implement.
The issue has helped delay the introduction of the $1 trillion stimulus package Senate Majority Leader Mitch McConnell, R-Ky., had planned to release Thursday.
The legislation now is expected to be released Monday, a delay that has prompted scorching criticism from congressional Democrats, who’ve been demanding action for months.
“This weekend, millions of Americans will lose their unemployment insurance, will be at risk of being evicted from their homes, and could be laid off by state and local government, and there is only one reason: Republicans have been dithering for months while America’s crisis deepens,” House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Charles E. Schumer, D-N.Y., said in a joint statement Friday.
If adopted, the new unemployment plan could complicate negotiations with congressional Democrats, who favor extending the $600 weekly payment through January. And it’s unclear if balky state processing systems would have the bandwidth to implement a complicated new formula on such short notice.
“We’re dealing with the mechanical issues associated with that,” Mnuchin said.
Senate Republicans and White House officials have acknowledged some additional federal help still should be provided to those made jobless during the pandemic.
The benefits are politically popular, with a recent Washington Post-ABC News poll finding close to 60 percent of Americans supporting their extension.
“We need to make sure unemployment insurance is continued,” McConnell said Friday. “There is a controversy, however, over whether the provision in the previous measure that allowed people to make more money staying at home than going back to work was a good idea. That’s not going to be our recommendation. But I do think basic unemployment insurance — fundamentally handled by the states but backed up by us — will be a part of ” the GOP package.