McConnell: New coronavirus relief bill could take ‘weeks’
Many losing their unemployment benefits would be left in limbo
WASHINGTON — 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 Americans.
The hangup has led to an abrupt delay in the introduction of the GOP’s $1 trillion stimulus package. The White House and Democrats have said they want a deal by the end of the month, but Senate Majority Leader Mitch McConnell, R-Ky., suggested Friday it could take several weeks to reach an agreement, a timeline that could leave many unemployed Americans severely exposed.
“Hopefully we can come together behind some package we can agree on in the next few weeks,” McConnell said at an event in Ashland, Ky.
Part of the hangup stems from a push by administration officials and GOP lawmakers to cut — but not completely eliminate — a $600 weekly payment of enhanced federal unemployment benefits. The White House and GOP are not in agreement about how to do this and talks remain highly contentious. They are hoping to release a proposal early next week.
“We realize there are a lot of hard-working Americans because of COVID [who] still won’t have jobs,” Treasury Secretary Steven Mnuchin told reporters Thursday.
After convulsing in March and April when the pandemic shut down large parts of the United States, the economy showed signs of regaining its footing before sliding again in recent weeks.
Numerous stimulus programs appear to be wearing off, and the pace of layoffs has picked up again. Layoffs that many Americans thought would be temporary have dragged on and become permanent, particularly as new cases of the virus spike across the United States.
This has put enormous pressure on state unemployment programs, which typically pay out about 45 percent of a worker’s prior wages. In March, Congress approved the $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 novel coronavirus pandemic hit the country.
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 is also ending, a dynamic that 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, senior congressional Republicans and Mnuchin have discussed replacing this universal federal bonus with one tied to workers’ income before their job was lost. Instead of sending a $600-per-week bonus to every unemployed person, under this plan the federal government would provide a bonus amounting to about half the existing bonus, according to three senior GOP officials who spoke on the condition of anonymity to describe fast-moving and internal deliberations.
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. Republican lawmakers have discussed extending the flat payment at about $200 per week instead of $600 to give the states time to adjust to the new formula and system.
“We are going to extend it on the basis of wage replacement — it’s approximately at 70 percent of wage replacement,” Mnuchin told reporters Thursday about the GOP’s proposed plan.
Other leading Republican lawmakers have argued for cutting the $600-perweek bonus down to $200-per-week, these people said, with one possibility being that this amount slowly phases out over time. These GOP officials have insisted that targeted wage replacement could prove too difficult for the states to implement.
One Senate Republican aide close to the negotiations, who spoke on the condition of anonymity to discuss internal matters, said that a $200 flat payment represented the party’s “default” position, with additional funding included to help states upgrade their unemployment systems. The aide downplayed the odds of the GOP approving the more complicated replacement instead of the $200-per-week extension.