President Trump administration officials have begun signaling their willingness to approve a narrow extension of the enhanced unemployment benefits helping tens of millions of jobless Americans hurt by the corona-virus pandemic.
In less than two weeks, the federal program that provides a $600-per-week increase to unemployment benefits will expire. Many economists warn the disappearance of this enormous federal stimulus, created in March, could hinder the economic recovery and deprive millions of Americans of a vital financial lifeline.
Around 30 million people are collecting what many recipients say is a crucial pillar of financial support right now.
“We’d basically have to choose between paying bills and eating,” Joerge Gary, 39, who was furloughed from her job as a dining manager at a college campus near Summerville, S.C., at the end of April, said about the looming expiration of the benefits. “I honestly don’t know what I would do.”
For months, President Trump and White House officials have argued the $600-per-week unemployment bonus provides a disincentive to work and should be scrapped so that more Americans return to work as part of the economic recovery. But with the benefits soon set to expire and the economy showing new signs of strain, Trump administration officials have begun opening the door to accepting a narrower version of what Congress previously approved.
Statement By Officials
Treasury Secretary Steven Mnuchin said on CNBC last week that the administration’s priority was ensuring that future benefits amount to “no more” than 100 percent of a worker’s prior wages. Mnuchin’s comments surprised some congressional Republicans who thought he shared their strong opposition to extending the benefits, according to two people who spoke on the condition of anonymity to describe internal dynamics.
Larry Kudlow, the president’s top economic adviser, told Fox Business on Monday that the administration is seeking “some unemployment reforms.” Kudlow had in previous weeks more aggressively bashed the $600-per-week increase.
Kudlow also pushed a “return to work” bonus that could supplement a reduction in unemployment benefits. That idea has been viewed as administratively difficult to implement and its path to passage is unclear, according to three lobbyists and congressional aides aware of internal conversations.
One potential compromise discussed by Republican lawmakers would involve cutting the unemployment benefit from $600 per week to between $200 and $400 per week and making up at least part of the difference by sending another round of $1,200 stimulus payments, these people said.
White House spokesman Judd Deere said in a statement that the administration is opposed to the $600-per-week increase but would not rule out the administration agreeing to a more limited expansion of the benefit. Maintaining unemployment insurance benefits at current levels “does not incentivize returning to work,” Deere said in an email. “UI reform is a priority for this White House in any phase four package and we are in ongoing discussions with the Hill.”
The emergency, temporary federal benefits come on top of the payments appropriated by state governments, though those benefits vary. Democrats have largely called for the benefits to be extended.
Lawmakers will have little time to resolve the competing positions. Republicans have discussed the issue internally but have not reached a caucus position on the matter. There are no serious bipartisan discussions underway to resolve the impasse. The Senate comes back in session on July 20, five days before the enhanced unemployment benefit expires in 49 states. They expire in New York state on July 26.
“They don’t have time, which is what is very scary about all this,” said Bill Hoagland, senior vice president at the Bipartisan Policy Center and former Republican staff director for the Senate Budget Committee. “It’s very irresponsible.”
Trump has offered little clarity on his preferred outcome, saying on Fox Business last month about the benefits: “We had something where they wanted where it gave you a disincentive to work last time. And it was still money going to people and helping people, so I was all for that. But we want to create a very great incentive to work. So we’re working on that, and I’m sure we’ll all come together.”
People wait to speak with representatives from the Oklahoma Employment Security Commission about unemployment claims Thursday in Midwest City, Okla. (Sue Ogrocki/AP) Compounding the potential for economic disaster is that the labor market shows continued signs of severe stress.