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, Kentucky.
Part of the hangup stems from a push by administration officials and Republican 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 contentious. They are hoping to release a proposal early next week.
“We realize there are a lot of hardworking Americans [who], because of COVID[-19], still won’t have jobs,” Treasury Secretary Steven Mnuchin told reporters Thursday.
After convulsing in March and April, when the response to 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 rise across the United States.
This has put enormous pressure on state unemployment programs, which typically pay out about 45% 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 COVID-19 hit the country.
That federal benefit is to expire at the end of this month. And it comes at a time when a federal eviction moratorium also is ending, a dynamic that could put enormous pressure on cash-strapped families.
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 of the existing state bonus, according to three senior GOP officials, who spoke on the condition of anonymity.
Mnuchin and President Donald Trump have said publicly that they want to have the new payments replace roughly “70%” of a worker’s prior income. This would represent a combination of the nearly 50% state contribution of a worker’s prior income plus an additional 25% 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% of wage replacement,” Mnuchin said Thursday about the GOP’s proposed plan.
Other leading Republican lawmakers have argued for cutting the $600-per-week bonus down to $200-per-week, these people said.