McClatchy DC: Unemployed Workers' Extra $600 Benefit Is About to Expire -- But Democrats Have New Plans
Millions of unemployed California residents are facing a sudden $600 drop in their jobless benefits at the end of the month, but Democratic plans would keep the money coming in as long as the economy remains in turmoil.
The proposals, which so far have received virtually no Republican support, would tie the benefits to the state of the economy.
The $600 a week, which is added to the state’s regular benefit, is a federal program created in March to provide a lifeline to jobless people as the coronavirus pandemic sent the economy into a tailspin.
A total of approximately average of 4.29 million state residents per week have been receiving the $600 payments with their regular unemployment insurance or Pandemic Unemployment Assistance benefits over the last four week period ending July 11.
Congress returned to work Monday after a July recess, and lawmakers and the White House are scrambling to come up with a broad economic relief package that is likely to include some sort of relief for unemployed workers.
Moderate Democrats are prepared to unveil a plan later this week that would maintain the $600 payment as long as the presidential emergency is in effect. President Donald Trump declared an emergency because of the coronavirus pandemic on March 13.
Once the emergency ends, the payments would drop to $450 for 13 weeks. Following that, it would drop to $200 or $300, depending on the unemployment rate in a state.
The plan has the backing of moderate House Democrats. To simply end the payment, as is now scheduled, “creates uncertainty in what’s already an uncertain time,” said Rep. Derek Kilmer, a Washington Democrat who chairs the centrist New Democrat Coalition. Kilmer is a co-author, along with Rep. Don Beyer, D-Virginia., of the plan.
“The uncertainty itself is a drag on the economy,” said Rep. Scott Peters, D-San Diego.
Senate Democrats have a somewhat different approach. Democratic Leader Chuck Schumer of New York and Sen. Ron Wyden of Oregon, top Democrat on the Senate Finance Committee, would tie benefits directly to a state’s unemployment rate.
If the rate stayed over 11% for three months, the $600 weekly payment would continue. California would easily qualify, since its April rates were both 16.4% and its June rate was 14.9%.
Once the average dropped, so would the payment. For every percentage point decrease, the payment would be reduced by $100 a week.
So if California’s average was 9.5% for three months, the payment would be $400 a week. If it went below 6%, the payment would stop.
Resistance to all this is likely in the Republican-run Senate, where many GOP lawmakers have long been opposed to the special unemployment payment. They argue it often means people can make more money not working, and studies have found that’s often the case.
“We’re hearing it all over the country that it’s made it harder actually to get people back to work,” Senate Majority Leader Mitch McConnell, R-Kentucky, told reporters earlier this month.
Monday, he would not say what could be in the economic relief package, other than some sort of liability protection for businesses and others who deal with the public during the pandemic.
“As to what will be in or out of it, as I’ve said repeatedly for myself, and I believe for my members and I believe for the president, liability reform, liability protection is a red line. And we also are going to have a total amount (of money in the entire package) in mind that we think makes sense given the conditions we confront today,” he told reporters.
A University of Chicago study in May found that nationally, construction workers and retail, sales and food service workers, as well as medical assistants and janitors often were getting more in jobless payments than they earned while working.
Unemployment insurance traditionally tries to provide enough income for jobless workers so they can continue to live comfortably but still have an incentive to find a job.
Kilmer, along with other Democrats, maintains that these times are much different. Because of the coronavirus, “you certainly don’t want unemployed workers out pounding the pavement,” he said, since even leaving one’s home could pose a health risk.
Nor does he want the sort of situation unemployment workers faced during and after the Great Recession of 2007-09, when Congress extended the number of available weeks of benefits 13 times.
And, said a study this month from the California Policy Lab, the $600 benefit “has played a substantial role in preventing near-poverty income levels among unemployment insurance claimants” in the state. It estimated that without the benefit, 1.75 million people in the state receiving benefits would have fallen below the federal poverty level.
By: David Lightman
Source: McClatchy DC
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