House and Senate Republicans are growing increasingly critical of a decision to increase unemployment benefits by $600 per month to help blunt the economic damage caused by the coronavirus outbreak.
Republicans planning a new round of economic aid appear poised to block an extension of those additional benefits, despite a push from Democrats to provide the extra money, which now expires in August, until next year.
Senate Majority Leader Mitch McConnell, a Kentucky Republican, informed his rank and file this week he did not support extending the bolstered unemployment insurance in the next round of aid. President Trump has said he is also opposed.
“This will not be in the next bill,” McConnell told GOP lawmakers in a conference call this week, according to a person who participated.
The issue could derail a bipartisan deal on a new round of economic aid.
Republicans cite economic data that indicates the bonus unemployment money has dis-incentivized people from returning to work because, in many cases, it exceeds their regular pay.
“That is a recipe for people not working,” Sen. Bill Cassidy, a Louisiana Republican, said in a hallway interview. “Now, we are paying them more not to work than to work.”
Cassidy said the extra pay would keep unemployment high by discouraging workers from returning to their jobs. “It’s terrible for the recovery,” he said.
New research backs up the GOP claim that the extra benefits are exceeding regular pay of many workers.
“We find that 68% of unemployed workers who are eligible for UI will receive benefits which exceed lost earnings,” University of Chicago researchers reported this month.
In the conference call with GOP lawmakers, McConnell warned the extra money pays people more to remain unemployed than they would earn if they went back to work.
Democrats negotiated including the additional unemployment benefits in the $2.2 trillion CARES Act Congress passed on March 27 in response to the coronavirus outbreak and subsequent rise in unemployment.
A handful of Republican senators tried to block the extra money during the Senate floor debate, but their amendment to exclude fell 12 votes short of the 60 needed to pass it.
Democrats at the time criticized the GOP senators for trying to block extra money for low-paid workers.
“Republicans right now are holding up COVID relief package because the unemployment insurance is TOO GENEROUS,” Sen. Brian Schatz, a Hawaii Democrat, said on Twitter.
Democrats who first pushed for the extra pay aren’t backing down. They want to extend the $600 in bolstered unemployment benefits until next year.
House Democrats and one Republican passed a $3 trillion economic aid package last week that includes a provision extending the extra $600 until Jan. 31, 2021.
Senate Democrats are also in favor of extending the extra money.
In a conference call with Democrats this week, economist Mark Zandi told lawmakers Congress should extend the enhanced unemployment insurance, a person familiar with the call said.
Sen. Jack Reed, a Rhode Island Democrat, has introduced legislation that could extend the extra $600 in unemployment benefits even longer than the House-passed measure. Reed’s bill would extend the $600 federal benefit through Dec. 31, 2020, but allow those getting benefits as of Dec. 31 to continue to receive the money until June 30, 2021.
“Nobody is living it up on $600 per week, but that sum could make a life-saving difference for thousands of Americans,” Reed said. “It is appalling that some lawmakers want to try to financially pressure Americans into choosing between their health and destitution.”
