Treasury Secretary Steve Mnuchin says the White House is seeking to propose a cap on unemployment benefits that would restore up to 70% of lost wages.
The move comes as Congress debates the next stimulus package to aid those affected by the coronavirus pandemic. While Republicans have already made it clear that they’re opposed to extending the extra $600-per-week benefit that was included in the initial CARES Act, House Speaker Nancy Pelosi has said Democrats won’t accept a short-term extension of unemployment benefits.
The hesitation to keep the $600-per-week benefit comes as GOP lawmakers fear it is an incentive for people not to work since some individuals are earning more through unemployment than by actually working. The benefits are set to expire on July 31.
“We knew there was gonna be large unemployment,” Mnuchin said on Fox News Sunday. “We had a technical issue with the states and how they were gonna be able to do this number, so we picked a number that on the average looked OK, but what we’ve seen is now that we want to have the technical correction, and we want to have something which pays people about 70% wage replacement, which I think is a very fair level. So it’s not a fixed number, it’s something that pays you a percentage of your wages that are lost.”
Over 30 million U.S. residents are facing unemployment as the country continues to grapple with different timelines for reopening the economy, especially at a time when cases of the coronavirus are surging in some parts of the country.
In June, the U.S. economy added 4.8 million new jobs.
“People thought we’d have 40 or 50 million people unemployed, the good news is we never got anything like that, and matter-of-fact we’ve created and brought back an enormous number of jobs. So all these different pieces have to work together,” Mnuchin said. “The Paycheck Protection Program, or whether it’s the direct payments we send or whether it’s the money to schools, all this works together.”
