WASHINGTON – The $600 boost millions of Americans have been receiving on top of their weekly unemployment benefits is set to run out as Congress dives into what is likely to be contentious negotiations over the future of the program.
The bolstered benefits have marked one of the most divisive issues on Capitol Hill, with Republicans arguing Americans are making more money on unemployment — thus disincentivizing many from wanting to return to work — as Democrats and activists point to the still alarmingly high unemployment rate and argue that slashing the benefits could be dire for families who need them.
House Democrats are demanding the $600 boost simply be extended until at least January but many Republicans on Capitol Hill have dubbed the extension a non-starter and instead either want the program reformed or replaced with a back-to-work incentive in hopes of helping jump-start the economy and getting shuttered businesses to rehire laid-off workers.
It will end sooner than you think:Think that extra $600 in unemployment benefits will last until the end of July? Think again.
Moment of truth on unemployment:Some homeowners expect struggle to pay mortgage when extra unemployment ends
“This is urgent,” House Speaker Nancy Pelosi said last week about the need to extend the benefit. “They need to buy food. These are necessities. And when people use that money for necessities, they inject demand into the economy and create jobs. So, it is a stimulus. But it is more than a stimulus; it is a necessity right now.”
The extra weekly payment of $600 was part of the CARES Act, a $1.8 trillion package Congress passed in March to help the nation weather the economic storm brought by the coronavirus pandemic, which shuttered businesses, slowed spending and erased a staggering 22 million jobs in just two months.
The unemployment rate in June fell to 11.1%, slightly down from its peak in April when it hit a jarring 14.7%. The numbers are a far cry from the 3.5% rate in February before the pandemic started ravaging the U.S. economy.
Many Democrats and activists have pointed to the potential impacts on families should the boosted unemployment benefits see an end. Roughly half of Millennial and Gen X mortgage borrowers say either they or someone in their household receive unemployment benefits, and many are concerned about paying their mortgage once the extra weekly benefits end, according to a new report from LendingTree.
On Tuesday, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows are set to brief Senate Republicans on the administration’s priorities for the next coronavirus package, something Mnuchin said he anticipates getting across the finish line before the end of the month.
“We’re going to make sure that we don’t pay people more money to stay at home than go to work,” Mnuchin said on Monday at the White House. “We want to make sure that people who can go to work safely can do so. We’ll have tax credits that incentivize businesses to bring people back to work.”
The meeting on Tuesday will be followed by another with Pelosi and Senate Minority Leader Chuck Schumer, the two top Democrats on Capitol Hill. It will mark the first earnest negotiations between Democrats and the administration over the package.
Since the outbreak first hit the U.S., Congress and the White House have approved more than $3 trillion in aid, passing a series of bills that provided loans and grants to businesses hurt by the pandemic, stimulus checks to Americans, expanded unemployment for laid-off workers and funds for increased testing and vaccine research. But it has been months since the passage of the last package passed, and there are sharp partisan divisions over the next phase.
For this round, House Democrats passed a $3 trillion bill in May that includes an extension of the $600 increase in unemployment benefits, a second $1,200 stimulus check for individuals and families, about $1 trillion for state and local governments, additional worker protections and increased funds more money for testing and contact tracing.
Senate Republicans have rejected the House bill and are expected to release their own proposal this week. Among their priorities: more funds more money for schools so they can reopen in the fall and liability protections for businesses worried about being sued by customers who contract COVID-19 in their reopened restaurants and shops.
The president also has outlined his own priorities, namely a payroll tax cut that he argues would help boost economic growth. Republicans for months have pushed back against the proposal but House Minority Leader Kevin McCarthy, R-Calif., said Monday that Republicans were may include it in their proposal.