WASHINGTON — A major lifeline for unemployed workers expires at the end of the month, and Congress is deeply divided over whether to extend it.
Currently, people drawing unemployment receive an extra $600 per week on top of state benefits as part of the CARES Act passed in March to respond to the coronavirus pandemic. That support is supposed to end July 31 — right as temporary bans on evictions in some states across the country are also expiring — but because states pay out their unemployment benefits on the weekend, the last date people will get the extra $600 is Saturday or Sunday. More than 17 million people are currently drawing unemployment.
The Senate met on Monday for the first time after a two-week break, revealing there is still broad opposition among Republicans to extending the unemployment program. They say the benefit is too generous and that people are refusing to return to work because they can make more money staying unemployed.
“We can’t ignore what employers are telling us, that they’re having trouble bringing people back,” said Sen. Marco Rubio.
But several Republicans did express openness to extending some kind of additional federal money if it could be tapered to an individual’s earnings. Under this system, unemployment benefits would be capped at a person’s former salary or even lower.
The problem is that it’s far from clear whether that is even possible. Democratic Sen. Ron Wyden, one of the key architects of the unemployment benefit, said Democrats initially proposed an income replacement system instead of a flat rate of $600 per week. But Wyden said they were told by Trump’s own labor secretary, Eugene Scalia, that implementing income replacement across 50 states with differing and sometimes antiquated equipment would not be possible.
The $600 flat rate ended up passing instead for the simple reason that it was possible to enact. Wyden said they have not heard any word from Scalia since then whether wage replacement was possible. “He’s never changed his mind,” said Wyden.
The Department of Labor did not respond to a request for comment as of deadline. Wyden and Senate Minority Leader Chuck Schumer are proposing another idea — varying the payment amount depending on the unemployment level in the state.
Republican Sen. Rob Portman is proposing lowering the unemployment benefit but attaching a “back to work” bonus for people who return to the workforce.
This will be one of the major negotiation battles of the next coronavirus response bill. Politicians in Congress have just three weeks to negotiate a bill before they are scheduled to break for the rest of August.
The two parties are starting off wildly far apart. Democrats want more money for state and local governments, which many Republicans oppose, and more money for COVID-19 testing and contact tracing, which the White House wants to kill.
Senate Majority Leader Mitch McConnell has insisted liability immunity — which would prevent people from suing employers, businesses, and schools if they contract COVID-19 — must be included in the bill. Democrats say that’s a nonstarter.
Despite these major hurdles, the real negotiating hasn’t even begun. The Democrat-controlled House passed its own $3 trillion aid bill that the Republican-controlled Senate has ignored. Republicans are now finalizing their own plan, which they expect to lay out on Tuesday.
This is all prelude. Sen. John Cornyn said the real negotiating will be done between the White House and the top four congressional leaders, McConnell, Schumer, House Speaker Nancy Pelosi, and House Minority Leader Kevin McCarthy.
“Then they’ll present it to the rest of us. We’ll try to find where that consensus is,” Cornyn said. “We’ll get it done before we leave.”