Unemployment increase set to end as jobless claims climb

Unemployment increase set to end as jobless claims climb

July 16, 2020

A boost in unemployment pay is about to run out for people who lost their jobs due to the coronavirus pandemic — as jobless claims pass 51 million.

The $600 per week federal supplement in unemployment insurance is a flashpoint ahead of talks next week on a new coronavirus bill.

Republicans including Senate Majority Leader Mitch McConnell oppose extending the boost — though there are hints of a potential compromise.

The supplement for weekly unemployment was intended to ensure most people kept the same income if they were temporarily out of work, but it officially runs out at the end of July.

If it’s taken away, people would only get weekly benefits from state governments, which range from less than $250 a week in Arizona and Louisiana to over $1,200 with dependents in Massachusetts.

Many people have returned to work as states allow businesses to reopen, but another 1.3 million Americans applied for first-time unemployment benefits last week.

From the start, Senate Republicans objected to the boost resulting in some jobless people earning more than 100 percent of their prior pay due to varying state rates, saying it created an incentive not to work.

McConnell (R-Ky.) said this month that extending the boost won’t be in a new bill.

“We’re hearing it all over the country that it’s made it harder actually to get people back to work,” he said.

White House economic adviser Larry Kudlow is pushing for a “back to work” bonus to replace the unemployment bump. But signaling room for compromise, Treasury Secretary Steven Mnuchin, the top Trump administration negotiator on past packages, said last week a priority was changing the provision to ensure “no more” than 100 percent of pre-pandemic pay was awarded.

House Democrats passed a unilateral $3 trillion relief bill in May that would include a continued boost in unemployment insurance, along with new rent and mortgage assistance programs. Republicans scoffed at the bill as an unserious wish list.

House Speaker Nancy Pelosi (D-Calif.) said Thursday that Republicans “have to do unemployment insurance.” She said the Federal Reserve spent trillions to prop up the stock market and that “we should have trillions of dollars to prop up workers.”

Republicans “are like in a caste system mode,” Pelosi said.

Republicans are pushing for a bill that includes liability protections for businesses with returning workers and a possible payroll tax cut — meaning there could be a tradeoff. Prior COVID-19 bills were the result of laborious late-night horse trading.

Other items possible in the bill include funding for schools to reopen in the fall, and a possible additional round of direct stimulus payments.

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