This story was originally published on July 31st, 2020.
The $600 in supplemental unemployment benefits officially expired last week, before an extension was guaranteed in Congress. Most people saw their last federal unemployment payments come through on July 25th or 26th because of the way weekly unemployment schedules work, leaving millions of Americans anxious about their immediate future. Today, a Bureau of Labor Statistics report showed that while 1.8 million jobs were added in July, bringing the official unemployment rate to 10.2%, the unemployment rate for Black Americans remained almost the same. The overall rate of job gains has slowed compared to previous months. In Congress, lawmakers have been debating whether to renew the unemployment boost — but where do we stand now? What happens now that the provision has officially expired?
Are there currently plans to extend it?
Senate Republicans unveiled their proposal, the HEALS Act, on July 27th — and it doesn’t extend the $600. It offers a much more austere across-the-board $200/week through September. Then, starting October, it would leave it up to states to supplement their usual unemployment benefits with extra federal unemployment to total 70% of someone’s lost wages. But the amount of federal unemployment each person is eligible for is capped at $500, so in practice not everyone may get 70% of their wages replaced.
Many states have had enormous logistical problems processing hordes of initial unemployment claims and sending them out in a timely manner. People in some states are still waiting for unemployment payments to start after applying months ago; there have been widespread reports of 8-hour-long lines in front of unemployment offices. Not only are Democrats opposed to this slash in unemployment from an economic and moral perspective, but The Hill reports that some states are saying it doesn’t even sound feasible.
As of Friday, August 7th, there hasn't been a clear sign of which version of federal unemployment boost will be included in the next stimulus — but there has been some movement. Republicans have generally opposed extending the $600/week payment, but on Wednesday Sens. Mitt Romney (R-UT), Susan Collins (R-ME), and Martha McSally (R-AZ) revealed that they would support $400/week for the month of September, and then from October to December replacing 80% of lost wages. Even Senate Majority Leader Mitch McConnell had a change of tune, saying he would support repeating the $600 boost — if President Trump supported it. Trump has stated that he's open to continuing a federal unemployment boost, but he hasn't explicitly supported a renewal of the $600 amount.
How are negotiations going in Congress?
Not well. According to The Hill, lawmakers aren’t close to a deal. In a meeting last Thursday, Treasury Secretary Steven Mnuchin apparently did suggest an extension of the $600 — for a week. This pointless gesture was dismissed by Speaker of the House Nancy Pelosi and Senate Minority Leader Chuck Schumer. White House Chief of Staff Mark Meadows, who was also in the meeting, countered with a four-month extension. Pelosi and Schumer rejoined with an extension through Q1 of 2021. This was rejected by Mnuchin and Meadows.
Both Meadows and House Minority Leader Kevin McCarthy took to Twitter to slam the Democrats standing firm on a longer unemployment extension. McCarthy wrote, “Republicans just tried to extend unemployment insurance for the millions of Americans who are out of work and counting on extra support each week. Chuck and Nancy said no. And now Democrats are going home for the weekend... while they continue to collect a paycheck.” It’s a puzzling criticism, considering that Senate Republicans left for the weekend on Thursday.
Different factions are prioritizing different aspects of the next stimulus. While Democrats seem unwilling to concede on a longer extension of federal unemployment, as well as a new eviction moratorium and more funding to states, Senate Republicans — especially Mitch McConnell, who called it a “red line” — have repeatedly said they would refuse any bill without liability protection for businesses that prevents workers from bringing COVID-19-related lawsuits. Yet the White House announced on July 31st that it would be willing to accept a deal without liability shields.
As of Friday, August 7th, Democrats and Republicans have both said they're not close to reaching a deal yet. Because of this, Trump has threatened to sign an executive order renewing the federal eviction moratorium and the federal unemployment boost. It may also include a payroll tax cut, which lawmakers on both sides of the aisle have opposed as ineffective. Schumer, Meadows, and Mnuchin have all expressed that an executive order is not a good solution, according to The Hill.
How long will it take lawmakers come to a decision?
There’s now a week left before Congress goes into recess until September. The frenzied hustle to pass the next stimulus package, like many other things about COVID-19 in the U.S., could have been avoided. The CARES Act was passed on March 27th, and there were immediate calls in Congress for another plan that would guarantee regular income for struggling households. Rep. Ro Khanna (D-CA) and Rep. Tim Ryan (D-OH) introduced the Emergency Money for the People Act in mid-April, proposing a monthly stimulus payment of $2,000 for at least six months. Rep. Pramila Jayapal (D-WA) introduced the Paycheck Guarantee Act, a measure that would have covered companies’ payrolls for at least three months, reducing the number of layoffs and the demand on unemployment offices. Many European countries quickly enacted a paycheck protection scheme that prevented layoffs and the kind of shocking effect on the economy that the U.S. is grappling with now.
Throughout April and May, top Republican lawmakers continued to delay discussing what needed to come next, even with Federal Reserve Chair Jerome Powell urging them not to allow federal relief measures to expire too soon. Now, having allowed the expiration of extra unemployment that served as a lifeline to many, lawmakers are locked in heated debate and racing against the clock, with August recess technically beginning after today. Lawmakers intend to delay recess and return to Congress next week to potentially vote on a bill — if top Democrats and Republicans can agree to a deal by then.