Senate Republicans seek reduction of $600 unemployment benefits in stimulus package
Senate Republicans are seeking to reduce — but not eliminate — unemployment benefits related to the pandemic that are expiring at the end of this month, so that recipients are not making more money from the benefit than they did while working.
A $600 weekly benefit that Congress included in a stimulus bill earlier this year will expire next week. Lawmakers are racing to pass a new bill that includes emergency relief for businesses and workers before the fast approaching deadline.
Republicans are rallying behind a reduction in the extra federal benefit. One idea under discussion is to lower the $600 weekly benefit to a flat amount. Another proposal gaining traction would make it a percentage of what individuals were earning before they were laid off.
“What I would try to do is something as a percentage of wages,” said Sen. Ron Johnson, R-Wis., chairman of the Senate Homeland Security & Governmental Affairs Committee.
An extension of the current amount of the pandemic unemployment benefit is not supported by President Donald Trump or his advisers. The Trump administration indicated this week, however, that it wants compromise legislation being negotiated on Capitol Hill to include some additional unemployment benefits.
Sen. Lindsey Graham, who helped lead an unsuccessful effort in March to eliminate the $600 a week federal unemployment benefit, said Tuesday that he got a sympathetic ear from Trump at a Monday evening dinner.
“We’re gonna have to reduce the benefit, but have a federal benefit but reduce it,” the South Carolina Republican told McClatchy.
Graham argued in March that the extra $600, a benefit that is scheduled to end next week, would reduce motivation for unemployed recipients to look for work.
“There are some people who can’t go back to work that need some help on top of state benefits. We’ve just made it so that it’s a disincentive. Just some compromise on the number that will make it easier to reopen the country,” Graham said Tuesday.
The fate of the $600 benefit is uncertain. The House extended it through January in legislation it passed in May, but Democratic moderates are pushing a plan that would tie the amount of a benefit to a state’s economic conditions.
Republicans have been reluctant to support any benefit. But Graham, like some other Senate Republicans, faces a potentially tough reelection challenge.
A University of Chicago study in May found that construction workers and retail, sales and food service workers, as well as medical assistants and janitors often were receiving more in jobless payments than they earned while working.
Stephen Moore, an outside economic adviser to Trump, told McClatchy on Tuesday that the benefit is “bad economics” and “unfair” to Americans who are still working.
Moore, who prefers a return to the regular unemployment system coupled with a payroll tax cut and direct payments to financially distressed families, said a reduced benefit of $200, for example, would be more appropriate than the $600 a week that minimum wage workers are currently receiving.
That reduction could emerge as 70 percent, 80 percent or 90 percent of an individual’s previous wages, he said, so that jobless workers are not making more than they had earned.
Republican senators and the White House are still trying to determine how to craft the legislative package.
“I don’t want to talk specifics about that,” White House chief of staff Mark Meadows told reporters Tuesday on Capitol Hill. “We’re actually having good conversations about that.”
Moore could not say which of the plans to reduce the benefit the White House prefers.
“I don’t think that’s answerable right now,” he told McClatchy. “I think they’re mulling all these options. I don’t think they’ve come to a conclusion yet. I think they’re weighing all sorts of different ways you could do this in a way that would be fair to people who lost jobs but also fair to people who are still working.”
White House press secretary Kayleigh McEnany did not say which plan Trump supports at a Tuesday briefing, where she said that the White House wants a coronavirus aid package completed before the July 31 expiration of the unemployment benefits.
“We don’t want something to be an incentive where someone gets overpaid and has a disincentive from going back to work, or they get paid more on unemployment benefits than at work,” she said. “So we want to be cautious about that while making sure that those unemployed are taken care of.”
Trump acknowledged later at a news conference that a reduction in the unemployment benefit is under discussion.
“They’re thinking about doing 70 percent of the amount. The amount would be the same, but doing it in a little bit smaller initial amounts, so that people are going to want to go back to work, as opposed to making so much money that they really don’t have to,” he said.
Lawmakers are also aiming to have a package completed by the end of the month. They are scheduled to go on a month-long recess the same day that the unemployment benefits will run out.
Senate Finance Committee Chairman Charles Grassley, R-Iowa, said the current benefit presents “a real problem we’ve got to work with.”
He would not rule out a reduced benefit. “Only thing I can say is this whole process is the art of compromise,” he said.
Updates with Trump comment at news conference.
This story was originally published July 21, 2020 at 1:35 PM with the headline "Senate Republicans seek reduction of $600 unemployment benefits in stimulus package."
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