From $600 a week to $200: How Republicans want to cut coronavirus unemployment benefits
Read more: More stimulus checks? California Democrats say money should go to ‘those who need it’
• • •
Millions of California residents without jobs could soon see an extra $200 a week in their unemployment payments — replacing the $600 weekly they were getting until now — under a plan unveiled Monday by Senate Republicans.
The $200 would be available as soon as the state could adjust its system, and there’s currently no firm estimate of how long that would take.
Under the GOP proposal, the $200 would replace, for up to two months, the $600 payment with a benefit that would be equivalent to a 70% of lost wages, according to Senate Finance Committee Chairman Charles Grassley, R-Iowa. That new sum is likely to be in the $200 to $300 range.
“We want to continue to help the unemployed but we want to encourage work,” he told a news conference Monday.
But there’s likely to be a long way to go before anyone sees any benefit from the Republican plan.
Democrat leaders are balking at the amount, saying it’s too small. The Economic Policy Institute, a progressive research group, estimates losing $400 a week in benefits will mean 557,428 fewer jobs created in California through mid-2021.
The Republican plan should be seen as an opening bid by the GOP, part of what is likely to be an arduous, and perhaps lengthy, negotiation process.
The Democratic-run House approved its plan in May, calling for extending the $600 a week through January. The Republican-run Senate and White House criticized it, arguing that too often that extra money winds up giving unemployed workers more than they could earn on the job.
That’s why the 70% idea has become popular at the White House. But officials also acknowledge that it could be complicated for states to implement, so they came up Monday with the $200 flat payment as a stopgap.
“We want to be able to have it ... be relative to how much they could make in the private sector, which is the way the state unemployment systems work,” said Sen. Rob Portman, R-Ohio, who has been active in helping devise an alternative to the $600 payment.
Democrats Monday were quick to condemn the GOP initiative.
“State unemployment offices are operating with ancient technology and struggling to get benefits out the door as is. Any effort to make the system more complex is sabotage. It will result in workers losing their benefits and more workers falling through the cracks,” said Sen. Ron Wyden, D-Oregon, top Democrat on the Senate Finance Committee.
The California Policy Lab, a nonpartisan research group, has suggested that hundreds of thousands of unemployed state residents could fall below the poverty line without the extra $600.
That’s because, said Wyden, “the low-wage workers who have been most likely to lose their jobs in this recession would be paid even less than their previous starvation wages.”
Unemployment insurance has traditionally been viewed as a way to help provide people out of work with a lifeline, but not such a large benefit that they have little incentive to seek work.
But the coronavirus pandemic created a new dilemma. As Rep. Derek Kilmer, D-Wash., put it, lawmakers did not want people endangering their health when they searched for jobs.
The new payments would be in addition to the regular weekly unemployment insurance payments people now receive. Those benefit amounts in California typically range from $40 to $450 a week for regular state unemployment insurance.
Even if some benefit replacement plan is approved in a Washington process that is likely to take at least another week — and the unemployment provision is just one part of the Senate Republicans’ broad $1 trillion economic relief package — the embattled California Employment Development Department has to implement the change.
The EDD, which manages the California unemployment system, could not say how quickly it could implement new programs. The agency has been overwhelmed by an unprecedented volume of claims, leading to persistent complaints about difficulty reaching anyone at the agency for help.
In the week ending July 18, EDD paid $4.1 billion in benefits, or about $3.5 billion more than the highest week of the Great Recession of 2007-09.
A simple $600 extension could be implemented fairly quickly, EDD spokeswoman Loree Levy said last week. A more complex adjustment would obviously take some time.
“We are preparing as best we can as we await a decision from the federal government. If the guidance is similar to what was previously approved it will be a smoother transition than if new guidelines are created,” Levy said.
This story was originally published July 27, 2020 at 3:54 PM.
.jpg)