Politics

Surprise job gains narrow the White House vision for coronavirus relief, but Democrats still want to go big

Key Points
  • A surprisingly strong jobs report leaves the White House with a short list of coronavirus relief priorities, such as a payroll tax cut and another round of stimulus checks. 
  • Democrats say the government needs to continue a broad response to sustain the recovery, with other goals including aid for state and local governments and an extension of enhanced unemployment insurance. 
  • The U.S. economy added 2.5 million jobs in May, after losing more than 20 million jobs in April due to the pandemic. 
U.S. President Donald Trump speaks during a news conference in the Rose Garden at the White House June 05, 2020 in Washington, DC.
Chip Somodevilla | Getty Images

Surprise U.S. job gains left the White House narrowing its goals for more coronavirus relief Friday, as Democrats insisted Congress needs to take sweeping steps to sustain the pandemic recovery. 

A month after the economy shed more than 20 million jobs, it added 2.5 million in May, the Labor Department said Friday. The leisure and hospitality industries drove the better-than-expected report, as restaurants and bars rehired workers while states started to reopen their economies. 

The data further complicate an already fraught debate in Washington over whether lawmakers need to pass another economic rescue package — and what it should include. While Republicans pointed to a handful of specific policy goals, Democrats again stressed the need for a broader approach to mitigate the ongoing health and economic crises. 

Trump, while claiming the U.S. is "largely through" the pandemic that has killed more than 108,000 Americans, cast the jobs report as "a very big day for our country." He outlined several policies he wants to pass: a payroll tax cut, another round of stimulus checks for Americans and potential tax incentives to encourage restaurant and entertainment spending. 

VIDEO2:1502:15
Vice President Pence: Coronavirus recovery aid talks will continue despite big May jobs gains

Before the president spoke, Vice President Mike Pence told CNBC that "we're open to helping states with coronavirus-related costs." Democrats want far more relief for state and local governments, which have lost revenue and seen expenses rise during the pandemic. The Labor Department said the U.S. lost 585,000 government jobs in May, primarily driven by school closures. 

Democrats, who have opposed the White House's payroll tax cut push, attributed the jobs gains in large part to the more than $2.5 trillion in relief Congress has passed to respond to the coronavirus. In a statement, House Speaker Nancy Pelosi urged the Senate to approve the nearly $3 trillion rescue package her chamber passed last month — which includes state and local aid, enhanced federal unemployment benefits and direct payments to individuals, among numerous other provisions. 

"The president must join us to support real action to protect lives and livelihoods, rather than hide behind these jobs numbers and pretend that the job is done," the California Democrat said. 

Senate Minority Leader Chuck Schumer added that "now is not the time to be complacent or take a victory lap." In a statement, the New York Democrat noted that the unemployment rate among black Americans rose to 16.8% in May while it fell to 12.4% among white people.

The overall unemployment rate dropped to 13.3%, still higher than at any point after the 2008 financial crisis.

Senate Majority Leader Mitch McConnell, meanwhile, did not close the door on future relief but emphasized that Republicans would tailor legislation to reopening the economy. In a statement Friday, he said "future efforts must be laser-focused on helping schools reopen safely in the fall, helping American workers continue to get back on the job, and helping employers reopen and grow." 

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Trump: This is better than a V-shaped recovery. This is a rocket ship

Last week, McConnell said "we're taking a careful look at a fourth and final bill." He added that "you could anticipate the decision being made on whether to go forward in about a month."

The senator has repeatedly said he will not pass another stimulus bill unless it includes liability protections for doctors and businesses as the economy reopens. Democrats oppose a broad shield from lawsuits. 

The House Democratic bill would extend an enhanced federal unemployment benefit of $600 per week through January. It is set to expire after July, leaving displaced workers who still cannot find a job facing a steep drop off in income. 

McConnell has said he does not want to continue the $600 per week benefit. Last week, he said Congress would "help those who are still unemployed." 

The House will not return to Washington until the end of the month unless the Senate moves before then to pass coronavirus relief. 

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