Senate Democrats unveiled a plan Wednesday to extend enhanced unemployment benefits until a drop in a state's unemployment rate, when it would be phased out.
Congress approved in March an additional $600 per week in federal unemployment insurance, on top of what states normally provide, as part of the $2 trillion pandemic rescue package. The policy has given the millions of workers laid off or furloughed during the outbreak a critical income backstop, but it expires at the end of the month even as the U.S. unemployment rate hovers above 13%.
The Democrats' plan marks a starting point in talks on a relief bill with Republicans, who want to let the unemployment benefit expire at the end of the month. Democrats say the bill would improve the program by tying additional aid to economic conditions rather than setting an arbitrary date to end it.
The legislation would extend the enhanced insurance through March but reduce the amount beneficiaries receive as the economy recovers. Once a state's three-month average unemployment rate dips below 11%, the benefit would get cut by $100 for every percentage point the jobless rate falls until it slides below 6%.
For example, beneficiaries would get an extra $500 per week if their state's average unemployment rate sits between 10% and 11%. Once it drops below 10%, the enhanced benefit would fall to $400 per week.
Senate Minority Leader Chuck Schumer, a New York Democrat who introduced the bill along with Senate Finance Committee ranking member Ron Wyden of Oregon, said letting the benefit expire would mean "millions of American families will have their legs cut out from underneath them at the worst possible time — in the middle of a pandemic when unemployment is higher than it's been since the Great Depression."
Republicans have opposed extending the policy. They argue that the benefit, which leaves many people making more than they did while working, deters employees from going back to work. Returning is a difficult prospect for many Americans who do not receive hazard pay or guaranteed sick leave during the pandemic.
On Tuesday, Senate Majority Leader Mitch McConnell, R-Ky., said that "to have the basic protections of unemployment insurance is extremely important and should be continued." But he called the extra jobless benefit a "mistake."
Some Senate Republicans and Trump administration officials have supported a back-to-work bonus, potentially paid out weekly. McConnell has said the Senate will consider another coronavirus aid package when it returns from its two-week Fourth of July recess.
The $3 trillion relief bill House Democrats passed in May would extend the enhanced federal unemployment benefit through January.
The June jobs report set for release Thursday will provide a picture of how much the economy recovered as states started to reopen more businesses in recent weeks. Increased risks to Americans' health and the economy have surfaced in recent days as the pandemic continues to rip across the country.
Coronavirus cases across the U.S. have spiked, forcing states including California, Texas and Florida to pause or roll back their economic reopening plans.
The U.S. has reported more than 2.6 million Covid-19 cases and at least 127,000 deaths related to the disease — by far the highest totals in the world, according to data compiled by Johns Hopkins University.