Republicans are considering extending the enhanced unemployment insurance benefit at a dramatically reduced level of $400 per month, or $100 a week, through the rest of the year, sources told CNBC.
Congress passed a $600 per week, or $2,400 a month, boost to jobless benefits in March to deal with a wave of unemployment unseen in decades as states shut down their economies to combat the coronavirus pandemic. The policy expires at the end of July as the U.S. unemployment rate stands above 11%, despite two strong months of job growth.
The GOP, which has not made a final decision on how it will craft unemployment insurance in a bill set to be released this week, previously discussed extending the benefit at an additional $200 per week instead of $600. Democrats want to make the $600 per week sum available at least until next year.
The level Republicans are mulling would slash the amount of money beneficiaries receive at a time when roughly 30 million people are receiving unemployment insurance in some form. The additional assistance has helped Americans cover food and rent during the outbreak, and many economists say it has boosted household spending and buoyed the economy.
The GOP contends the $600 per week sum deters people from returning to work because many make more at home than they otherwise would have at work. Lawmakers initially set the threshold because certain states' outdated unemployment systems may have been unable to process setting payments at 100% of an applicant's wages.
As congressional leaders acknowledge they will likely miss the July deadline to pass a broad coronavirus relief package, Republicans are considering passing separate legislation to temporarily extend the strengthened unemployment insurance. Democrats appear unlikely to support a short-term extension.
Responding to a potential temporary extension, Senate Finance Committee Ranking Member Ron Wyden, D-Ore., said Wednesday in a statement that "Republicans have had months to propose a plan for extending supercharged unemployment benefits, and they still have nothing to offer," according to NBC News. The senator previously proposed a plan to phase out the $600 per week benefit as state unemployment rates fall.
Unemployment insurance is only one of the thorny issues the Republican-held Senate and Democratic-controlled House aim to hash out in the next coronavirus aid bill. Lawmakers will also have to decide how to handle direct payments to individuals, aid for state and local governments, funding to help schools reopen, rent and mortgage assistance, and liability protections for doctors and businesses.
Republicans hope to keep the cost of the package around $1 trillion, though Democrats have argued that level of spending would be insufficient.