TOPLINE
Republicans were set to unveil their proposal for a fifth coronavirus stimulus package on Thursday—the next step in a process that will ultimately decide the fate of relief payments affecting millions of Americans—but GOP lawmakers could not decide how to tweak unemployment payouts, delaying the draft until next week.
President Donald Trump talks to reporters while hosting House Minority Leader Kevin McCarthy … [+] (R-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.) and members of Trump’s cabinet in the Oval Office at the White House on July 20, 2020.
Doug Mills/Getty Images
KEY FACTS
Congress waited with bated breath on Thursday as top Republicans indicated they were ready to unveil their proposal, but ongoing negotiations between the White House and congressional lawmakers led to a surprising delay, as first reported by the Washington Post and New York Times.
Treasury Secretary Steve Mnuchin, the lead negotiator for the White House on stimulus, told reporters Thursday that lawmakers were dealing with “mechanical issues” surrounding the unemployment payouts.
Republicans have settled on slashing the $600 jobless payouts—which are set to expire by the end of the week—but cannot agree on a reduced figure and appear to be against zeroing out the boost outright.
Mnuchin told CNBC Thursday that lawmakers were looking at extending the benefits “based on approximately 70% wage replacement,” a proposal that would translate to flat payouts from the federal government of about $200 per week, $400 less than the current sum.
Some GOP lawmakers are unwilling to back this plan, the Washington Post reports, because flat $200 payouts don’t reflect differences in workers’ prior income.
Instead, some Republicans want the federal government to pay out approximately 50% of what each state pays in unemployment benefits.
WHAT TO WATCH FOR
Democrats are pushing hard to extend the benefits in full, though it’s not clear whether they intend to block a bill that doesn’t include the full $600 benefit.
Chief critic
Sen. Ron Wyden (D-Ore.), one of the architects of the $600 boost, told the Washington Post that tying benefits to a worker’s prior income cannot be done because state unemployment systems are not capable of handling such requests.
SURPRISING FACT
Cutting unemployment benefits from $600 per week to $200 per week would lead to 3.4 million fewer jobs created over the next year, a study conducted by the Economic Policy Institute found.
KEY BACKGROUND
Congress included a $600 across-the-board increase to state unemployment payouts as part of the $2 trillion CARES act it passed in March. Lawmakers decided on the $600 figure because, when added to the average unemployment payout in 2019 ($371.88) it equates to almost 100% of an average American worker per week wage of $933, according figures from the the Bureau of Labor Statistics.
NEWS PEG
Many Republicans were upset with the $600 boost to unemployment payouts because they felt it created an incentive not to work. A study from the University of Chicago cited by the Wall Street Journal found that 68% of unemployed workers eligible for benefits received more money in jobless payments than they did working their previous jobs.
FURTHER READING
GOP struggles with overhaul of unemployment system, complicating negotiations over $1 trillion stimulus (Washington Post)
Are You Eligible For A Stimulus Check In GOP’s New Bill? Here’s The Latest. (Forbes)
