Republicans torn on how to address expiring unemployment benefits

The Senate GOP has signaled the $600 benefits are not likely to continue

July 21, 2020, 9:29 PM

As enhanced unemployment benefits expire at the end of the month, Senate Republicans have found themselves in a race against the clock to find an agreeable expansion to the program as part of the next coronavirus relief package.

Most Republicans support some sort of expansion to the program, but many have argued that the program, in its current state, is a non-starter.

Under current law, passed in March as part of the first coronavirus stimulus legislation, those claiming unemployment receive a $600 weekly federal benefit on top of their regular state jobless benefit. But as Republicans look to retool the program to ensure that only pre-pandemic salaries are replaced and nothing above that, many have argued that the current benefit is far too high and is leading to a disincentive to work for some.

The special pandemic program is set to expire on July 31, though the Department of Labor said the final checks will be distributed this weekend.

"The (Federal Pandemic Unemployment Compensation) $600 can be paid for weeks ending no later than the week ending prior to Friday, July 31, 2020,'' the U.S. Department of Labor said in a statement to USA Today, which first reported the news. "For all states except (New York), that is Saturday July 25th. New York's end date is Sunday, July 26th."

The approaching deadline comes as millions of Americans continue to file for unemployment. There were 17.8 million people were unemployed in June, and this data does not account for recent surges in coronavirus cases which have caused some states to scale back or cancel their re-opening plans.

Senate Republicans are looking to deal with the historic unemployment crisis in their next COVID-19 relief bill which GOP leader Sen. Mitch McConnell says is on track to be unveiled this week ahead of negotiations with Democrats.

The massive package will address, among other components, funding for schools, testing, liability protections, expansions to the federal small business paycheck protection program and direct payments to Americans.

But Republicans are far from united on an overall package, let alone what to do with unemployment benefits, a situation that is likely to see those in need go without a check.

When asked if it was possible to have a bill passed by the end of next week, McConnell scoffed and said, "No."

Republicans have argued that a $600 benefit is too generous and disincentivezes working class Americans, some of whom are making more on unemployment than they did while working, from returning to their place of work -- a position with which President Donald Trump agrees.

Asked about the amount of enhanced unemployment benefits, he said he would be OK with it the next round of coronavirus relief legislation from Congress.

"They're thinking about doing 70% of the amount," Trump said. "The amount would be the same but doing it in a little bit smaller initial amounts so that people are going to want to go back to work. As opposed to making so much money that they really don't have to."

PHOTO: Chairman Sen. Chuck Grassley, R-Iowa, speaks as Trade Representative Robert Lighthizer appears at a Senate Finance Committee hearing on U.S. trade on Capitol Hill, June 17, 2020.
Chairman Sen. Chuck Grassley, R-Iowa, speaks as Trade Representative Robert Lighthizer appears at a Senate Finance Committee hearing on U.S. trade on Capitol Hill, June 17, 2020.
Andrew Harnik/AP, FILE

Sen. Chuck Grassley, an Iowa Republican who chairs the Senate Finance Committee, has for weeks argued that while the unemployment benefit cannot simply drop off, it should also not serve as an unfair competitor to business owners who are looking to hire back employees.

"I think we're going to have to find the compromise between those who want to cut it off completely, but we can't go to $600 for another six months," Grassley told ABC News Monday.

Sen. Mitt Romney, R-Utah, said Tuesday that he supports an expansion of the program, but argued a scale-back is going to be necessary.

"We certainly need to continue to help people with unemployment provisions," Romney told reporters, but he said the number would be "far lower" than $600.

Two Republican aides involved in the talks have said negotiators have discussed a reduction to $400 per week, but the details of any final product remain unclear.

Some members of the Republican conference have suggested tying the unemployment benefit to each individual's income. But that is a proposal that states have said would be logistically complicated to execute given the outdated unemployment systems many are using.

Romney said Tuesday he believes that there will have to be some sort of flat rate agreed to due to these technical challenges.

PHOTO: Sen. Mitt Romney, Republican of Utah, heads into a Republican policy lunch on Capitol Hill, July 21, 2020.
Sen. Mitt Romney, Republican of Utah, heads into a Republican policy lunch on Capitol Hill, July 21, 2020.
Olivier Douliery/AFP via Getty Images

Even with the current flat-rate payments, many states have struggled to stand up a system robust enough to accommodate the bonuses.

ABC News reported in May that individuals who filed for unemployment were waiting weeks to receive their benefits.

Still, Sen. Rob Portman, R-Ohio, suggested on Monday a version of unemployment benefits that would tie the benefit to income.

"You can tie it to the individual," Portman said. "There's a way to do it as a percentage of the actual unemployment that they're paying which is based on their wages."

According to Portman, states would be able to produce payments using this method since it would rely on data they already collect from individuals filing for unemployment and formulas already employed to produce the state benefit.

Portman has also proposed a "back to work bonus" which would give Americans who return to their jobs $450 a week for several weeks to entice their return.

Democrats, however, are holding firm on their stance that $600 a week is where the benefit should remain, approving the extension in a $3 trillion House-passed coronavirus stimulus bill.

Senate Democratic leaders have introduced a proposal which would gradually scale down the amount of unemployment benefits individuals receive as the unemployment rate dips.

It's not yet clear if that effort, led by Sen. Ron Wyden, D-Ore., will gain favor with Republicans. But Wyden and other Democrats have urged Republicans to continue taking the unemployment rate seriously.

"You've got to be living in a country club fantasy land to believe that this economic crisis is anywhere close to ending," Wyden said earlier this month.

Though almost all of Congress appears to believe additional benefits will be required, it's likely the program will still lapse -- at least temporarily -- while the Senate continues to negotiate an agreeable path forward.