WASHINGTON — As the $2 trillion dollars in emergency federal spending to respond to the coronavirus pandemic begins to run out, Senate Democrats are setting out their plans to extend unemployment benefits for millions of Americans.
The plan unveiled Wednesday by Senate Minority Leader Chuck Schumer, D-N.Y., and Sen. Ron Wyden, D-Ore., would extend the $600 weekly federal payment in addition to what states already fund for unemployment, until an individual's state has a sustained unemployment of less than 6 percent.
The current unemployment insurance program, passed as part of the CARES Act in March, provides an additional $600 weekly benefit on top of the state’s benefit that is set to expire on July 31.
“If we fail to renew the $600 per week increase in UI, 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,” Schumer said in a statement.
Republicans say that the expanded benefit incentivizes people not to work, and Senate Majority Leader Mitch McConnell called it “a mistake” on Tuesday.
But Democrats and some economists say that the expanded unemployment benefit prevented further economic fallout and was a lifeline meant to be a living wage replacement for more than 30 million Americans who lost their jobs as the economy shut down this spring.
The proposal comes as the growing spread of the coronavirus is forcing nearly a dozen states to either slow down or roll back reopenings, forcing newly returned workers out of work.
The measure would extend the $600 weekly benefit until an individual state’s unemployment level drops below 11 percent for three months. After that, it would reduce the expanded benefit by $100 for every percent that the unemployment rate falls until the state’s unemployment hits 5.5 percent.
Schumer and Wyden argue that it allows the economy to dictate the need instead of forcing Washington to continue expanding it. It also extends unemployment benefits for gig workers and freelancers.
“Donald Trump has simply given up on fighting the virus and cases are surging in state after state, with many businesses closing their doors for a second time,” Wyden said. “Supercharged unemployment benefits need to be extended and tied to economic conditions on the ground. Workers who have been laid off twice in four months should not have to worry about whether they’ll be able to pay rent come August.”
The Senate is expected to take up the next relief bill in the second half of July. McConnell says it will focus on “kids, jobs and healthcare” and include liability protections for businesses during the pandemic.