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White House pushes to slash expanded jobless benefits despite rises in unemployment, coronavirus

Republicans have pushed to cut the expanded unemployment benefit in coming legislation because they claim it discourages people from working.
Treasury Secretary Steven Mnuchin speaks with reporters about the coronavirus relief package negotiations at the White House on July 23, 2020.
Treasury Secretary Steven Mnuchin speaks with reporters about coronavirus relief negotiations at the White House on Thursday.Evan Vucci / AP

Top Trump administration and White House officials said Sunday that they want to replace expiring expanded unemployment benefits with a system that pays those out of work 70 percent of lost wages because they feel the current system gives people a reason not to return to the job.

Treasury Secretary Steven Mnuchin said on "Fox News Sunday" that 70 percent of wage replacement from the federal government, as opposed to the additional $600 per week, "is a very fair level."

"I think workers and Americans understand the concept that you shouldn't be paid more to stay home than to work," he said. "That the fair thing is to replace wages, and it just wouldn't be fair to use taxpayer dollars to pay more people to sit home than they would get working and get a job."

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More than 30 million people are unemployed, with unemployment numbers on the rise as the coronavirus continues to grip much of the country. Recent spikes in numbers of COVID-19 cases have led some states to delay or roll back their economic reopenings.

On ABC's "This Week," White House chief of staff Mark Meadows said the additional $600 a week in unemployment would not be expanded because many people earned more in unemployment than they did through their jobs.

"So the president has been very clear, our Republican senators have been very clear, we're not going to extend that provision," Meadows said. "We are going to be prepared on Monday to provide unemployment insurance extension that would be 70 percent of whatever the wages you were prior to being unemployed, that it would reimburse you for up to 70 percent of those wages. Hopefully as a way to get people back on their feet."

Meadows said he expects Senate Majority Leader Mitch McConnell, R-Ky., to introduce the Republican relief package Monday. Democrats, who released their most recent relief package more than two months ago, blasted Republicans for not having a proposal ready before the expanded unemployment benefits were set to expire at the end of July.

"Republicans have had the HEROES Act for two months," Rep. Karen Bass, D-Calif., said on CNN's "State of the Union." "Why would you wait until people are at the point of running out of their benefits? And they still haven't come up with a plan. They are fighting between themselves."

Ben Bernanke and Janet Yellen, two former chairs of the Federal Reserve Board, pushed lawmakers this month to extend the $600 expanded unemployment benefit rather than let it expire. Speaking before the House Select Subcommittee on the Coronavirus Crisis, Yellen said it "would be a catastrophe" not to do so.

Senate Republicans expressed openness last week to either a short-term extension or a smaller cut in benefits than what the administration presented Sunday.

Speaking on "State of the Union," top White House economic adviser Larry Kudlow offered his typically rosy predictions for economic recovery and said the White House would seek to lengthen the federal moratorium on evictions, which barred evictions from properties serviced by federally backed mortgages.

The moratorium ended Saturday.

Kudlow said the administration's unemployment proposal would "cap the assistance at a level that is consistent with people going back to work."

"We have had a flood of inquiries and phone calls and complaints that small stores and businesses, restaurants can't hire people back," Kudlow said. "They went too far."

"Maybe last March it was necessary for that," he said, adding: "I mean, the trick here is going back to work. We don't want people out. ... We want them in wherever possible. The businesses are calling them back. That's why I'm optimistic on the economy."

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House Speaker Nancy Pelosi, D-Calif., criticized the Republican push to remove liability for employers and schools while curtailing the unemployment benefits.

"This is so unfair," she said on CBS' "Face the Nation." "Let's just get to the heart of it. At the point of all of this is this president — I have a new name for him: Mr. Make Matters Worse — he has made matters worse from the start. Delay, denial, it's a hoax, it will go away magically, it's a miracle, and all the rest."

Pelosi said the $600 unemployment bonus would be simple for state unemployment systems to process.

"And figuring out 70 percent of somebody's wages — people don't all make a salary, maybe they do — they make wages and they sometimes have it vary," she said. "Why don't we just keep it simple? Unemployment benefits and the enhancement, which is so essential right now. And that's really where we are starting. It's so important to the American people.

"This is an emergency that maybe they don't understand," she added. "I don't know what they have against working families in America."

On "State of the Union," Bass said that if the expanded benefit discouraged work, it "might be a problem in some places, but the idea that you would cut it across the board makes no sense at all."

"There are some states where the cost of living is a heck of a lot higher, like my state of California," she said. "And as you pointed out, there are a lot of people not going back to work because they know it's not safe. There's also an awful lot of people who don't have the jobs to go back to. So I think this is all about a state of denial that we can just get the economy back and everything is going to go away."