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Jobless Aid Expires as Talks Continue on Coronavirus Package

A $600 weekly supplement to unemployment benefits that has provided a key economic lifeline for millions of Americans ends Friday with Republicans and Democrats still quarreling over a path forward on a fifth coronavirus relief bill.

The expiration of the federal jobless payment — which Republicans have sought to reduce because it pays many recipients more than they could make working — comes as the jobs market is again faltering. Federal data for the week ending July 25 showed initial applications for unemployment benefits rising for the second straight week, and the number of people receiving jobless aid increased by 867,000 to 17 million in the week ending July 18.

While the aid effectively ended in many places last weekend, the official expiration Friday will put fresh pressure on lawmakers in Congress to come together on a deal after weeks of disagreement. Democrats want to keep adding the weekly $600 to state unemployment benefits through January.

Senate Republicans took a procedural step on Thursday allowing possible votes on legislation targeted at just unemployment insurance next week. An earlier effort by two GOP lawmakers to unanimously approve a measure reducing the unemployment benefit failed.

Republicans hope that bringing measures to the Senate floor, even if they aren’t going to become law, could help propel negotiations forward.

“We need to get things moving, and this gets things moving. I think our guys want to vote, they want to be able to prove that they’re moving the ball down the field,” said Sen. John Thune (R., S.D.), the No. 2 Republican in the Senate. “I think we’ll start next week debating in earnest, hopefully.”

In shaping that deal, Republican have prioritized liability protections for businesses, while Democrats are seeking a moratorium on evictions and funding for state and local governments.

Several GOP lawmakers have said previously that they didn’t support only addressing unemployment insurance, instead advocating for Congress to stay focused on passing a broader relief package. Others are opposed to any additional spending, wary of adding more to a ballooning deficit.

In their $1 trillion bill, Republicans proposed reducing the $600 weekly supplement to $200 before setting up a system that would limit combined state and federal jobless aid to 70% of a worker’s previous wages. Republicans have said the supplement has slowed the job market’s recovery, though some economists have contested that claim.

Lawmakers have said that any eventual agreement on the unemployment benefits will be backdated until Aug. 1. States’ ability to rapidly resume sending enhanced unemployment checks will be affected by what Congress decides: States could quickly resume sending out the extra $600, according to several state labor officials. But the officials indicated it may take days or weeks to even lower the flat payment to $200 a week, and possibly months to calculate benefits as a percentage of a worker’s previous income.

Democrats have rejected Republican efforts to reduce the amount of aid to unemployed workers and have also insisted on passing one, comprehensive piece of legislation. They also fault Republicans for waiting to produce their plan, criticizing the decision by Senate Majority Leader Mitch McConnell (R., Ky.) to pause negotiations for weeks this spring and summer. Mr. McConnell has said he wanted to wait and see how the economy recovered before committing to more legislation, but the delay sharply limited the time for talks before jobless benefits expired.

“This is the worst health crisis in 100 years, this is the worst economic crisis in 75 years, and unfortunately at this great moment of terrible trouble in our country, our Republican friends are paralyzed,” Senate Minority Leader Chuck Schumer (D., N.Y.) said. “And when they want to do something it’s a stunt.”

Democrats passed a roughly $3.5 trillion bill in the House in May, covering an array of issues that lawmakers are also now trying to work out. Aid for state and local governments, money for schools, legal protections for businesses and health-care providers, and another $1,200 of stimulus checks are all among the issues Congress is working to quickly address.

Mr. McConnell has called the Democrats plan a “multitrillion-dollar boondoggle.”

Commerce Department data has shown that the jobless aid and stimulus checks caused household income to grow this spring, allowing many Americans to continue paying for rent and other essentials even as much of the economy shut down.

A University of Chicago study found 68% of unemployed workers who are eligible for benefits receive more in jobless payments than their lost earnings — with the median payment 34% more than their former weekly paychecks. A Congressional Budget Office analysis of the $600 weekly benefit concluded that continuing it through January would help increase overall economic output in the second half of 2020 but reduce it in 2021.

Among those currently receiving more on unemployment than she did at her job is Sandra Rivera, 57. Previously, Ms. Rivera said she made roughly $250 a week as a cabin cleaner working around 30 hours a week for airport services company Eulen America at the Orlando airport. She was laid off from her job in April, but had difficulty applying for unemployment benefits and only began receiving them in June, getting a weekly benefit that totaled $850, including the $600 weekly federal supplement.

With help from the Cares Act, Ms. Rivera said she has managed to save some money — about $3,000 at the moment — while also trying to look for work. She’s applied to jobs at places such as Walmart and Sam’s Club, but especially given that she doesn’t speak English, so far, she hasn’t had any luck.

Until recently, Ms. Rivera was on food stamps, but they have since lapsed and she plans to reapply. The $600 a week, she says, is critical in helping pay for her electric bill, gas, insurance and $1,000 in monthly rent. With just $250 in unemployment from the state alone, she says she couldn’t pay her bills, especially now that her father, who used to live with her and contributed about $300 a month to their living expenses, moved to Puerto Rico in May.

“It’s not like it’s free money,” she says, adding that she and others have paid taxes for years.

She says she knows that people think there are some people who don’t want to work, but she isn’t one of them. “I’m scared about losing the roof above my head,” says Ms. Rivera, who spoke through a translator. “Of course I want to work.”
Source: Dow Jones

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