The newest draft of a bill to reduce the economic damage caused by the coronavirus pandemic includes the most dramatic expansion of unemployment insurance in U.S. history.
Senate Minority Leader Chuck Schumer (D-N.Y.) described it as “unemployment insurance on steroids.”
“This is a great plan. What it says is if you lose your job in this crisis, you can be furloughed by your employer,” Schumer said on the floor on Tuesday.
Lawmakers announced the overall deal had been finalized early Wednesday morning.
Normally, workers can only qualify for benefits if they’re laid off through no fault of their own from a traditional payroll job, and the benefits would only replace a portion of their lost wages — typically about half, with benefits averaging $364 per week.
The new bill will add $600 per week to whatever a worker would normally receive if they’re laid off due to the coronavirus fallout, according to a Democratic aid familiar with the negotiations, which for many workers would amount to full wage replacement. The extra cash would last for four months. Workers will be eligible even if they’re not in traditional jobs, if they work only part-time, or if they are self-employed. Gig workers, independent contractors, and freelancers will also be eligible.
“Freelancers, gig workers, and independent contractors have been excluded from unemployment insurance,” Sen. Ron Wyden (D-Ore.) said in a statement. “A key part of this expansion is filing those gaps so that those who are self-employed, as well as those who are sick or quarantined will be covered for the first time.”
A previous coronavirus relief bill included modest provisions encouraging states to relax work search requirements, which are a standard part of the unemployment system but don’t make sense in a pandemic, when the government actually wants people to stay home. That earlier bill also wanted states to eliminate waiting weeks that delay benefits to people who’ve just filed claims.
The new bill will eliminate waiting weeks and add an extra 13 weeks of federally funded benefits for people who run out of the standard 26 weeks of state benefits. (Some states, such as Florida, offer less.)
The new unemployment insurance provisions are the result of negotiations between Schumer and Treasury Secretary Steven Mnuchin over a multi-trillion emergency bill Congress is racing to pass this week aimed at propping up the U.S. economy and giving relief to workers hit hard by the epidemic. The deal still needs a sign-off from congressional Republicans and President Donald Trump.
The unemployment provisions were not one of the major sticking points of the legislation. Democrats complained loudly about a provision giving what they considered excessive discretion to the Trump administration to funnel billions toward industries harmed by the outbreak. Schumer said Democrats had fought for more oversight of the funds; Republicans repeatedly complained that Democrats shouldn’t have complained so much, given the more generous unemployment benefits.
Unemployment claims rose modestly last week, but only to about 281,000. New claims are expected to surge above 1 million as a result of businesses closing due to the outbreak.
“With more than 2 million Americans losing their jobs overnight, with millions more to follow, states face an unprecedented challenge in administering their unemployment insurance programs,” Wyden said, noting that the earlier bill provided extra funding for state unemployment offices to deal with a surge of claims.
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