President Donald Trump suggested opposition to extending the currently expanded federal unemployment benefits — which are set to expire in July — in a meeting with Senate Republicans on Tuesday, even as unemployment reaches Great Depression-era levels.
In March, Congress passed what Senate Minority Leader Chuck Schumer (D-N.Y.) called “unemployment insurance on steroids” — a $600 weekly increase in federally funded benefits, which Americans would receive on top of their state benefits. Last Friday, the Democratic-controlled House voted to extend the benefits through Jan. 31, 2021, with the expectation that the economic fallout from the coronavirus pandemic will stretch into the next year.
Sen. Lindsey Graham (R-S.C.), a close Trump ally who has been vocal in his opposition to the expanded benefits, asked the president to oppose any continued expansion of unemployment insurance. Trump did not rule out signing a bill that would extend current benefits but was sympathetic to Graham’s position.
“He agrees that it is hurting the economic recovery,” Graham said after the meeting.
Roughly 25 million Americans are currently receiving these boosted unemployment benefits as the joblessness rate nears 15%. More than 36 million Americans have filed unemployment claims in the last eight weeks. Eliminating the expanded benefit would effectively cut their incomes by more than half, even as the coronavirus continues to spread. Though cities and states are loosening their stay-at-home orders, businesses are still heavily restricted and public health experts caution returning to pre-pandemic-level business activities, warning that it could lead to a spike in infections.
“With nearly 1 in 5 Americans out of work, Donald Trump’s plan is to cut off the boost to unemployment benefits and shower his wealthy buddies with more tax cuts,” Sen. Ron Wyden (D-Ore.), who was behind the original proposal to boost federal unemployment insurance, said in a statement on Tuesday. “This is the worst economic crisis in 100 years and Donald Trump is doubling down on Herbert Hoover’s economic playbook and pushing workers to risk their health for his political benefit.”
Despite widespread bipartisan support for the higher unemployment payments, many Republican senators have expressed opposition to them from the beginning — specifically because for some lower-paid workers, they have provided a higher income than their previous wages.
“I want to make people whole who lost their job through no fault of their own,” Graham said in a tweet on April 22. “But I don’t want to pay people more NOT to work than to actually go to work.”
Graham first argued that higher benefits would “encourage” people to leave their jobs, though it should be noted that those who quit their jobs are not eligible for unemployment insurance. Now, Graham and other Republican senators argue that they will undermine economic recovery efforts as states begin to loosen stay-at-home orders and businesses look to rehire workers.
“We’ve heard from worried hotels, restaurants, and barbershops in Texas unable to rehire their workers and now at risk of losing their P.P.P. loans they need to survive,” Sen. John Cornyn (R-Texas) said in a statement earlier this month, referring to the Paycheck Protection Program, another federal effort to mitigate the pandemic’s economic fallout. “In their rush to exploit this crisis for their own gain, Democrats overlooked this, and it’s shameful.”
But economists argue the jobless numbers won’t recover by July 31, when the current federal unemployment benefits expire, and cutting the benefits could hamper the economic recovery by limiting Americans’ consumption ability.
Claudia Sahm, director of macroeconomic policy at the Washington Center for Equitable Growth, told HuffPost that she expects unemployment to rise closer to 30%. She argues for continued investment in these benefits.
“I don’t think it has to be 600 bucks, but like $300 or $200,” Sahm said. “Fifteen percent unemployment is really scary. I think there’s another bite of the apple when the May numbers come out.”
Researchers at Columbia University estimate that if the unemployment rate reaches 30%, the annual poverty rate in the United States could increase to 18.9%, as more than 21 million Americans fall into poverty.
In addition to unemployment benefits, House Democrats have backed additional $1,200 direct payments, $175 billion for housing assistance to help eligible people pay rents and mortgages, and a 15% increase in food benefits provided under the Supplemental Nutrition Assistance Program.
The White House has called for measures like a payroll tax cut, but Republican lawmakers have been reluctant to pursue any additional relief. Senate Majority Leader Mitch McConnell (R-Ky.), who called the Senate back into session to continue pushing through a slate of judicial nominees, has said he sees no “urgency” in passing another coronavirus relief bill immediately.
While that urgency may come as states continue to feel the impact of the pandemic, Trump is already sending the message that future financial aid may be less generous — a position that Democrats are already attacking.
“Donald Trump just proved once again that he doesn’t care one bit about the well-being of the American people,” Democratic National Committee Chair Tom Perez said in a statement on Tuesday. “Families are suffering; small businesses have shuttered; workers have lost their jobs, their savings, and even their lives. And yet, this president doesn’t think Americans deserve relief.”
Igor Bobic and Emily Peck contributed reporting.
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