The CARES Act passed in March provided unemployed Americans with an incredible safety net: $600 extra a week in unemployment benefits. But that additional weekly bonus is set to expire at the end of July, leaving millions of unemployed workers standing to lose $2,400 a month.
Will the government vote to extend the $600 weekly federal benefit, or will many Americans enter the month of August without it? Here’s what we know so far.
Senate Democrats Push to Extend $600 Weekly Unemployment Bonus
On Wednesday, July 1, Senate Democrats unveiled a new plan to extend enhanced unemployment benefits through the next few months. According to Senate Minority Leader Chuck Schumer, who introduced the bill along with Senate Finance Committee member Ron Whyden of Oregon, the Democrats’ new legislation would extend enhanced unemployment benefits but reduce the amount beneficiaries receive as the economy recovers.
In the plan, the exact amount of enhanced unemployment would be tied to each state’s three-month average unemployment. Once a state’s rate falls below 11%, the benefit available to the jobless would be cut by $100 for every percentage point the unemployment rate falls.
For example, if Pennsylvania’s unemployment rate fell to a three-month average of 10.5%, unemployment beneficiaries would receive an extra $500 per week, rather than $600 per week. Once the average dropped to 9.5%, beneficiaries would receive $400 per week.
Republicans Support a Back-to-Work Bonus Alternative
Republicans haven’t been quick to support the Democrats’ push for extended enhanced unemployment. Instead, some Senate Republicans and Trump administration officials have voiced support for a back-to-work bonus paid out weekly.
Under the back-to-work bonus model, employees who return to work would receive temporary bonus payments each week. Rep. Kevin Brady of Texas, for example, proposed allowing workers to keep two weeks’ worth of $600 enhanced unemployment benefits, essentially creating a $1,200 “hiring bonus” to encourage people to get back to work.
Congress Will Reconvene After July 4th
Though millions of laid off American workers are anxious to learn the fate of their unemployment benefits, they will have to wait until the Senate returns from its two-week Fourth of July recess. In the meantime, Senate Republicans have started putting together their own fifth COVID-19 aid package.
“What I can tell you without fear of contradiction is the focus will be kids, jobs, and health care,” he said Tuesday, June 30, after a closed-door meeting with Republican Senators. It’s yet to be seen how the Republican’s proposals will differ from the Democrats’ HEROES Act, which passed the House of Representatives in the spring.
Financial experts agree that the worst economic impacts of the COVID-19 pandemic have not come to pass. “We put a great deal of support into propping up the economy in the short run,” said Jay Shambaugh, senior fellow at the Brookings Institution. “That prevented the immediate economic impacts from being much worse. But the economic impacts of the pandemic will last more than a handful of months. It is really important to tie the fiscal support to economic conditions…rather than have policies end with a cliff based on arbitrary timelines.”