White House opposes extending $600 a week benefit for jobless workers beyond July
By FRANCESCA CHAMBERS AND DAVID LIGHTMAN | McClatchy Washington Bureau | Published: May 23, 2020
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WASHINGTON (Tribune News Service) — The White House does not support extending increased federal unemployment assistance to workers who lost jobs during the coronavirus pandemic. Instead, economic advisers to President Donald Trump say they prefer to help closed businesses reopen.
Another 2.4 million people applied for unemployment benefits this week, putting the total number of new jobless claims since early March above 38 million. Without additional action by Congress, those workers will no longer receive an extra $600 weekly benefit after July.
That benefit, which began in late March and expires at the end of July, is in addition to the regular weekly unemployment benefits received by Americans who lost their jobs.
House Democrats voted last week to renew the emergency benefits through January, but Trump and his economic advisers are convinced that June will be a turning point for the sluggish economy.
Stephen Moore, a member of Trump's economic task force, called House Speaker Nancy Pelosi's push to extend the benefits "crazy" and the "single most important" economic proposal to stop.
"I know that almost everyone on the task force believes that paying people more money for not working is a really bad idea," Moore told McClatchy on Thursday.
Conservative leaders in close contact with the White House who share that opinion say it was a mistake to provide such robust unemployment benefits in the first place.
And economic advisers to the president are insistent that the most effective tactic for fighting persistently high unemployment is to get people back to work as soon as possible.
"We cannot possibly have a recovery, if we're paying people not to work," Moore said. "Even people in the White House realize what a mistake we made," he said, referring to agreeing to let the extra benefit last so long into the summer.
Trump's advisers have declared a "pause" in negotiations on another large coronavirus aid package, while they determine whether the most recent round of funding was enough to sustain beleaguered businesses and workers through the economic slump.
They have discussed a number of tax deductions for businesses, including a write-off for meals and entertainment expenses, to help jump-start the economy. They would also like to see Congress offer businesses liability protection to lessen the likelihood that they will be sued if an employee or worker becomes ill with the coronavirus.
"We just had a lengthy meeting with the president last week where we went over all of the options, and I think that there's a very good plan for basically entering the next stage of lift off," Kevin Hassett, a top economic adviser to Trump in the White House said Friday on Fox Business.
Hassett said that despite the nearly 40 million jobless claims, "We are kind of on the other side in the sense that businesses are opening up, but we got to make sure they open up with vigor."
The U.S. Chamber of Commerce on a call with reporters on Thursday said an extension of the extra $600 weekly benefit for jobless workers would be a mistake.
"It's important that the unemployment system continue to be designed in a way that encourages and supports people getting back to work and into a job," said Neil Bradley, chamber vice president and chief policy officer.
A White House official, in an email to McClatchy, wouldn't rule out an extension in future relief legislation, but said, "The White House is currently opposed to an extension beyond the current end date."
The fight over extending unemployment benefits is the most polarizing issue facing Congress as it debates how to proceed with another economic aid package.
Any movement on relief legislation is unlikely until late June, the White House has signaled. The U.S. Senate is on recess until June 1.
Senate Republicans have long been opposed to the extra $600 a week, and Senate Majority Leader Mitch McConnell of Kentucky reportedly told House Republican colleagues this week in a phone call that the money will not be in the next bill.
When the initial benefit was approved in March, most Republicans tried to limit any extra payment to 100% of earnings. That failed on a largely partisan tie vote in the Senate.
They raised concerns that the benefit had resulted in some unemployed recipients getting more on an annualized basis than when they were working.
Pelosi urged compassion.
"Please don't resent our lowest-paid workers in America for getting $600 so that they can meet the needs of their families," the California Democrat told PBS NewsHour recently.
JP Morgan reported last week that 65% to 75% of workers laid off nationwide "may be receiving more state and local unemployment benefits than lost wages," at least until the current $600 program expires at the end of July.
In Washington state, for instance, the $600 extra per week could give someone receiving maximum benefits an annualized income of $72,280. That trails only Massachusetts for generous jobless benefits, according to a survey by Zippia, a nonpartisan job and career counseling business.
Southern states tend to pay lower unemployment benefits. Florida's annualized benefit, including the extra $600, is 46th in the country at $45,500, while North Carolina ranks 42nd and South Carolina 43rd. Missouri is 44th.
In California, where the unemployment rate hit a record 15.5% last month, the usual maximum weekly benefit is $450. If the $600 is added, the state could pay as much as $54,600 on an annualized basis to someone who is unemployed. That's higher than the median annual income in several areas of the state, including Fresno, Tulare and Yuba Counties.
"Many of the business owners that use minimum wage workers are certainly worried that the disincentive for workers to come back to work is strong if the checks are large or larger than before," Sanjay Varshney, professor of finance at California State University, Sacramento, said.
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