The top Democrat on the Senate Finance Committee wants to tie expanded unemployment insurance to states’ unemployment rates during the COVID-19 pandemic, in order to avoid an abrupt end to benefits designed to keep Americans afloat as the virus causes tens of millions of layoffs.
Lawmakers increased unemployment insurance by $600 per week in the CARES Act, but that expansion is set to expire at the end of July.
“What I’m describing is a way to really use objective, market-based criteria to drive the next decision on unemployment insurance,” said Sen. Ron Wyden (D-OR) on a call with reporters.
Wyden outlined his proposal on Thursday, which he wants to include in the next coronavirus stimulus package. Under his plan, the extra $600 would remain in place until a state’s unemployment rate falls below 11%. The additional benefits would gradually phase out by $100 for each percentage point decrease in the unemployment rate.
Wyden told reporters establishing economic triggers would allow the program to “run on autopilot” for the duration of the pandemic.
While negotiating the CARES Act, some Republicans opposed the additional $600, saying some people would make more money from unemployment than they did at their job — which would discourage them from returning to work. Wyden said the triggers would make sure Americans who depend on benefits won’t suffer if lawmakers clash over spending in the future.
“Unemployment is going to remain at historically high levels for months, and maybe even years. Workers wouldn’t be able to just go back to the jobs they once had — and whether those workers pay the rent, put food on the table, pay medical bills should not depend on the short term political calculations,” said Wyden.
Economists are expecting to see a “horrific” April jobs report on Friday, after more than 33 million people filed for unemployment benefits over the past seven weeks.
“I’m expecting a jobs report tomorrow unlike any I’ve seen in my lifetime,” said Wyden. “Congress shouldn’t allow American families to experience that level of unnecessary financial pain and suffering without a helping hand.”
‘Over our dead bodies’
Extending jobless benefits is sure to be another point of contention in negotiations over the next round of coronavirus relief, known as “Phase 4” or “CARES 2.” While Democratic lawmakers have pushed to quickly begin work on the next package, Republican leaders say they want to wait and see how implementing the CARES Act goes first.
“We think we ought to take a pause here, do a good job of evaluating what we’ve already done,” said Majority Leader Mitch McConnell earlier this week.
Wyden’s proposal will face pushback from Republicans, including the Chairman of the Senate Finance Committee, Sen. Chuck Grassley (R-IA).
“Making anything ‘automatic’ in the current crisis, given its unpredictability, doesn’t make sense,” said Michael Zona, a Grassley spokesperson, in a statement. “The government’s response needs to match conditions on the ground. No one can say with certainty what the economy will look like months from now, especially with 50 different state responses.”
Zona added that Congress can pass more aid when there’s a “better understanding of how the economic picture develops,” which would “help ensure any legislation is actually effective and tailored to the needs at the time.”
Last week, Sen. Lindsey Graham (R-SC) said the program would be extended “over our dead bodies.”
Graham forced a vote (which failed) to limit the expanded benefits in the CARES Act, so people couldn’t make more in unemployment than they did at their jobs.
“You cannot turn on the economy until you get this aberration of the law fixed,” he said at a task force meeting about reopening South Carolina’s economy.
Zona told Yahoo Finance going forward, the Finance Committee will take into consideration input from employers that “the beefed up unemployment payments can be a disincentive for hiring.”
Despite the pushback he knows he’ll face from the Republican party, Wyden remains optimistic about building support for a “trigger approach.”
“There will be different ideas presented, but that’s my job…to try to find common ground,” said Wyden.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.