Senate Minority Leader Chuck Schumer (D-N.Y.) and Sen. Ron Wyden (D-Ore.) Wednesday rolled out legislation that would extend the “supercharged” federal subsidy to unemployment insurance.
The proposal would extend until March 2021 the current $600 a week unemployment boost, though it includes an “automatic stabilizer” to phase down the benefit in states where the three-month average jobless rate declines below certain thresholds. The subsidy, established in the CARES Act (Public Law 116-136), is set to expire July 31. Talks on whether, or how, to extend it will be a major talking point of the next round of economic aid.
The $600 per week additional unemployment would begin to phase down by $100 if a state reaches an average 11% unemployment rate over three months, and continue to decrease by $100 per percentage point in decrease of unemployment until that rate drops below 6%.
Under the terms of the Schumer-Wyden bill, normal unemployment benefits would be extended until late March 2021, a year after the CARES Act became law, when it would then fully sunset only if a state’s unemployment rate drops below 5.5%. Like the $600 “plus up,” the unemployment extension would begin to phase down as unemployment levels decrease, with 8.5% the minimum threshold.
The bill would also provide an extension of eligibility for unemployment benefits for contractors, part-time workers, and the self-employed until late March, regardless of state unemployment rate, and extends reimbursement of unemployment benefits for state and local governmental workers, as well as nonprofit employees covered by the CARES Act. That would also expire at the later of the March 27, 2021 or a state’s unemployment rate dipping below 5.5%.
“Supercharged unemployment benefits need to be extended and tied to economic conditions on the ground,” Wyden said in an e-mailed statement. “Workers who have been laid off twice in four months should not have to worry about whether they’ll be able to pay rent come August.”
The bill sets a marker for Democratic lawmakers heading into negotiations over another coronavirus relief bill, and carries the weight of Schumer and one of the CARES Act’s lead negotiators in Wyden. But the bill itself is unlikely to become law. Talks are expected to pick up following the July 4 recess.
Republicans have expressed concern that the extra unemployment subsidy encourages workers, especially hourly workers, to stay at home while businesses attempt to re-open. Several Republicans, including Rob Portman (R-Ohio), a member of the Senate Finance Committee, have floated their own proposals to convert some of the funding for unemployment benefits into back-to-work incentives for employees in areas where public health restrictions have been loosened.
Democrats argue that uncertainty around how businesses like barbershops and restaurants will be able to operate in the immediate future necessitates an extension of the extraordinary amount of unemployment aid provided by the March emergency package.