Senate Majority Leader Mitch McConnell (R-KY) reportedly told House Republicans in a conference call on Wednesday that the temporary unemployment insurance policy, which pays an additional $600 per week in benefits to people out of work, will not be extended past its original end date.
A person “briefed on the call” told Politico that McConnell took a firm stance against extending the payment boost during the conference call. Furthermore, the news agency reports the senate majority leader as saying the GOP would “clean up the Democrats’ crazy policy that is paying people more to remain unemployed than they would earn if they went back to work.”
During a private lunch on Tuesday, President Trump also suggested he was against extending the unemployment benefits boost, per “three officials familiar with the remarks” who spoke to The Washington Post.
While the payment boost has drawn fierce criticism from some Republicans lawmakers, the news agency notes that it isn’t clear whether Trump will veto any legislation that extends it. However, Politico reports that, for now, McConnell wants to hold off on additional coronavirus relief spending, given the recent spending.
According to a working paper from The University of Chicago, two-thirds of workers eligible for unemployment insurance “can receive benefits which exceed lost earnings and one-fifth can receive benefits at least double lost earnings.”
The working paper notes:
The current expanded UI system enacted under CARES implies high replacement rates well over 100% for most workers. High replacement rates can provide crucial liquidity necessary for households to smooth consumption during this unprecedented period of economic dislocation. Notably, replacement rates under the CARES Act are highest for the unemployed with the lowest prior earnings who are likely most vulnerable. At the same time, replacement rates over 100% create distributional issues and may hamper efficient labor reallocation both now, and especially during an eventual recovery.
According to NBC News, House Democrats have vowed to continue the policy, which is set to expire at the end of July, until next January.
As The Daily Wire previously reported, several Republican lawmakers threatened to prevent the stimulus package from fast-tracking through the Senate precisely because of the wording in the unemployment provision.
“My goal was to add some federal dollars to the pot, to get you back to what you were making with a cap of $600,” said Senator Lindsey Graham (R-SC), one of three GOP senators who spoke out against the provision. “This bill pays you more not to work than if you were working.”
“If this is not a drafting error, then it’s the worst idea I’ve seen in a long time, and that’s saying a lot given that we’re in Washington,” he said.
After Graham spoke out against the provision, a Republican spokesperson with the Senate Finance Committee disputed the layoff claims, saying it was “just the opposite” of a layoff incentive.
“Each state has a different UI program, so the drafters opted for a temporary across-the-board UI boost of $600 dollars, which can deliver needed aid in a timely manner rather than burning time to create a different administrative regime for each state,” said the spokesperson. “This increase is designed to make the average worker whole. It’s also important to remember that nobody who voluntarily leaves an available job is eligible for UI.”
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