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'Unconscionable': As Unemployment Claims Tick Upward, GOP Seeks to Gut $600 Weekly Benefit

"A disaster of Congress' making is looming for those who have lost their livelihoods during the global pandemic."

Red sign hanging at the glass door of a shop saying "Closed due to coronavirus." (Image: Getty Images)

As U.S. lawmakers debate the details of extending or cutting federal unemployment benefits that have helped Americans weather the Covid-19 pandemic, jobless numbers rose for the first time in three months last week as millions remain out of work.

"Congress needs to act immediately," Economic Policy Institute (EPI) director of policy Heidi Shierholz wrote Thursday of the need for an extension of the $600 unemployment benefit. "If they let the extra payments expire and then reinstate them, it will be a needless administrative nightmare for state agencies, and recipients—who will face a lapse in benefits several weeks in most states—will pay the price."

Thursday's unemployment numbers hit 2.3 million, Shierholz wrote, once you combine the 1.4 million regular unemployment claims with the number of claimants for the Pandemic Unemployment Assistance (PUA) program passed as part of the CARES Act economic stimulus. 

The economic crisis is nowhere near over, she added, and without swift action from lawmakers on benefit extensions things could get far worse.

"A disaster of Congress' making is looming for those who have lost their livelihoods during the global pandemic," wrote Shierholz.

As Common Dreams reported, GOP leaders have suggested replacing the $600 weekly benefit with a $100 weekly payment, a move that EPI researcher Josh Bivens called "both cruel and stupid."

In a statement, Andrew Stettner, senior fellow at The Century Foundation, said that in light of Thursday's numbers, "not extending the weekly $600 benefit supplement would be unconscionable."

"When Congress put into place the CARES Act benefits, 8.2 million workers were collecting unemployment. Taking into account the 13 million claims for PUA (which will continue through December 31), there are a total of 33.8 million workers filing for unemployment this week," Stettner said. "Given these realities, it's preposterous that Senate leaders are floating a $100 weekly supplement at a time when there is no end in sight to economic distress."

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Treasury Secretary Steve Mnuchin on Thursday told CNBC that the administration and Senate Republicans were close to a deal that would keep the benefit at what the Washington Post estimated would be around $200 with a 70% wage replacement. 

"We're not going to continue in its current form because we're not going to pay people more money to stay at home than work," the secretary said. "We want to make sure that the people out there who can't find jobs do get a reasonable wage replacement—so it will be based on approximately 70 percent wage replacement."

House Majority Leader Rep. Steny Hoyer (D-Md.) followed Mnuchin on the network and said that ending the benefit was not "the policy we ought to pursue," adding that any drop in the unemployment help should be done "over time" if at all. 

"At this stage, you're seeing all the wrong elements for recovery," Gregory Daco, chief United States economist at analyst firm Oxford Economics, told the New York Times. "A deteriorating health situation, a weakening labor market, and a softening path for demand."

In a statement, Groundwork Collaborative executive director Michael Linden noted the economic damage that ending the benefit would cause and called on Congress to act quickly to extend the payments. 

"Not only would it be morally reprehensible for President Trump and his conservative allies to cut the income of 30 million families during a pandemic, it would also be devastating for an economy that is already severely damaged and heading in the wrong direction," said Linden.

"Congress must move quickly to do the right thing for families and the economy and extend these expanded benefits until this crisis is finally truly over," he added.

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