Unemployment Payments Could Be Delayed Up To 20 Weeks Under GOP Proposal
TOPLINE
A proposal floated by the White House and some Republicans that would tie unemployment payouts to roughly 70% of a worker’s previous wage in a next coronavirus stimulus bill could delay jobless benefits by up to 20 weeks, a new memo reported by NPR shows, leaving around 25 million Americans relying on the payments with a drastic pay cut for a lengthy period of time.
UNITED STATES – JULY 23: White House Chief of Staff Mark Meadows, left, and Treasury Secretary … [+]
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KEY FACTS
$600 in expanded unemployment payouts expired in 49 states on Saturday, and will end in New York on Sunday.
One GOP proposal calls for tying the payouts to 70% of a person’s lost wages, which is much harder for states to calculate than a flat rate.
In a memo sent to lawmakers, the National Association of State Workforce Agencies said it would take most states eight to 20 weeks to transition to a system that paid unemployed Americans on a sliding scale.
The group said it preferred that Congress would maintain a flat rate payout, but if it decides to switch to sliding scale benefits, it should set the effective date “in the future with sufficient time for programming.”
During negotiations over the first round of relief in March, Congress considered tying benefits to a worker’s previous prior income but scrapped the idea after Labor Secretary Eugene Scalia raised concerns about the ability of state unemployment systems handling such requests.
Crucial quote
In May, the Department of Labor told Congress it “strongly” opposed tying jobless benefits to previous wages because states would find it “exceedingly difficult if not impossible to implement,” according to a document obtained by NPR.
What to watch for
At an event in Ashland, Kentucky on Friday, Sen. Majority Leader Mitch McConnell suggested it could take “a few weeks” for Congress to pass a stimulus bill.
Key background
In the $2 trillion stimulus bill Congress passed in March, lawmakers included $600 across-the-board increase to state unemployment payouts. Lawmakers settled on the $600 sum because, when added to the average unemployment payout in 2019 ($371.88) it equates to almost 100% of an average American worker per week wage of $933, according figures from the Bureau of Labor Statistics.
Surprising fact
Slashing jobless benefits from $600 per week to $200 per week would lead to 3.4 million fewer jobs created over the next year, a study conducted by the Economic Policy Institute found.
Further reading
State Unemployment Agencies Could Take Months To Adapt To WH Proposal, Memos Show (NPR)
$600 Unemployment Check Likely To Be Slashed—But GOP Can’t Decide How Much (Forbes)
Unemployment Checks Could Drop Below $200 Under GOP Stimulus Plan (Forbes)
McConnell says stimulus deal could take ‘a few weeks,’ putting millions with expiring jobless aid in limbo (Washington Post)
Eviction Bans, $600 Unemployment Payments, And Student Loan Forbearance: Here’s When The Key Benefits Of The CARES Act Expire (Forbes)
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