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On Monday Senate Republicans rolled out their plan to reduce the unemployment benefit bonus—which is paid on top of state benefits—from $600 to $200 per week for the next two months. After that period, the benefit would transition into covering 70% of the unemployed persons’ previous income through the end of the year.
But Democrats aren’t onboard with reducing the benefit by that amount. And on Wednesday the negotiations on the next stimulus bill, which include the enhanced unemployment benefits, hit a partisan wall.
“We’re nowhere close to a deal … It means enhanced unemployment insurance provisions will expire,” said White House Chief of Staff Mark Meadows after an unproductive Wednesday meeting with Democratic Senate and House leaders.
That means that the 31.4 million jobless Americans who are currently receiving the enhanced benefit will go without the $600 benefit this week. The final $600 weekly federal unemployment benefit was for the week ending July 25.
And there is no guarantee the $600 will get replaced. “No deal certainly becomes a greater possibility the longer these negotiations take,” Meadows said Wednesday.
Economists have told Coins2Day that allowing the $600 benefit to completely phase-out without a replacement could pull the economy back into a recession. The reason? The benefit was paying out around $50 billion per month to households, which prevented deeper contractions in consumer spending—something that makes up two-thirds of the U.S. Economy.
Democrats have reassured unemployed Americans this week that they would not support cutting the weekly benefit from $600 to $200. The Heroes Act passed by House Democrats would’ve extended the $600 weekly benefit into January 2021. It’s unclear by what amount Democrats would be willing to reduce the benefit.
Americans receiving the $600 weekly benefit include the 17.3 million Americans on state unemployment rolls. But there are also 13.2 million getting it through Pandemic Unemployment Assistance
benefits, and the 940,113 on Pandemic Emergency Unemployment Compensation. In all 31.4 million Americans were receiving the $600 bonus before it expired.
