By the end of July, many government benefits from the first stimulus package will expire. Among them is the weekly $600 unemployment benefit. This comes as the economy shows signs of weakness resulting from the COVID-19 spread in the south. Continued payments are needed to maintain consumer spending and to prop up the economy.
Today Republican leaders will unveil their version of a second stimulus proposal. Reports say the package will repeat the $1,200 payment to most Americans. However, it will replace the $600 weekly unemployment payment with a number equal to 70% of the worker’s former wage. Which suggests that some would not go back to work.
In total, the new stimulus package is expected to cost $1 trillion – an amount on target with the Trump administration’s stated limit.
Importantly, top Democrats Chuck Schumer and Nancy Pelosi have expressed disagreement with the unemployment benefit proposal. According to Schumer, “We should not give a 30 percent pay cut to those who lost their jobs through no fault of their own. The unemployment insurance has kept millions out of poverty, prevented the recession from becoming a depression, we need to extend it.”
At this time, it is unclear whether the two sides can come to agreement on the proposals. In situations like this, ideology and the need to act quickly are often in conflict.