On Friday, supplemental unemployment benefits of $600 a week are set to expire. With unemployment still high, ended benefits will devastate millions, which will ripple through the economy. In the Senate, Republicans are divided among themselves and they have clashed with Democrats over the cost of the benefits. As a result, the Senate has stalled.
On Thursday, Republicans gave up their effort to convince Democrats of their second aid package. Instead, the GOP tried to make a deal that covered just unemployment benefits. Sen. Ron Johnson (R-Wis.) proposed that federal unemployment payments be capped at 66 percent of lost wages. Democrats countered saying the idea was insufficient to deal with the crisis.
“We had a long discussion,” Senate Minority Leader Chuck Schumer told reporters Thursday night. “And we just don’t think they understand the gravity of the problem. The bottom line is this is the most serious health problem and economic problem we’ve had in … 75 years, and it takes really good strong bold action, and they don’t quite get that.”
Republicans are concerned that the $600 weekly benefit pays better than many low income jobs. They argue that as long as the benefits continue, people will avoid work and the economy will continue to suffer. “Both Republicans and Democrats agree that in these extraordinary times it makes sense for the federal government to provide historic additional help on top of normal unemployment,” McConnell said. “But the speaker and the Democratic leader say they won’t agree to anything unless the program pays people more to stay home than to work.”
On Thursday morning, a second week of increased jobless claims was recorded, indicating a weakening job market. Unfortunately, if unemployment remains high and benefits expire, consumer activity will slow and homelessness will follow.