Republicans Consider Short-Term Extension of Pandemic Unemployment Aid

Hundreds of unemployed Kentucky residents wait in long lines outside the Kentucky Career Center on June 19, 2020 in Frankfort, Ky. John Sommers II/Getty Images

Sen. Lamar Alexander (R-Tenn.) said Wednesday that Senate Republicans and negotiators from the Trump administration are considering a possible short-term unemployment insurance extension as hopes fade for a broader bipartisan agreement on a new stimulus package before the pandemic-related jobless benefits run out.

“We’re discussing that,” Alexander told Bloomberg News reporter Laura Litvan on Capitol Hill. Known as the Federal Pandemic Unemployment Compensation (FPUC) program, this is the additional federal benefit of $600 per week over and above regular and state unemployment insurance payments and other forms of pandemic unemployment assistance. Established by the $2.2 trillion CARES Act, the FPUC benefit is set to expire by July 31.

Democrats want the $600 benefit extended through January 2021, while Republicans fear it will make economic recovery less robust.

“Most of us agree that there needs to be something in its place, and most of us also agree that the $600 flat amount for every worker is not a good idea going forward because it’s a disincentive to get back to work,” Sen. Rob Portman (R-Ohio) told Bloomberg Television in an interview Wednesday.

Sen. Ted Cruz (R-Texas), in an interview with The Hill on Wednesday, said it was a bad idea to design an unemployment benefit in a way that pays some people more money to stay home than they would receive on the job.

“One of the worst aspects of what Congress has done so far is the plus-up in unemployment compensation. We are paying a whole lot of people a lot more money to stay home and not work than they made on their jobs—and that is terrible for those workers, it’s terrible for the economy,” Cruz said.

House Majority Leader Steny Hoyer (D-Md.) told Bloomberg on Wednesday he was tepid on the Republican idea of a short-term extension of the $600 FPUC benefit.

”I would prefer to reach agreement on a comprehensive response to the crisis, including an extension of unemployment assistance; state, local and tribal government assistance; and other priorities,” he said.

While Democrats and Republicans are sure to butt heads over the FPUC, the final stimulus bill is almost certain to contain aid to schools and universities, more subsidies for small businesses, and another round of $1,200 of direct payments to American families.

The Democrat-led House passed a whopping $3.5 trillion COVID-19 response bill more than two months ago, re-upping the $600 per week FPUC, providing another round of $1,200 payments to most people, and earmarking nearly $1 trillion for cash-starved states and local governments.

The GOP’s $1 trillion-plus response, which Senate Republicans and members of the Trump administration are putting the final touches on, will feature a sweeping liability shield for schools, businesses, and charities that are trying to reopen. Business tax breaks are also on the agenda, as is a payroll tax cut, which President Donald Trump has pushed for strongly.

The pandemic has ravaged the economy and upended labor markets, with 32 million Americans currently receiving some form of unemployment benefits, according to Labor Department data published last week.