Democratic, Administration Negotiators at Loggerheads Over $600 Jobless Benefit -- Update
By Josh Zumbrun
WASHINGTON -- Democrats and Republicans remained at odds in
weekend negotiations on a new coronavirus economic relief package,
including aid to replace the federal $600-a-week boost to
unemployment benefits that expired Friday.
House Democrats led by Speaker Nancy Pelosi want any
economic-relief package to include a long-term extension of the
enhanced unemployment benefit, arguing the extra funds have been a
critical support to those who lost their jobs amid the pandemic.
The White House and Senate Republicans, however, want to trim that
additional payment, saying in some cases people are being paid more
to stay at home than if they returned to work.
"The $600 is essential," Mrs. Pelosi said on ABC News's "This
Week." "It's essential for America's working families."
Treasury Secretary Steven Mnuchin said, also on ABC, "We
absolutely agree on enhanced unemployment. We want to fix the issue
where in some cases people are overpaid, and we want to make sure
there's the right incentives."
The Democratic-led House has passed a bill extending the $600
federal jobless benefit through January. In recent weeks,
Republicans have publicly offered to extend it for one week to make
room for negotiations, and to continue it through September at
$200, or adjust aid to a portion of lost wages.
The White House had hoped to pass a short-term extension of the
federal unemployment insurance, but Democrats have said they want
to negotiate a comprehensive package of relief, including state and
local aid, increased food-stamp benefits, and funding for schools
and testing, among others.
Mrs. Pelosi also said Sunday that in the long run, the
"enhancement for unemployment insurance should relate to the rate
of unemployment," suggesting that the $600 benefit could be wound
down but only once the economy was on firmer footing.
Under such a proposal, benefits would decline once the
unemployment rate had improved, an idea known as an "automatic
stabilizer" because it would automatically reduce spending on the
program during recovery. Some negotiators hope such an idea could
bridge the difference between the two sides.
Mrs. Pelosi and Senate Minority Leader Chuck Schumer (D., N.Y.)
met with Mr. Mnuchin and White House chief of staff Mark Meadows
for more than three hours Saturday morning, later sounding a more
positive tone after days of finger pointing over the expired
unemployment benefits. Staff meetings were set for Sunday, with
another meeting between Mrs. Pelosi and Mr. Schumer, and Messrs.
Meadows and Mnuchin to occur Monday.
"We're not close yet, but it was a productive discussion," Mr.
Schumer told reporters after the meeting Saturday, calling it "the
best discussions we've had so far."
Mr. Meadows said Sunday that Saturday's round of talks were "a
step in the right direction," but said he wasn't optimistic a deal
would emerge "in the very near term."
Mrs. Pelosi and Mr. Mnuchin also outlined other disagreements in
the relief package. Mrs. Pelosi said one priority is funds for
state and local governments, to help with their coronavirus
response and prevent a revenue shortfall from leading to widespread
layoffs of government workers, further swelling unemployment rolls.
Mr. Mnuchin said this proposal would "bail out those states that
have financial issues" and would cost more than $1 trillion.
Mr. Mnuchin cited other areas of bipartisan agreement, including
support for another round of checks that would be mailed to most
Americans and for the Paycheck Protection Program, which helped
businesses cover their payroll during the pandemic.
As of mid-July, about 17 million Americans were receiving
regular unemployment benefits, and an additional 12.4 million were
receiving unemployment benefits under a special pandemic
unemployment program that covers workers who didn't traditionally
receive the benefits.
Further underscoring the stakes, the Commerce Department said
Thursday the U.S. economy shrank by 32.9% at a seasonally- and
inflation-adjusted rate in the second quarter, or a 9.5% drop
compared with the previous quarter. The figures were the steepest
declines in more than 70 years of record-keeping.
Economic activity collapsed during the coronavirus lockdowns,
and even as economies have reopened, many consumers have been
reluctant to return to previous levels of activity as the pandemic
Despite the decline in economic activity, however, disposable
personal income actually increased in the second quarter, because
government transfers have been so large that, on balance, they more
than compensated for the lost income from job loss or business
--Michael C. Bender and Siobhan Hughes contributed to this
Write to Josh Zumbrun at Josh.Zumbrun@wsj.com
(END) Dow Jones Newswires
August 02, 2020 12:35 ET (16:35 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.