The $600 weekly federal unemployment benefit serving as a lifeline for millions of Americans driven out of work by the ongoing coronavirus pandemic is set to expire this weekend after the Republican-controlled Senate adjourned Thursday without passing an extension.
More than 30 million people were still receiving unemployment benefits this week, according to the Department of Labor. While state unemployment systems provide around 40-45% of lost wages, the federal government stepped in to provide an additional $600 a week this spring when the pandemic forced businesses across the country to shutter. Those federal benefits expire on July 31, meaning tens of millions of Americans are about to have their income slashed by more than 60% overnight.
Senate Majority Leader Mitch McConnell, R-Ky., attempted to cut the unemployment benefit in a measure separate from the larger package being negotiated for the next phase of coronavirus relief on Thursday, but Democrats balked at both the cut and the piecemeal approach.
Republicans have argued that the benefits pay many workers more than 100% of their previous salary, making it difficult for businesses to bring back workers. But while unemployed workers are generally making more, there is scant evidence that the benefits have deterred them from returning to work, as evidenced by a small business owner who was supposed to be a star witness for Republicans at a recent hearing.
"I was very happy that no one refused to come back," he testified before the Senate earlier this month, "and everybody, when I talked to them, was in agreement and said, 'Fine, we'll see you tomorrow.'"
A study by researchers at Yale found that workers who received more in unemployment benefits than their lost wages returned to work at the same rate as those who received less than they previously earned.
Economic analyses have repeatedly shown that the boosted federal benefits have helped prop up other parts of the economy — and a cut would cost the U.S. millions of jobs.
Republicans have dealt with significant infighting after delaying negotiations for months after the House passed its $3 trillion relief bill in May. Some conservatives have refused to back any new spending, and the Republican proposal unveiled this week would slash the federal benefit to $200 per week.
With the GOP split and Democrats refusing to approve a cut, there is no sign that a deal could be reached anytime soon, leaving millions in limbo.
"I'm not very optimistic that we will have any kind of an agreement on a comprehensive bill in the near future," White House chief of staff Mark Meadows told the Associated Press on Thursday.
With the benefits expiring on Friday night, McConnell and Senate Minority Leader Chuck Schumer, D-N.Y., blamed each other for the stall.
"They won't engage — period," McConnell said on the Senate floor. "The Democrats are saying, 'My way or the highway.'"
Schumer insisted it was McConnell who "refuses to go in the room" and negotiate, according to the AP.
Democrats have largely refused to pass the urgent unemployment aid separate from the rest of the relief package in hopes of pressuring Republicans to drop their resistance to additional spending. While the House bill approved $3 trillion in aid, including a full extension of the $600-per-week benefit and $1 trillion to help cash-strapped cities and states, the Republicans proposed a $1 trillion plan that provides no new funds to local governments.
Republicans have also rejected the Democrats' push to expand food stamp aid, though their proposal included a measure that would double the "three-martini lunch" tax deduction, protect companies whose workers get sick from lawsuits and billions for military projects.
"On certain issues we made progress, on certain issues we're still very far apart," Treasury Secretary Steven Mnuchin said Thursday after a meeting with House Speaker Nancy Pelosi, D-Calif.
Top White House economic adviser Larry Kudlow recently said that an extension of the federal eviction moratorium would be included in the next bill as millions face potential homelessness after the provision already expired last week.
Some Republicans have offered short-term extensions to keep benefits flowing while negotiations continue, but Pelosi rejected the idea as "worthless."
"We just don't think they really understand the gravity of the problem," Schumer added.
Without a deal in sight, it is unclear when the two sides may move on any legislation. The Senate is expected to start its August recess at the end of next week. Any deal will take weeks to sort out.
"State offices will need weeks to reprogram their systems to account for an extension of the $600 weekly federal payments that expire on Saturday — or any changes that Congress makes to the benefit amount or eligibility rules," Politico reported, noting that laid-off workers in some states still have not received any of the federal benefits to which they were entitled.
Robert Reich, who served as the secretary of labor under former President Bill Clinton, criticized Republican Senate leaders for going on a long weekend as millions of families lose most of their income.
"Just so we're all clear," he wrote on Twitter, "more than 25,000,000 unemployed Americans are about to lose their extra unemployment benefits, and the Senate just left for a three-day weekend. Republicans have lost the right to govern."