Senate Minority Leader Chuck Schumer and Sen. Ron Wyden (D-Ore.) on Wednesday introduced legislation that would tie enhanced unemployment benefits to joblessness levels in each state, the most prominent effort yet to expand federal policies that kick in automatically during a recession.
Under the bill, the additional $600 a week that jobless workers have been receiving during this economic crisis would be phased out in stages in each state as its unemployment rate drops below 11 percent.
Each percentage point drop in the rate, based on a three-month average, would correspond to a $100 decrease in enhanced weekly benefits, meaning at least some additional benefits would be available in a given state until its unemployment rate drops below 6 percent.
It would also allow Americans out of work to continue getting 13 weeks of extended benefits, provided under the CARES Act, until March 27 of next year. After that, the extension would be phased out as a state’s unemployment rate drops from 8.5 percent to 5.5 percent, with even more weeks available in states where unemployment is above 8.5 percent.
Additionally, the bill would extend unemployment benefits designed for gig workers and others who are not eligible for traditional unemployment insurance until March 2021, after which those benefits would also be tied to states’ unemployment levels.
Background: The enhanced unemployment benefits passed earlier this year in the CARES Act are set to expire at the end of July. Republicans have balked at continuing to give workers an additional $600 a week in jobless benefits, which can allow some of the unemployed to make more money than they were earning while they had a job.
Democrats such as Sen. Michael Bennet of Colorado and Rep. Don Beyer of Virginia have pushed for more policies that tie federal support to economic conditions, referred to as “automatic stabilizers.” Such policies don’t rely on Congress to agree on helping vulnerable Americans during a crisis. But they can also be more difficult to pass politically because the cost of such plans is scored by the Congressional Budget Office upfront, as opposed to a series of piecemeal extensions that would be analyzed individually.
What’s next: Congress is preparing to negotiate another round of economic relief, with the national unemployment rate at 13.3 percent in May. House Speaker Nancy Pelosi has spoken positively about automatic stabilizers, but none were included in her chamber’s latest stimulus bill.
Marianne LeVine contributed to this report.