Senate GOP proposes cutting unemployment benefits in coronavirus relief plan

Senate Republicans are proposing to reduce the expanded $600 weekly unemployment benefit as part of their forthcoming coronavirus relief plan.  

The GOP proposal, according to Treasury Secretary Steven Mnuchin, will transition to payments equal to roughly 70 percent of an individual’s previous wages.

But states and GOP lawmakers have warned that it could take weeks, if not months, to be able to switch to unemployment benefits that would be scalable based on a person’s wage. Negotiators had discussed doing something similar during the March negotiations but were told by the Labor Department that because of archaic technology it was not possible. 

Mnuchin told reporters that the GOP proposal will provide a “bridge” as states transition to the new system.  

The plan will provide one additional $600 per week payment. It would then provide $200 per week to give states time to transition to the wage match, according to a summary from Senate Finance Committee Chairman Chuck Grassley’s (R-Iowa) office.

After that states would have to transition to tying the unemployment benefit to a previous wage, with the payment being up to $500 per week. The state benefit, combined with the scalable federal assistance, would match 70 percent of a previous income.

Asked about proposing $200 per week while states are transitioning, White House economic adviser Larry Kudlow noted that he had talked to Mnuchin, but that conversations were ongoing.

“These are technical adjustments to the formulas. I don’t want to predict. They’re in final discussions as we talk,” Kudlow said.

Spokespeople for Senate Majority Leader Mitch McConnell (R-Ky.) did not immediately respond to a question about the unemployment language. Mnuchin and White House chief of staff Mark Meadows were meeting with McConnell’s staff on Saturday and Sunday to discuss the language and try to finalize the overall bill. 

Democrats are pouncing on reports that Republicans will propose cutting the weekly unemployment benefit while states transition to a wage-based unemployment benefit.  

“The White House is once again showing that it has zero understanding of the desperation of unemployed Americans. My message to Republicans is this: if you think $200 a week is enough to live on, you try it first,” Sen. Ron Wyden (D-Ore.) tweeted on Monday. 

Michael Zona, a spokesman for Grassley, declined to discuss details of the bill before its release.

Zona, in a separate tweet, also said it would be “generous” to call Wyden’s tweet misleading.  

“A federal benefit of $200/week would be *in addition to* hundreds in state benefits. No unemployed American is being asked to live on $200 a week. In 2009, under Obama & a fully Democratic Congress, extra federal benefits were ~$25/week,” he said.

To call this misleading would be generous. A federal benefit of $200/week would be *in addition to* hundreds in state benefits. No unemployed American is being asked to live on $200 a week. In 2009, under Obama & a fully Democratic Congress, extra federal benefits were ~$25/week~ https://t.co/ySOijTfXAF

— Michael Zona (@mjzona) July 27, 2020

—Updated at 5:18 p.m.