Forty Democrats sent President Joe Biden a letter asking him to include more generous and long-lasting unemployment benefits in a brand new “anti-poverty” bill that the administration is expected to roll out next week.
The radicals want Biden to propose a massive overhaul of the unemployment insurance system by mandating new federal standards in programs that are now basically run by states. They propose increasing the amount of jobless payments, extending the duration of the weekly benefit, expanding eligibility requirements, and creating a system that would more closely tie the payments to economic conditions.
“The Cares Act’s emergency programs must be extended to support jobless workers for the duration of the current economic downturn, but we must also fix the underlying problems facing our [unemployment insurance] system so that it can provide economic security for all workers,” they wrote in the letter, Wall Street Journal reported. The $2.2 trillion CARES Act was the first COVID-19 aid bill signed by President Donald Trump a year ago.
There is a great need for states to upgrade their unemployment benefits systems. During this last recession, hackers and thieves had a field day collecting on fraudulent claims. Trump also pointed to the need for upgrading state computer systems. Some states like California saw their unemployment claims system collapse.
Republicans have argued that large payments distort the labor market by offering people more money than they could make at work, and some Democrats have expressed concerns about the proper size of supplemental checks. The level of the payments was a sticking point in the latest round of aid, with the $400 a week proposed by House Democrats reduced to $300 a week in the Senate.
That $300 a week was in addition to state unemployment benefits, giving many workers a larger weekly paycheck than they had gotten while working.
The consequences of such a policy are obvious. The Wall Street Journal points out that the Covid relief makes finding help for business owners next to impossible.
Lots of entrepreneurs are overworked these days. The National Federation of Independent Business surveyed more than 500 small businesses and reported last week that 42% of them had job openings they couldn’t fill. “As long as we’ve been conducting the survey, it’s never been that high,” says Holly Wade, executive director of NFIB’s research center. Some 7.4 million jobs were open at the end of February, according to an April 6 report by the Bureau of Labor Statistics.
Some workers are staying home because they fear contracting the virus. Others are parents whose children are still stuck at home waiting for schools to open full time.
But there is little doubt that the vast majority of workers are choosing not to work because they can collect as much or more in unemployment benefits as they were taking home while working.
Between the Democratic demands and Republican opposition to aggressively expanding social-welfare programs, the antipoverty plan will be a challenge for the Biden administration to shepherd through Capitol Hill. Lawmakers are also considering Mr. Biden’s $2.3 trillion infrastructure plan, which Democrats could ultimately combine with the antipoverty proposal. Narrow control of the House and Senate allows Democrats to pass legislation without GOP support, albeit through a process that only allows provisions related to the budget.
They can cram as much as they want into these bills as long as the Senate parliamentarian says that a particular provision adheres to the “Byrd Rule” for reconciliation bills.
But only 40 Democrats signed on to this radical overhaul of unemployment insurance. It may die an ignoble death in committee before anyone has a chance to vote on it.
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