Mon. Sep 28th, 2020

Market and Financial News Aggregator

The federal $300 unemployment benefit is set to expire. Will there be a replacement?

3 min read

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.

President Donald Trump signed a memorandum last month to provide a $300 enhanced weekly unemployment benefit to be paid on top of state benefits.

But the $44 billion allocated by Trump for the enhanced unemployment benefit, which comes from the Federal Emergency Management Agency’s (FEMA) budget, is expected to run out this month. In fact, On Wednesday, Texas became the first state to announce it had depleted the funding and will discontinue payments.

Trump opted to sign a memorandum once it became clear Congress wouldn’t reach a deal to replace the $600 enhanced benefit—which expired the week ending July 25. However, it may be harder—or legally impossible—for him to do so again.

As the $300 benefit nears expiration, Fortune compiled all the proposals for extending an enhanced unemployment benefit.

House Democrats want $600 per week

The $3 trillion Heroes Act passed by House Democrats in May would’ve extended the $600 weekly benefit into January 2021. However, that bill did not move forward in the Republican controlled Senate.

Democratic leaders stand by that proposal to bring back the weekly $600 enhanced unemployment benefit—which stretched from late March to late July.

But Democrats insistence that the unemployment benefit go back up to $600 isn’t what is holding up another stimulus package. Instead, it’s the fact the two parties are still $900 billion apart on the next broad stimulus bill: the Democrats are at $2.2 trillion, and the White House is at $1.3 trillion.

It’s unclear by what amount Democrats would be willing to reduce the enhanced unemployment benefit, or their offer for a broad stimulus bill, in order to get a bipartisan bill passed.

Senate Republicans want $300 per week

On Thursday, the Republican-proposed stimulus package failed to get enough votes to advance in the chamber. The stimulus package received 52 votes in favor, all from Republicans. The bill needed 60 votes in favor to move forward.

That stimulus bill would have extended $300 weekly enhanced unemployment benefits through the end of the year. And that proposal had support from the White House.

Senate Democrats said the $500 billion stimulus package was too small to properly boost the economy and control the virus.

Another extension from the White House?

Trump issued the $300 weekly enhanced unemployment benefit by pulling $44 billion in funding from FEMA that was set aside from the CARES Act. The president has suggested he may pull more unused stimulus funds to pay for another extension.

“We have $300 billion in an account that we didn’t use…I would be willing to release it—subject to Congress—and use that as stimulus money and it would go right to the American people,” Trump said earlier this month.

However, it’s unlikely Trump could legally use that money by simply issuing an executive order or memorandum. These funds, unlike the FEMA disaster aid, weren’t designated for direct aid to Americans.

Will the a deal get done?

For much of the summer another broad stimulus bill and an extension of enhanced unemployment benefits, looked like a sure thing. But with the economy improving faster than expected and politicians unwilling to comprise, the odds of another bill are declining.

The consensus on Capitol Hill is nothing will get signed before the end of September—when U.S. lawmakers are required to approve more federal funding to stave off a government shutdown.

More must-read finance coverage from Fortune:

  • A blockbuster IPO briefly made a bottled water entrepreneur China’s richest man
  • Book recommendations from Fortune’s 40 under 40 in finance
  • Commentary: Why the Democratic Party must make a clean break with Wall Street
  • ADP, the biggest U.S. payroll service, won’t implement Trump’s “tax holiday” for some clients
  • Fortune’s 2020 40 Under 40

Lance Lambert


2020-09-14 11:06:09


Read more from source here…

Leave a Reply