Unemployment payments could be delayed for up to 20 weeks under GOP proposal

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TOPLINE

A proposal from the White House and some Republicans that would tie unemployment benefits to around 70% of a worker’s previous salary in an upcoming coronavirus stimulus bill could delay jobless benefits for up to 20 weeks, according to a new memo reported by NPR, leaving around 25 million Americans counting on payments with a drastic pay cut for a long time.

HIGHLIGHTS

$ 600 of expanded unemployment payments expired Saturday in 49 states and will end Sunday in New York.

A GOP proposal calls for tied payments to 70% of a person’s lost wages, which is much more difficult for states to calculate than a flat rate.

In a memo sent to lawmakers, the National Association of State Workforce Agencies said it would take most states eight to 20 weeks to switch to a system that pays unemployed Americans on a sliding scale.

The group said it would prefer Congress to maintain a lump sum payment, but if it decides to switch to sliding-scale benefits, it should set the effective date “in the future with sufficient time to programming. “

During negotiations over the first round of relief in March, Congress considered tying benefits to a worker’s previous earnings, but dropped the idea after Labor Secretary Eugene Scalia raised concerns about the capacity of state unemployment systems to process these claims.

Crucial quote

In May, the Department of Labor told Congress it was “strongly opposed” to linking unemployment benefits to past wages because states would find it “extremely difficult, if not impossible to implement,” a document said. obtained by NPR.

To monitor

At an event in Ashland, Kentucky on Friday, Senatorial Majority Leader Mitch McConnell suggested that Congress could take “a few weeks” to pass a stimulus bill.

Key context

In the $ 2 trillion stimulus bill passed by Congress in March, lawmakers included a $ 600 general increase in state unemployment payments. Lawmakers opted for the $ 600 because, added to the average unemployment payment in 2019 ($ 371.88), it is equivalent to almost 100% of an American worker’s average weekly wage of $ 933, according to the figures. from the Bureau of Labor Statistics.

Surprising fact

Cutting jobless benefits from $ 600 per week to $ 200 per week would result in 3.4 million fewer jobs being created over the next year, according to a study by the Economic Policy Institute.

Further reading

National unemployment agencies could take months to adjust to WH’s proposal, Memos Show (NPR)

A $ 600 unemployment check is likely to be reduced – but the GOP cannot decide on the amount (Forbes)

Unemployment checks could drop below $ 200 under GOP stimulus plan (Forbes)

McConnell says the stimulus deal could take “a few weeks,” putting millions of people whose unemployment aid was expiring into limbo (Washington Post)

Eviction bans, $ 600 unemployment benefits, and suspension of student loans: here’s when the main benefits of the CARES Act expire (Forbes)

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