MNI POLICY: US Jobless Benefits Lapse as Fiscal Talks Stall

The extra USD600 a week in unemployment benefits provided by the federal government to Americans amid the coronavirus pandemic is expected to expire after Friday as Washington lawmakers struggle to agree upon the next stimulus package.

The cancellation in benefits will amount to a USD19 billion per week hit to the economy, according to a Minneapolis Fed study. About 17 million Americans are currently receiving the extra jobless payments while the number of first-time filers for unemployment benefits rose for a second straight week Thursday by 12,000 to 1.434 million as cases rise.

Until a deal is reached in Congress, jobless Americans will go back to receiving payments that vary from state to state and average USD387 per week, according to the Brookings Institution. Even if Congress did pass a short-term extension, there could be a gap of a few weeks until unemployed workers receive the added benefit due to outdated computer systems, experts say.

PIECEMEAL PROPOSALS FAIL

Before the Senate adjourned for the weekend Thursday, it rejected stand-alone piecemeal proposals, including a one-week extension of the enhanced unemployment benefit. A second proposal would have allowed states to choose either immediate 80% wage replacement or a plan starting at USD500 per week in August before declining USD100 each month through October.

Both proposals fell flat Thursday in negotiations with Democrats. Sixty votes are needed in the Senate to pass a bill, including any short-term proposal, before seeking House approval.

Top White House negotiators, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows, and the top Democratic negotiators, House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer, are expected to speak by phone Friday and through the weekend.

REPUBLICAN DIVIDE

Republicans continue to be divided over a stimulus bill. Senate Majority Leader Mitch McConnell has noted that 20 Republican senators in his caucus oppose any plan over a trillion dollars, including the Republican Senate proposal unveiled Monday.

McConnell has not been in the room with negotiators but has insisted that legal liability protection for doctors, hospitals, nurses and other businesses are "absolutely essential" in the final bill. But the White House has downplayed the request in talks with Democrats.

Asked if the administration would insist on a liability shield, White House spokesperson Kayleigh McEnany said: "This president is very keenly focused on unemployment insurance."