- Congress is at a dead end due to the increase in unemployment benefits, and Republicans are under immense pressure to prevent them from falling into disrepair on Friday.
- Democrats attacked the GOP because they started debating at the eleventh hour about a replacement for the weekly benefits of $ 600.
- Millions of unemployed are facing income declines of between 50% and 75% before Congress puts another additional payment in its place.
- You can find more stories on the Business Insider homepage.
The $ 600 supplement to state unemployment control officially expires on Friday – and Congress is still debating its replacement as unemployment remains high and jobs are scarce.
Republicans and the Trump administration are under immense pressure to maintain a government lifeline for the unemployed.
Senate majority leader Mitch McConnell attempted to legislate on Thursday through a so-called "shell bill." This step enables the Chamber to quickly respond to a short-term continuation of unemployment benefits when a plan has received enough support but no consensus on a plan appeared to be close. The chamber was adjourned for the weekend.
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Wisconsin Senator Ron Johnson made a proposal on Thursday to extend weekly bulk payments to $ 200 instead of the $ 600 a week Congress approved in March. This would allow states to opt for a two-thirds wage replacement system that is slightly lower than what the Republicans revealed in their stimulus package on Monday – four days before the $ 600 payments officially expired.
But the Democrats quickly rejected the step-by-step approach and attacked the Republicans because they had waited until the eleventh hour to debate the expansion of expanded unemployment insurance.
"It is too late because even if we passed this measure, almost every state would say that people would not be unemployed for weeks or months. All because of the disagreement and dysfunction of the Republican caucus," said Chuck Schumer, chairman of the Senate minority.
Democrats are trying to adopt a broader spending package and support the extension of disbursements from $ 600 to January. This is an integral part of a $ 3 trillion economic aid law passed by the democratically run house in May. The GOP never voted on it in the Senate.
However, a deal is not in sight, Treasury Secretary Steven Mnuchin said late Thursday after meeting with Schumer, House Speaker Nancy Pelosi and White House chief of staff Mark Meadows.
"We have made progress on certain issues. We are still very far apart," said Mnuchin. "We made a proposal for a short-term deal and so far they have repeated that they don't want that."
The Trump administration said it could support a one-week extension of the $ 600 benefit, but the Democrats rejected it as insufficient.
Even though Congress is at a dead end, the last $ 600 payments were made to the unemployed last weekend, meaning that millions of unemployed will receive their first reduced benefit checks in the coming days.
According to Erncore Tedeschi, political economist at Evercore ISI, they face income losses of between 50% and 75%, depending on the level of their government benefits.
Many economists attribute the government benefits of $ 600 to keeping people afloat and improving household purchasing power during a recession. They say a sudden reduction in these payments would force families to tighten their finances in a volatile time and damage the economy as a whole.
"All of these difficult decisions that you didn't have to make before because you have unemployment insurance, you have to make now," Tedeschi told Business Insider recently. "How: & # 39; Do I pay rent? Do I reduce groceries? Do I skip a doctor's appointment? & # 39; That will go very deeply into the family budget."