Trump Administration officials issue an ultimatum for reduced unemployment benefits for millions of Americans thrown out of work by the Coronavirus pandemic.
And even the lower benefits will not be extended until Congress agrees to White House conditions such as lawsuit protections for businesses.
Benefits of $600/week for the newly-unemployed expire this week. On Sunday,Treasury Secretary Steven Mnuchin, White House Chief of Staff Mark Meadows, and top economic advisor Larry Kudlow used political talk shows to make their demands.
More than 51 million Americans have filed unemployment applications since mid-March. The previous weekly record for applications was 685,000 in October 1982.
The White House’s line was issued as US deaths reached 146,935. Confirmed cases are 4,234,020, a rise of 55,993 in 24 hours. The rate of infection continues to increase in 40 of 50 states.
A Belated, Piecemeal Approach
The White House took little action for weeks over a new stimulus bill as the end of the benefits, approved in March, approached. There was further delay as Donald Trump insisted on a payroll tax cut, a demand repeatedly rejected by Senate Republicans.
The Administration relied on its hope for a recovery from a “reopening” demanded by Trump. The unemployment rate fell to “only” 11.1% in June, although the real rate is far higher with millions of Americans dropping out of the job market.
But the record-setting surge in Coronavirus has pushed some Governors, even Trump allies, to suspend further lifting of restrictions and to reimpose some measures.
House Democrats passed a $3 trillion bill in May to extend the $600 weekly payments through January, buy the White House and Senate Republicans, who envisage only $1 trillion, still have not presented a plan.
Chief of Staff Meadows rolled out the piecemeal approach, with the insistence on protection of businesses from lawsuits, yesterday:
Honestly I see us being able to provide unemployment insurance, maybe a retention credit to keep people from being displaced or brought back into the workplace, helping with our schools — if we can do that along with liability protections perhaps we put that forward, get that passed as we negotiate on the rest of the bill in the weeks to come.
Treasury Secretary Mnuchin added: “We could look at doing an entire deal; we could also look at doing parts….If there are issues that take longer, we’ll deal with those as well.”
Americans receiveing unemployment benefits ARE tax payers
& the $$ they receive from the govt IS taxed like ordinary income https://t.co/uBtSt20S2P
— Stephanie Ruhle (@SRuhle) July 26, 2020
Economic advisor Kudlow flagged the reduction in unemployment benefits, declaring that it is a disincentive to return to work.
The White House is signalling a formula amounting to 70% wage replacement, but some economist say the actual benefit will fall to $200 per week. Mnuchin suggested that the payment will vary depending on a beneficiary’s earnings before losing a job.
Kudlow rejected the notion of hardship caused by the reduced benefit, saying 70% wage replacement “quite generous by any standard”.
He maintained the illusion that the economy is “going north” rather than “going south”.
Disarray and Suffering
Democrats immediately pushed back the belated ultimatum.
House Speaker Nancy Pelosi said, “We’ve been anxious to negotiate for two months and 10 days when we put forward our proposal. [The White House is] in disarray and that delay is causing suffering for America’s families.”
She would not say if a benefit lower than $600 per week can be accepted, “You don’t go into a negotiation with a red line. But you do go in with your values.”
But Pelosi rebuffed the demand for business protection from lawsuits, saying it will remove the obligation from companies to protect employees from Coronavirus:
What they’re saying to essential workers, ‘You have to go to work because you’re essential. We place no responsibility on your employer to make that workplace safe and if you get sick you have no recourse.
Meanwhile, Trump friend Sen. Lindsey Graham indicated there will no extension of any benefits or any other mitigation for the effects of the virus: “Half the Republicans are going to vote ‘no’ to any” stimulus package. That’s just a fact.”