$600 benefit for unemployed workers would be reduced but not ended under new Trump plan
California’s unemployed workers could continue to get some but not all of the $600 weekly benefit they now receive under a plan the Trump administration proposed Thursday.
Treasury Secretary Steven Mnuchin told CNBC that a Republican plan would include a “70% wage replacement” for the benefit that millions have been receiving since March and is about to end.
Previous estimates have found that 70% replacement could mean the extra benefit would shrink to about $200 per week, but no details have been offered.
Mnuchin reiterated the argument that many Republicans have been making for weeks.
“We’re not going to pay people more money to stay at home than work. We want to make sure the people who are out there that can’t find jobs do get a reasonable wage replacement,” he said. “It will be based on approximately 70% wage replacement.”
A May University of Chicago study reported that construction workers and retail, sales and food service workers, as well as medical assistants and janitors often were getting more in unemployment money than they made while on the job.
But the California Policy Lab has found that in the state, the $600 has been an important factor in keeping people out of poverty. Its study found that about 1.75 million beneficiaries would have fallen below the federal poverty level if not for the $600.
A total of approximately average of 4.29 million California residents per week have been receiving the $600 payments with their regular unemployment insurance or Pandemic Unemployment Assistance benefits over the last four week period ending July 11.
Munchkin did not elaborate on the plan. The administration has suggested an extra $100 to $200 a week.
Democrats have pushed for continuing the $600 a week in some form. Senate Democratic leaders would tie the benefit to a state’s unemployment rate; the lower the rate goes, the lower the benefit.
This much is clear: There will be some sort of fix to the $600. This is the last week in most states that unemployed workers can receive the benefit, created in March to help jobless workers during the coronavirus pandemic.
Republicans tried to stop the payment entirely in March, but softened their position this week as unemployment remained high.
Thursday, the Labor Department reported that 1.4 million people filed new claims for unemployment benefits, up slightly from last week.
And in state after state, jobless rates remain high. California’s rate was 14.9% in April, down from 16.4% last month.
While the administration is backing some replacement wage plan, it has dropped the idea of a payroll tax cut. There was little congressional support, as lawmakers noted that people out of work would be paying Social Security and Medicare taxes anyway.
“The president’s very focused on getting money quickly to workers right now and the payroll tax takes time, so we’ll come back and look at that,” Mnuchin told reporters Thursday.
This story was originally published July 23, 2020 at 7:12 AM with the headline "$600 benefit for unemployed workers would be reduced but not ended under new Trump plan."
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