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McConnell vows to slash unemployment as virus forces businesses to close again

The Senate Majority Leader says he’s worried people might not go back to work during a pandemic if they continue receiving the current level of unemployment benefits.

By Josh Israel - July 01, 2020
Sen. Mitch McConnell (R-KY)

As more and more businesses close again due to coronavirus case spikes, Senate Majority Mitch McConnell wants to reduce unemployment benefits. His reasoning: If temporarily unemployed workers get too much in unemployment benefits, they might not return to their jobs.

McConnell (R-KY) said Tuesday that the Republican majority in the Senate would not continue an emergency pandemic benefit that provides a $600 weekly federal supplement to unemployment insurance. The program is set to expire on July 31.

“Unemployment is extremely important. And we need to make sure, for those who are not able to recover their jobs, unemployment is adequate,” he told reporters. “That is a different issue from whether we ought to pay people a bonus not to go back to work. And so I think that was a mistake.”

McConnell claimed that he and other Senate Republicans are “hearing it all over the country, that it’s made it harder actually to get people back to work.”

The temporary $600 benefit was a provision in the bipartisan coronavirus relief bill passed in March. The legislation, known as the CARES Act, approved $2.3 trillion in funds to stabilize the economy. The $600 amount was designed to bring total unemployment benefits up to 100% of what the average worker would otherwise earn.

Economists say the program is an essential lifeline for workers and the nation’s economy. A June report from Congress’ Joint Economic Committee predicted that, without an extension of the federal supplement, another 2.8 million Americans could lose their jobs. The Economic Policy Institute’s Working Economics Blog estimated last week that keeping the benefits through mid-2021 “would provide an average quarterly boost to gross domestic product (GDP) of 3.7% and employment of 5.1 million workers.”

Senate Democrats proposed on Wednesday that the provision should continue as long as the unemployment rate remains over 11%.

But Republicans have objected to the program, using the argument that it encourages people not to work. Donald Trump reportedly told GOP senators in May that the program was “hurting the economic recovery.” (Experts have disputed the assumption that unemployment benefits provide a significant disincentive to employment — especially when the economy is poor.)

Since the COVID-19 pandemic swept the nation in March, millions of businesses have temporarily or permanently closed. As of the week ending June 6, more than 30 million Americans were claiming unemployment benefits.

As some states rushed to end social distancing rules — ignoring the advice of economists and public health experts — those states have seen spiking numbers of new coronavirus cases and more damage to their economies.

Last week, the nation saw its record high for new daily coronavirus cases. Several states have also broken their own records in recent days.

Many workplaces have proven to be breeding grounds for COVID-19 cases. For vulnerable workers, including older adults and those with other medical conditions, returning to work could prove deadly.

And even if workers feel they can safely go back to their jobs, many do not have that option. According to CNN, as of Monday at least 16 states had rolled back or delayed reopening plans. Some areas are now re-closing businesses that were previously reopened. Some experts predict a full recovery will not come until a vaccine is widely available.

On May 15, the House passed a bill — the Heroes Act — that includes a provision to extend the $600 emergency benefit through early 2021.

McConnell has refused to bring the bill up for a vote in the Senate, calling it “dead on arrival.”

McConnell’s office did not immediately respond to an inquiry for this story.

Published with permission of The American Independent Foundation.

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