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Congress, GOP fights over replacement of $600 federal unemployment benefit as it lapses

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  • Congress is at an impasse over enhanced unemployment benefits, with Republicans under immense pressure to prevent them from lapsing on Friday.
  • Democrats assailed the GOP for beginning to debate a replacement to the $600 weekly benefits at the 11th hour.
  • Millions of unemployed people face income drops ranging from 50% to 75% until Congress enacts another supplemental payment to take its place.
  • Visit Business Insider’s homepage for more stories.

The $600 federal supplement added to state unemployment checks formally expires on Friday — and Congress is still fiercely debating its replacement as unemployment remains high and jobs are scarce.

Republicans and the Trump administration are under immense pressure to keep in place a government lifeline to the jobless.

Senate Majority Leader Mitch McConnell sought to open up a legislative pathway through a so-called “shell bill” on Thursday. That step allows the chamber to move quickly on a short-term continuation of unemployment benefits if a plan garnered enough support, but no consensus appeared to be near on any plan. The chamber adjourned for the weekend.

Read more: Fights over liability protections, unemployment benefits, and hazard pay are keeping Democrats and Republicans from reaching a deal on the next coronavirus stimulus

Sen. Ron Johnson of Wisconsin rolled out a proposal on Thursday to extend bulked-up weekly payments at $200, instead of the $600 per week that Congress approved in March. That would allow states to opt for a two-thirds wage replacement scheme, a slightly lower level than what Republicans unveiled Monday in their stimulus plan — four days before the $600 payments formally expired.

But Democrats swiftly rejected the piecemeal approach, and attacked Republicans for waiting until the 11th hour to begin debating the extension of enhanced unemployment insurance.

“It’s too late because even if we were to pass this measure, almost every state says people would not get their unemployment for weeks and months. All because of the disunity, dysfunction of the Republican caucus,” Senate Minority Leader Chuck Schumer said.

Democrats are seeking to pass a broader spending package and support extending the $600 federal payouts through January, a key part of a $3 trillion economic relief legislation the Democratic-led House approved in May. The GOP never put it to a vote in the Senate.

A deal, though, isn’t within sight, Treasury Secretary Steven Mnuchin said late on Thursday after a meeting with Schumer, House Speaker Nancy Pelosi, and White House Chief of Staff Mark Meadows.

“We made progress on certain issues; we’re still very far apart,” Mnuchin said. “We made a proposal for a short-term deal and as of now, they’ve repeated they don’t want to do that.”

The Trump administration said it could support a one-week extension of the $600 benefit, but Democrats rebuffed it as insufficient.

Though Congress is at an impasse, the final $600 payouts already went out to the unemployed last weekend, meaning that millions of jobless people will receive their first reduced benefit checks in the coming days.

They face income losses ranging from 50% to 75% depending on the amount of their state benefit payments, according to Ernie Tedeschi, a policy economist at Evercore ISI.

Many economists credit the $600 government benefits with keeping people afloat and enhancing spending power for households during a recession. They say abruptly reducing those payments would compel families to tighten their finances during a volatile period and hurt the economy overall.

“All of those tough choices that you didn’t have to make before because you got unemployment insurance, now you have to make them,” Tedeschi recently told Business Insider. “Like, ‘Do I pay rent? Do I cut down on groceries? Do I skip a medical appointment?’ That’s going to cut really deep into family budgets.”

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