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Mitch McConnell pledges to scrap $600 boost in unemployment benefits

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  • McConnell vowed to toss out the newly enacted $600 boost in weekly unemployment checks for laid-off Americans.
  • The Kentucky Republican said their party would have to “clean up the Democrats’ crazy policy that is paying people more to remain unemployed than they would earn if they went back to work.”
  • Democrats are pressing to extend those benefits, and it’s forming a deep rift among lawmakers fighting to shape the size and scale of the next coronavirus relief package.
  • Visit Business Insider’s homepage for more stories.

Sen. Majority Leader Mitch McConnell reportedly pledged to scrap the newly enacted $600 boost in weekly unemployment benefits, calling it an outrageous policy that allows many jobless people to earn more than they did at their old positions.

During a Wednesday call with House Republicans, McConnell said their party would have to “clean up the Democrats’ crazy policy that is paying people more to remain unemployed than they would earn if they went back to work.” Politico first reported the comments.

The Kentucky Republican promised the ramped-up unemployment payments would “not be in the next bill.”

McConnell’s office did not immediately respond to a request for comment. 

The remarks mirror the reported opposition from President Donald Trump to extend the boosted payments past July 31, the date of its expiration. It comes as nearly 39 million Americans filed for unemployment over the past nine weeks, sending the jobless rate soaring to its worst level since the Great Depression nearly a century ago.

As part of the CARES Act passed in March, the federal government added a $600 boost in weekly unemployment checks on top of state benefits that would last until the summer. It also widened eligibility to gig workers and lengthened unemployment assistance for an additional 13 weeks.

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Democrats have proposed extending those payments until Jan. 31 as part of their $3 trillion coronavirus spending package, and many are pressing to tie the size of those benefits to the state of the economic recovery. The bill passed the House on Friday, but it’s fiercely opposed by Republicans who say they are pausing on further emergency spending for now.

The Washington Post reported that Republicans are weighing other options instead of the beefed-up benefits, such as a one-time lump-sum payment or scaling it back over time.

The extension of generous unemployment benefits forms one of the deepest rifts among Republicans and Democrats fighting over the size and scale of the next federal rescue package. Conservatives argue that people who are laid-off shouldn’t be earning more on unemployment than people who are still working. They say it’s disincentivizing work.

A May study from the University of Chicago found around two-thirds of laid-off workers drawing unemployment checks are earning more than they did at their old jobs.

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But experts say that abruptly phasing out the payments would amount to a drastic pay cut ranging from 50% to 75% at a moment when joblessness is still rising and the prospect of a competitive labor market where employers are competing to hire workers is slim.

Democrats such as Rep. Don Beyer of Virginia — who’s pressing to put unemployment on autopilot — are raising dire warnings that a failure to extend government help could lead to a “full-blown humanitarian catastrophe.”

“Cutting back federal assistance at the height of the crisis would mean self-inflicted disaster, devastation, and additional deaths,” he said in a Wednesday statement. “That must not happen.”

Unemployment is projected to remain high well into next year. The nonpartisan Congressional Budget Office estimated the unemployment rate would be around 9% in 2021.

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