Enhanced unemployment benefits are set to expire as congressional negotiators are deadlocked over a coronavirus relief deal.
The additional $600 a week in unemployment insurance that Congress provided in late March will sunset on Friday at midnight, dealing a significant financial blow to millions of jobless Americans amid a weakening labor market.
Lawmakers had hoped the deadline, which was known for months, would result in the kind of eleventh-hour agreement that was once commonplace in Washington. But in a sign of how far apart negotiators are, the Senate left town for the week on Thursday, ensuring Congress will careen over the looming unemployment cliff.
"I think this is something that we saw the deadline coming and knew that we needed to take action. We haven't been able to reach consensus and that's unfortunate, but we need to respond and people expect us to," said Sen. Lisa Murkowski (R-Alaska).
The consequences of inaction are high: After trending downward since March, unemployment claims rose for the second week in a row, according to Labor Department data released Thursday morning. Roughly 30 million Americans have filed jobless claims since the pandemic began.
Underscoring the economic damage enacted by the coronavirus, U.S. gross domestic product contracted by a 32.9 percent annual pace in the second quarter, news that sent the stock market tumbling Thursday. With coronavirus cases climbing across the country, economists warn that the U.S. isn’t out of fiscal danger.
Sen. Ron Wyden (Ore.), the top Democrat on the Finance Committee, lamented that “the economists, the people who aren’t political figures, told us … this is a five-alarm fire.”
As Congress inched closer to the Friday deadline, several GOP senators floated their own unemployment plans. Senate Majority Leader Mitch McConnell (R-Ky.) appeared to open the door to getting a smaller deal and President Trump told Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows to focus on jobless benefits in their negotiations with Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y).
“I'm anxious to see us have a bridge on unemployment insurance so that individuals will not lose their supplemental unemployment insurance while we're working on a larger piece of legislation COVID relief legislation,” said Sen. Mitt Romney (R-Utah). “Whether that's my proposal or others that are being floated around I do think that we need to have a temporary program that is put in place so we don't have a gap.”
But bipartisan negotiators remain at loggerheads: Democrats want to continue the $600 per week unemployment plus-up that most Republicans oppose. The administration wants to switch to a wage-based match, something Democrats and even some states say is not feasible.
Meadows and Mnuchin have met four times in as many days with Pelosi and Schumer but they are, in their own words, “nowhere near” a deal. The White House’s idea of doing a smaller package, which would include an extension of federal unemployment insurance, has been rejected by Democrats, and Republicans acknowledge there isn’t consensus in their caucus about what would even be in a slimmed-down bill.
Meadows and Mnuchin want to get a deal with Democrats on a package that would include an evictions moratorium and extended unemployment insurance.
But Schumer, speaking to reporters after their fourth meeting on Thursday night, questioned if the administration understood “the gravity of the problem.” Mnuchin said the administration had proposed a short-term deal but Democrats reiterated that they weren’t interested.
"The proposals we made were not received warmly,” Meadows added.
Frustrations over the missed deadline prompted lawmakers to point fingers across the aisle to assign blame for the economic pain that will impact millions of Americans.
Republicans tried to pass two unemployment bills. One from Sens. Ron Johnson (R-Wis.) and Mike Braun (R-Ind.) would provide, when combined with state unemployment, a two-thirds match to an individual’s previous wage, with a $500 per week cap on the federal benefit. If a state could not implement the wage-based figure, they would get a $200 per week flat federal benefit.
Sen. Martha McSally (R-Ariz.) tried to pass the second measure: a one-week extension of the $600 benefit, that, in a shift, Meadows said Trump would support.
But Democrats blocked both, accusing Republicans of carrying out “stunts.”
“Even if we were to pass this measure, all the states — almost every state — says people would not get their unemployment for weeks and months. All because of the disunity, dysfunction of this Republican caucus, and of the leader, afraid to negotiate because he doesn't have his people behind him,” Schumer said.
Though the CARES Act from March set the expiration date for the federal benefit as July 31, the deadline effectively hit last weekend because of how several states disburse unemployment benefits.
The congressional drama comes after roughly two weeks of no measurable progress toward a bipartisan agreement on the next coronavirus relief package.
Republicans spent last week -- their first week back from a two-week July 4th recess -- haggling amongst themselves, and with the White House, about what the GOP proposal should look like. The package they unveiled on Monday sparked fierce backlash from several GOP senators.
McConnell underscored the difficult dynamic facing Republicans as they hunt for leverage, when he acknowledged that a sizable portion, though not a majority, of his caucus does not want to do another bill.
“About 20 of my members think that we’ve already done enough,” he told PBS’ “Newshour.”
Schumer compared trying to negotiate with the administration like “trying to nail jello to the wall.”
“It's dawning on them now — not a week ago, not three weeks ago, not two months ago — that we're facing a cliff on unemployment,” he said.
With no deal in sight, McConnell has set up a debate for next week on the Senate floor over the unemployment benefits.
The GOP leader didn’t divulge what proposal he’ll start the debate with, but several Senate Republicans said that they expect it to be the Johnson-Braun legislation, which has already been blocked once by Democrats and will need 60 votes to advance.
Absent a breakthrough, Republicans say the vote will at least let them get Democrats on the record after days of watching the bipartisan talks go nowhere and mounting frustration on Capitol Hill.
“Our guys want to vote, they want to be able to prove they’re moving the ball down the field and the Democrats want to keep blocking,” Sen. John Thune (R-S.D.) said, asked about GOP strategy. “This exposes that.”