Congress headed toward unemployment showdown

A debate over whether to extend enhanced unemployment benefits is emerging as a significant obstacle to getting a deal on another round of coronavirus relief legislation.

With the national unemployment rate expected to creep toward 20 percent in the months ahead, the fight over whether to boost benefits for Americans who lose their jobs or to keep benefits lean to motivate laid-off employees to rejoin the workforce is set to become a defining issue ahead of the election.

Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellCongress pulls punches on Russian bounties firestorm Congress under pressure to provide billions for school openings Hillicon Valley: Facebook considers political ad ban | Senators raise concerns over civil rights audit | Amazon reverses on telling workers to delete TikTok MORE (R-Ky.) says that Senate Republicans don’t have any interest in extending the $600 federal increase to state unemployment benefits that was a core component of the $2.2 trillion CARES Act.

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The enhanced benefits are due to expire at the end of July, making them a principal topic of the upcoming negotiations.

McConnell told House GOP lawmakers in a conference call Wednesday that the Senate will not extend the beefed-up federal unemployment benefits, which GOP senators say has become a disincentive for middle- and lower-wage workers to return to the job.

But not all Republicans are on board with McConnell.

Sen. Pat RobertsCharles (Pat) Patrick RobertsPence says decision on removing Confederate statues should be made locally The Hill's Morning Report - Presented by Facebook - Justices rule Manhattan prosecutor, but not Congress, can have Trump tax records Senate GOP hedges on attending Trump's convention amid coronavirus uptick MORE (R-Kan.) said “my inclination would say that that’s going to have to continue for a while.”

“I get it, I talk to a lot of business people in Kansas — and South Carolina — about that and the disincentive if you continue to pay it to work. So I say it’s a tough a choice. But I think under the circumstances it should be continued in some form,” he added.

The employment picture grew darker on Thursday after the Labor Department announced that another 2.4 million Americans filed unemployment claims last week, bringing the total for the past nine weeks to 38 million new claims.

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Sen. Thom TillisThomas (Thom) Roland TillisDemocrats seek to tie GOP candidates to Trump, DeVos Senate GOP hedges on attending Trump's convention amid coronavirus uptick Lincoln Project offers list of GOP senators who 'protect' Trump in new ad MORE (R), who faces a tough reelection race in North Carolina, said he wants to wait and see how the unemployment numbers play out.

“I think a lot of it really depends on how well the business openings go. I for one think that anything we do has to be tailored to where we’re not in the situation where the benefit’s greater than the salary it was replacing,” he said.

Other Republicans, however, say there is strong support for shutting off the federal boost to unemployment insurance after July.

“They think it is a huge disincentive to get the economy back and growing again. They’re not happy it was done in the first place,” said Sen. Rob PortmanRobert (Rob) Jones PortmanSenate GOP hedges on attending Trump's convention amid coronavirus uptick Koch-backed group urges Senate to oppose 'bailouts' of states in new ads Romney, Collins, Murkowski won't attend GOP convention MORE (R-Ohio), who helped craft the unemployment benefits section of the CARES Act, referring to complaints he has heard from GOP colleagues about the beefed-up benefits.

Sen. Rand PaulRandal (Rand) Howard Paul'Live with it' is the new GOP response to COVID — but no, we can't do that Koch-backed group urges Senate to oppose 'bailouts' of states in new ads How conservative conspiracy theories are deepening America's political divide MORE (R-Ky.) on Thursday warned: “When the government wage exceeds the market wage you’ll get institutionalized unemployment.”

“It was a mistake to make it so high to begin with. It would be a mistake to extend it,” he added. “If you favor extending it, basically you’re favoring institutionalized unemployment.”

Other Republicans are raising concerns that adding $600 in federal assistance to weekly state unemployment compensation creates a benefit that exceeds the hourly wage for many jobs in their states.

“I think it needs to end,” said Sen. John BoozmanJohn Nichols BoozmanSenate GOP hedges on attending Trump's convention amid coronavirus uptick The Hill's Coronavirus Report: San Francisco Gay Men's Chorus Artistic Director Tim Seelig says choirs are dangerous; Pence says, 'We have saved lives' 7 GOP senators slam State Dept for 'slow and inefficient policy' on passports MORE (R-Ark.). “Hopefully the economy will start to be getting back on track and we’ll be able to get rid of it.”

Portman has proposed a bill that he hopes will give laid-off workers incentive to give up their enhanced benefits and look for new jobs before the July 31 expiration of the $600 federal add-on.

His legislation would let these workers continue collecting $450 of the $600 weekly benefit if they find work in the next nine weeks.

This sets up a major fight with Democrats, who see expanded unemployment benefits as the most effective way to help Americans hit hardest economically by the pandemic.

Speaker Nancy PelosiNancy PelosiBattle over reopening schools heats up Pelosi: Trump wearing a mask is 'an admission' that it can stop spread of coronavirus Sunday shows - Spotlight shifts to reopening schools MORE (D-Calif.) and House Democrats have passed a $3 trillion coronavirus relief bill that would extend the $600 federal add-on to state unemployment benefits through July.

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Sen. Sherrod BrownSherrod Campbell BrownSenate Dems request briefing on Russian bounty wire transfers On The Money: Mnuchin, Powell differ over how soon economy will recover | Millions fear eviction without more aid from Congress | IRS chief pledges to work on tax code's role in racial wealth disparities IRS chief pledges to work with Congress on examining tax code's role in racial wealth disparities MORE (D-Ohio) said Democrats “absolutely” will insist on extending the federal increase to state unemployment benefits.

“It’s been a longtime Republican plan to reduce the amount of UI to workers, to shrink the number of weeks and to make fewer people eligible. In Ohio, only a quarter of unemployed workers are eligible for Ohio unemployment,” he said.

He said Democrats will make extending the program a top priority.

“Democrats are the party of workers, clearly, and they aren’t,” he said of his GOP colleagues.

The debate is just beginning, but it will grow heated in the weeks ahead as both sides begin to negotiate in earnest the size and scope of the next relief bill.

Senate Democratic Whip Dick DurbinRichard (Dick) Joseph DurbinGOP senators voice confidence over uphill Senate battle Finger-pointing, gridlock spark frustration in Senate Hillicon Valley: Facebook takes down 'boogaloo' network after pressure | Election security measure pulled from Senate bill | FCC officially designating Huawei, ZTE as threats MORE (Ill.) predicted: “Republicans will catch ... hell back home when they try to explain cutting off unemployment.”

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He also predicted fallout for not reforming the Small Business Administration’s Paycheck Protection Program or providing more aid to state and local governments.

Durbin warned that failing to extend enhanced unemployment benefits would be a “disastrous mistake.”

“The economists tell us it is probably the single best stimulus that we can put into this economy,” he said

Durbin said if McConnell blocks extending beefed-up unemployment benefits past July 31, there will be hardship across America and in the commonwealth of Kentucky that “he doesn’t even begin to contemplate at this moment.”

Sen. Bernie SandersBernie SandersBiden wins Puerto Rico primary In politics, as in baseball, it ain't over till it's over Biden wins Louisiana primary MORE (I-Vt.), who was a competitive candidate in the Democratic presidential primary and whose support is seen as crucial to turning out voters in the fall, also weighed in Thursday.

“Republicans are going nuts about the $600 per week expanded unemployment benefits that workers now receive. Imagine that! Americans not forced to live on starvation wages. What a frightening precedent. What will they want next? Health care as a human right?” Sanders tweeted Thursday afternoon.

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Some Democratic moderates, however, have signaled in private talks that they’re open to negotiating with Republicans to scaling down the $600 in additional weekly assistance after July.

A Republican source familiar with the preliminary talks said that moderate Sens. Christopher CoonsChristopher (Chris) Andrew CoonsThe Hill's Coronavirus Report: The Hill's Reid Wilson says political winners are governors who listened to scientists and public health experts; 12 states record new highs for seven-day case averages Hillicon Valley: Facebook takes down 'boogaloo' network after pressure | Election security measure pulled from Senate bill | FCC officially designating Huawei, ZTE as threats Democrats, voting rights groups pressure Senate to approve mail-in voting resources MORE (D-Del.), Bob MenendezRobert (Bob) MenendezKoch-backed group urges Senate to oppose 'bailouts' of states in new ads Thomas Kean wins GOP primary to take on Rep. Tom Malinowski Trump administration moves to formally withdraw US from WHO MORE (D-N.J.) and Joe ManchinJoseph (Joe) ManchinKoch-backed group urges Senate to oppose 'bailouts' of states in new ads George Floyd and the upcoming Texas Democratic Senate runoff Energy companies cancel Atlantic Coast Pipeline MORE (D-W.Va.) have expressed interest in finding a compromise.

Sen. Michael BennetMichael Farrand BennetHillicon Valley: Facebook considers political ad ban | Senators raise concerns over civil rights audit | Amazon reverses on telling workers to delete TikTok Senators raise concerns over Facebook's civil rights audit House Democrats chart course to 'solving the climate crisis' by 2050 MORE (D-Colo.) has also signaled a willingness in reviewing the impact of the generous federal payment on people rejoining the workforce.

Jordain Carney contributed.