Finance

Mnuchin: Next stimulus bill must cap jobless benefits at 100 percent of previous income

Treasury Secretary Steven Mnuchin said Thursday that the Trump administration is unwilling to extend a boost to unemployment benefits amid the coronavirus pandemic if it allows jobless workers to make more money than they did before losing their jobs.

In a Thursday interview with CNBC, Mnuchin said that any extension of enhanced unemployment insurance would cap benefits at “no more than 100 percent” of what the recipient made before becoming unemployed.

The $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act signed by President Trump in March added $600 to unemployment insurance in every state. The boost, which expires on July 31, was intended to help workers in industries derailed by the pandemic support themselves and continue spending money amid the lockdowns imposed to slow the pandemic.

The future of the increased benefit is one of the most contentious issues facing lawmakers as they craft another stimulus package.

Economists credit the enhanced unemployment benefits, among other stimulus efforts, with preventing a deeper plunge in economic activity. But many Republicans have expressed regrets about the boost because it pushed unemployment benefits above the average wage in many states.

“We were in an emergency. We went along with that,” Mnuchin said. “We’re going to make sure that people are incented to go back to jobs.”

Mnuchin and many GOP lawmakers argue that the increased jobless benefits have hindered businesses from bringing back workers who would face lower pay and higher health risks back on the job. 

“I’ve heard stories of where companies are trying to get people back to work and they won’t come because [of] the enhanced unemployment,” Mnuchin said Thursday. “But we’ll fix that and we’ll figure out an extension to it that works for companies and works for those people who will still be unemployed.”

Democrats counter that extending the increase is crucial to prevent a flood of evictions and a nosedive in consumer spending that could plunge the U.S. deeper into recession as coronavirus cases spike.

“It would be unconscionable for Republicans to allow supercharged unemployment benefits to expire with the unemployment rate above 11 percent and 2.3 million new unemployment claims just this week,” Senate Finance Committee ranking member Sen. Ron Wyden (D-Ore.) said last week.

Tags Coronavirus coronavirus relief coronavirus stimulus Donald Trump Ron Wyden Steven Mnuchin Unemployment insurance

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