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Unemployment benefits to expire as coronavirus talks deadlock

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 fast-approaching unemployment cliff.

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"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 MurkowskiLisa Ann MurkowskiThe Hill's Morning Report - Presented by Facebook - GOP torpedoes election bill; infrastructure talks hit snag White House digs in as infrastructure talks stall Schumer vows next steps after 'awful' GOP election bill filibuster MORE (R-Alaska).

The consequences of inaction are severe: 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 WydenRonald (Ron) Lee WydenHeat wave sparks historically unseasonable wildfires in West Biogen opens door to adjusting price of Alzheimer's drug amid outcry Overnight Health Care: White House acknowledges it will fall short of July 4 vaccine goal | Fauci warns of 'localized surges' in areas with low vaccination rates | Senate Finance leader releases principles for lowering prescription drug prices MORE (Ore.), the top Democrat on the Senate 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 McConnellAddison (Mitch) Mitchell McConnellCan Manchin answer his predecessor's call on voting rights? Biden at Sen. John Warner's funeral: He 'gave me confidence' Democrats' narrow chance to retain control after 2022 MORE (R-Ky.) appeared to open the door to getting a smaller deal, and President TrumpDonald TrumpIran claims U.S. to lift all oil sanctions but State Department says 'nothing is agreed' Ivanka Trump, Kushner distance themselves from Trump claims on election: CNN Overnight Defense: Joint Chiefs chairman clashes with GOP on critical race theory | House bill introduced to overhaul military justice system as sexual assault reform builds momentum MORE told Treasury Secretary Steven MnuchinSteven MnuchinDemocrats justified in filibustering GOP, says Schumer Yellen provides signature for paper currency Biden's name will not appear on stimulus checks, White House says MORE and White House chief of staff Mark MeadowsMark MeadowsGOP governors embrace culture wars with White House in mind Tech industry pushes for delay in antitrust legislation Head of firms that pushed 'Italygate' theory falsely claimed VA mansion was her home: report MORE to focus on jobless benefits in their negotiations with Speaker Nancy PelosiNancy PelosiSchumer vows to advance two-pronged infrastructure plan next month Senators say White House aides agreed to infrastructure 'framework' Tim Cook called Pelosi to say tech antitrust bills were rushed MORE (D-Calif.) and Senate Minority Leader Charles SchumerChuck SchumerDemocrats urge Biden to extend moratorium on student loan payments White House draws ire of progressives amid voting rights defeat Murkowski to vote 'no' on voting rights bill MORE (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 RomneyWillard (Mitt) Mitt RomneySenators say White House aides agreed to infrastructure 'framework' Trump clash ahead: Ron DeSantis positions himself as GOP's future in a direct-mail piece Overnight Defense: Joint Chiefs warn against sweeping reform to military justice system | Senate panel plans July briefing on war authorization repeal | National Guard may have 'training issues' if not reimbursed MORE (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.”

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But bipartisan negotiators remain at loggerheads: Democrats want to continue the $600 per week unemployment boost 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 JohnsonRonald (Ron) Harold JohnsonOvernight Defense: Joint Chiefs warn against sweeping reform to military justice system | Senate panel plans July briefing on war authorization repeal | National Guard may have 'training issues' if not reimbursed Senate panel plans July briefing on war authorization repeal Overnight Defense: Senate panel delays Iraq war powers repeal | Study IDs Fort Hood as least-safe base for female soldiers | Pentagon loosens some COVID-19 restrictions MORE (R-Wis.) and Mike BraunMichael BraunIU parents protest school's vaccine mandates Rick Scott introduces bill banning 'vaccine passports' for domestic flights Braun-McConnell bill would protect Americans from IRS surveillance MORE (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 McSallyMartha Elizabeth McSallyGOP group launches million ad campaign pressing Kelly on filibuster Democrats facing tough reelections back bipartisan infrastructure deal McGuire unveils Arizona Senate campaign MORE (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.

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Republicans spent last week — their first week back from a two-week July 4 recess — haggling among 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’s “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.

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The GOP leader didn’t divulge what proposal he’ll start the debate with, but several Senate Republicans told The Hill 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 ThuneJohn Randolph ThuneThe Hill's Morning Report - Presented by Facebook - GOP torpedoes election bill; infrastructure talks hit snag White House digs in as infrastructure talks stall On The Money: Democrats make full-court press on expanded child tax credit | White House confident Congress will raise debt ceiling MORE (R-S.D.) said, asked about GOP strategy. “This exposes that.”