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 MurkowskiDemocratic senator to party: 'A little message discipline wouldn't kill us' Overnight Energy: Trump officials finalize plan to open up protected areas of Tongass to logging | Feds say offshore testing for oil can proceed despite drilling moratorium | Dems question EPA's postponement of inequality training Poll: 57 percent of Americans think next president, Senate should fill Ginsburg vacancy 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 WydenHillicon Valley: Subpoenas for Facebook, Google and Twitter on the cards | Wray rebuffs mail-in voting conspiracies | Reps. raise mass surveillance concerns On The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline Democratic senators ask inspector general to investigate IRS use of location tracking service 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 McConnellDemocratic senator to party: 'A little message discipline wouldn't kill us' House to vote on resolution affirming peaceful transition of power Republican lawyers brush off Trump's election comments MORE (R-Ky.) appeared to open the door to getting a smaller deal, and President TrumpDonald John TrumpFederal prosecutor speaks out, says Barr 'has brought shame' on Justice Dept. Former Pence aide: White House staffers discussed Trump refusing to leave office Progressive group buys domain name of Trump's No. 1 Supreme Court pick MORE told Treasury Secretary Steven MnuchinSteven Terner MnuchinThe Hill's Morning Report - Sponsored by Facebook - Republicans lawmakers rebuke Trump on election On The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline Vulnerable Democrats tell Pelosi COVID-19 compromise 'essential' MORE and White House chief of staff Mark MeadowsMark Randall MeadowsWhite House chief of staff knocks FBI director over testimony on election fraud Anxious Democrats amp up pressure for vote on COVID-19 aid Pelosi hopeful COVID-19 relief talks resume 'soon' MORE to focus on jobless benefits in their negotiations with Speaker Nancy PelosiNancy PelosiDemocratic senator to party: 'A little message discipline wouldn't kill us' Overnight Health Care: New wave of COVID-19 cases builds in US | Florida to lift all coronavirus restrictions on restaurants, bars | Trump stirs questions with 0 drug coupon plan Overnight Defense: Appeals court revives House lawsuit against military funding for border wall | Dems push for limits on transferring military gear to police | Lawmakers ask for IG probe into Pentagon's use of COVID-19 funds MORE (D-Calif.) and Senate Minority Leader Charles SchumerChuck SchumerPelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' 3 reasons why Biden is misreading the politics of court packing Cruz blocks amended resolution honoring Ginsburg over language about her dying wish 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 RomneyCrenshaw looms large as Democrats look to flip Texas House seat The Hill's Morning Report - Sponsored by Facebook - Republicans lawmakers rebuke Trump on election Trump dumbfounds GOP with latest unforced error 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 JohnsonThe Hill's Morning Report - Sponsored by Facebook - Trump previews SCOTUS nominee as 'totally brilliant' The Hill's 12:30 Report: Ginsburg lies in repose CHC leaders urge Senate to oppose Chad Wolf nomination  MORE (R-Wis.) and Mike BraunMichael BraunTrump plans to pick Amy Coney Barrett to replace Ginsburg on court Trump dumbfounds GOP with latest unforced error Pessimism grows as hopes fade for coronavirus deal 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 McSallyOn The Trail: Making sense of this week's polling tsunami The Hill's Campaign Report: Presidential polls tighten weeks out from Election Day Mark Kelly: Arizona Senate race winner should be sworn in 'promptly' 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 ThuneHouse to vote on resolution affirming peaceful transition of power Trump dumbfounds GOP with latest unforced error Senate passes resolution reaffirming commitment to peaceful transition of power MORE (R-S.D.) said, asked about GOP strategy. “This exposes that.”