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Biden plan would up extra unemployment benefit to $400

Biden plan would up extra unemployment benefit to $400
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President-elect Joe BidenJoe BidenNoem touts South Dakota coronavirus response, knocks lockdowns in CPAC speech On The Trail: Cuomo and Newsom — a story of two embattled governors Biden celebrates vaccine approval but warns 'current improvement could reverse' MORE’s COVID-19 package will propose increasing additional weekly unemployment benefits from their current $300 weekly level to $400, and extend that and other emergency benefits through the end of September.

The level of additional weekly benefits has been a major sore spot in COVID-19 negotiations.

Regular state unemployment benefits amount to only a fraction of regular income, so Congress originally approved a $600 additional weekly benefit as part of the CARES Act in March.

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But Republicans objected that the addition was imprecise, and would leave many with warped incentives. Studies showed that the additional income left as many as two-thirds of recipients better off with unemployment benefits than in their jobs.

Democrats countered that with millions of jobs eliminated and the pandemic raging, the extra money would do little to prevent companies from finding workers, and the extra money would be helpful to the low income people who received it.

Controversy over the benefit was one reason Congress could not reach an agreement in time to extend the benefit past its July expiration, leaving millions of people with meager support for months.

President TrumpDonald TrumpNoem touts South Dakota coronavirus response, knocks lockdowns in CPAC speech On The Trail: Cuomo and Newsom — a story of two embattled governors McCarthy: 'I would bet my house' GOP takes back lower chamber in 2022 MORE used an executive workaround to approve an extra $300 in payments, but the emergency funds he tapped only lasted a few weeks. Congress finally approved an additional $300 in weekly benefits in late December, which are set to expire on March 14 alongside other key programs extending benefits for additional weeks and expanding them to groups normally ineligible, such as the self-employed or gig economy workers.

Biden’s plan would extend those programs until the end of September as well.

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But senior Biden officials are also signalling that they are open to working with Congress to include automatic cutoffs in order to target the programs more precisely.

Those could reduce or cut off additional benefits as states see their unemployment rates fall, an approach that incoming Senate Finance Committee Chairman Ron Wyden (D-Ore.) favors.

A group of high profile economists on Thursday included the need for automatic stabilizers as one approach to maintaining fiscal responsibility during times of economic emergency, both to ensure that benefits don’t last too long and that they don’t run out too soon.

"The first piece of this, I think, is to make sure that in whatever is done over the next few months, we don't repeat the same mistakes of the past of assuming that you can be one and done, that you put something in place and that's all you need based on the current set of projections," said Peter Orszag a White House Budget director under former President Obama and head of the nonpartisan Congressional Budget Office. "It almost inevitably turns out that those projections were wrong, so it's worth building into that initial package the type of automatic stabilizers we talked about."