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Congress returned to work this week still far apart on components of a fifth coronavirus stimulus package, including whether to extend the $600 weekly enhanced unemployment benefit set to expire at the end of this month.
Lawmakers are under pressure to decide on whether to extend the benefit by the end of this week, as the last check in the program will be cut this weekend. Congress is likely to agree on some extension, although it may not be for the full amount.
If that federal money were stopped, it would mean less money spent in grocery stores or getting takeout or more people not being able to afford rent. Maine workers, whose average income ranks lower than many other states, benefited the most from the $600 boost, which has increased their income well above what they normally would make, according to the New York Times.
“Decreasing the amount is better than nothing,” said James Myall, policy analyst with the left-leaning Maine Center for Economic Policy in Augusta. “It’s a way of getting a boost for Maine’s economy at a time when less money is coming from tourism revenue.”
The Federal Pandemic Unemployment Compensation program, created as part of the $2.2 trillion stimulus bill passed in late March, gives workers $600 per week on top of regular unemployment benefits. About 71,000 received the enhanced funds for the week of July 5 to July 11, Maine Department of Labor spokesperson Jessica Picard said.
The federal program ends on July 31, but because of the state’s payment schedule, the last payment will be for the week ending this Saturday, meaning most people will get the final payment between July 26 and Aug. 1, Picard said.
Most congressional Democrats are behind renewing the full amount, while Republicans have said the benefit can be extended but should be capped at no more than 100 percent of the worker’s wage before they were laid off.
Both U.S. Sen. Susan Collins, a Republican, and U.S. Rep. Jared Golden, a Democrat from the 2nd District, have said they do not support continuing the current $600 benefit but support some extension. U.S. Sen. Angus King, an independent, wants to keep aid, but did not specify how much. U.S. Rep. Chellie Pingree, a Democrat from the 1st District, wants to extend the $600.
Collins said that when she voted to boost unemployment benefits, the U.S. Treasury Department and the Maine Department of Labor told her the only way to quickly administer them was through a flat increase. But states have had time to adjust their unemployment systems, she said, so recipients should not receive more through unemployment compensation than they were previously earning.
“By fixing this unintentional disincentive to work, we can support families and help restore jobs more quickly,” she said in a statement.
Compromises under discussion include decreasing the weekly amount to $200 with a bonus to those returning to work. Whatever Congress does, there still is likely to be a gap in benefits, Heidi Shierholz, an economist at the liberal-leaning Economic Policy Institute, wrote in a recent blog post that letting extra payments expire and then reinstating them would be an “unnecessary administrative nightmare” for states.
Shierholz predicts that 18,025 more Mainers, or 2.8 percent of those employed, will lose their jobs if the benefit isn’t extended. Some unemployment recipients might also risk losing their homes, as some have used the $600 to help pay rent and other basic expenses.
Employers have said the extra money that exceeds workers’ regular pay has made it difficult to rehire people, according to the Federal Reserve’s bimonthly Beige Book report on current economic conditions. Myall said he doubts that job refusals are happening widely, because people prefer to work because of the longer-term benefits of doing so. People who aren’t returning to work often are at-risk or have an at-risk family member.
Nationwide, about five of every six recipients get benefits that top the amount they would make weekly from working, according to the Congressional Budget Office. Myall worries that all the federal help so far has given people a false sense of security that things aren’t as bad as they really are.
“When those things run out or go away, there’s a cliff because congressional action was supporting the economy and there’s a risk of that going away too soon,” he said. “I think it’s a little frustrating that things are being left up to the last minute.”
Correction: A previous version of this story misstated the timeframe for the $200 bonus under discussion. It is weekly.