GOP Fights to Cut Unemployment Payments as Swing-State Voters Say Keep Them

July 30th 2020

Mitch McConnell (Gage Skidmore)

By Josh Israel

American Independent Foundation

A survey of swing-state voters finds the vast majority disagree with a Republican push to reduce emergency unemployment payments during the COVID-19 pandemic. But that does not appear to have swayed Donald Trump or Republicans in the Senate.

Senate Majority Leader Mitch McConnell introduced a proposal on Monday, negotiated by the Republican caucus and the White House, that would replace the current $600-a-week federal unemployment insurance subsidy with a temporary $200-a-week payment.

The $600 amount had been designed to replace 100% of the average worker’s salary. Under the GOP proposal, once states switched to a new system, workers would get a total of 70% of what they made before becoming unemployed.

House Democrats passed a bill in May to extend the $600 payments, which expire July 31. McConnell (R-KY) has refused to bring the legislation up for a vote in the Senate, mocking it as “dead on arrival.”

A CNBC/Change Research poll, released Wednesday, found that voters in six swing states strongly support keeping the current level of support for those who lost jobs due to the pandemic. A total of 62% of likely voters in Arizona, Florida, Michigan, North Carolina, Pennsylvania, and Wisconsin supported the extension; about 36% opposed it.

Another poll earlier this month of voters in presidential and Senate battleground states found 76% of voters supported the House-passed legislation, compared to just 16% opposed. And a national poll in June found about 75% of Americans said the $600 supplement should either be kept (35%) or increased (40%).

But Republicans have been aiming to reduce or eliminate the benefit since it became law in late March.

Days after Trump signed it into law, Sen. Lindsey Graham (R-SC) —who had opposed the provision to begin with — vowed the subsidy would be reauthorized only “over our dead bodies.”

Soon after signing the legislation, Trump complained, “We’re paying people to stay home. Think of it, we’re paying people not to go to work. How about that? How does that play?”

In May, Trump reportedly told Senate Republicans he did not want to extend them past July.

McConnell said in late June that, unlike the House bill, the next relief legislation the Senate passed would not include the full unemployment subsidy, suggesting it served as an incentive for people to not return to work.

“Unemployment is extremely important. And we need to make sure, for those who are not able to recover their jobs, unemployment is adequate,” he told reporters. “That is a different issue from whether we ought to pay people a bonus not to go back to work. And so I think that was a mistake… And we’re hearing it all over the country that it’s made it harder actually to get people back to work.”

On July 1, Trump again objected to the system, saying, “You’d make more money if you don’t go to work,” he said. “We don’t want to have that. We want to have people get out, and we want to create a tremendous incentive for people to want to go back to work.”

On Sunday, Treasury Secretary Steve Mnuchin opposed renewal, telling Fox News, “It just wouldn’t be fair to use taxpayer dollars to pay more people to sit home than they would working and get a job.”

But experts say ending or cutting the emergency payments will hurt American families, especially poorer ones.

“That $600 allows unemployed people to go about their regular lives and to spend money and buy goods and services,” economist Heidi Shierholz of the Economic Policy Institute told the American Independent Foundation earlier this month. “And if those $600 are taken way, those unemployed people won’t be able to buy those goods, and the people who produce those goods and services will lose their jobs.”

“The $600 a week disproportionately benefits poor people and that is really a feature, not a bug,” Martha Gimbel, manager of economic research at Schmidt Futures, told Yahoo! Money on Tuesday.

She warned that cutting the benefits would hurt both those people and the economy overall. “I see very little argument to pull consumer spending out of the economy at this time, which is what cutting unemployment insurance benefits would be,” she added. “The United States is a consumer-driven economy and if consumers cannot spend, we are in a lot of trouble.”

In June, a report by Congress’ Joint Economic Committee predicted that if the benefits are not extended another 2.8 million Americans could lose their jobs.

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