The Federal Reserve Bank of Minneapolis issued a warning this week that the loss of Pandemic Unemployment Compensation (PUC), the $600 boost to weekly unemployment insurance (UI) benefits, by the end of the month will "result in large income losses" particularly to younger workers in food preparation and health care, and will "generate hardship for families, […] impair their financial positions and potentially degrade their ability to service debt." Meaning they won't be able to make rent, car, or credit card payments and eat, all at the same time. The hardest hit demographic, the Minneapolis Fed found for at least the four states in its region, is the 16 to 34 age group—the likeliest to be getting UI. That's the group likeliest to have young children in the household, as well.
But that's not going to bother all the "pro-life" Republicans in the Senate who agree with their leader Mitch McConnell who says that the $600 boost these people got through an earlier coronavirus relief bill was "a mistake." They want those payments to end. McConnell right now is writing his version of the next relief bill, which will at the very least cut those payments as well as try to force school reopening and provide liability protections for businesses and schools that don't provide protection from the virus to workers or customers against infection. "There's going to be a heavy emphasis in the bill I'm going to unfold next week on education. I know it will be costly," McConnell said. "We need to find a way to safely get back to work, and we feel, I feel, like the federal government will have to play a financial role in helping to make that possible." Making sure people actually live and come out of this on the other side in less than total financial ruin isn't on McConnell's agenda. The Grim Reaper of legislation is the Grim Reaper of everything these days.
Republicans involved in McConnell's process—these aren't negotiations and they do not include Democrats—say he's now considering more than $1 trillion, his previous limit, but that could be because his goal of getting school kids' butts back in classrooms will cost more than he originally bargained for. What he and at least one White House adviser insist is that $600/week boosts to unemployment won't be included. "We can't allow those benefits to be extended, or we're not going to have a jobs recovery in the fall," said Stephen Moore, a Trump adviser and supposed economist.
That's despite the warnings from the Federal Reserve and even the U.S. Chamber of Commerce that these payments, at least in some amount, have to continue. The Chamber sent a letter to McConnell saying that "completely withdrawing the $600 risks significant individual hardship as well as a drop in consumption that holds back economic recovery." They're calling for a cap on the weekly payments of $400, but want them to cover as much as 90% of people's previous wages, indexed to state unemployment rates.
Senate Democrats have their own a plan to extend the $600 payment and tie it to unemployment rates in the states, having it incrementally reduce as states' unemployment rates are reduced. Once they drop below 6%, the extra payment would be cut off. For the House Democrats' part, House Speaker Nancy Pelosi is having none of it. "They make a big fuss over $600 when they were willing to give $2 trillion in tax breaks at a cost of $2 trillion to the national debt—to give tax breaks to their friends," she said Wednesday on MSNBC. "People need the $600."
By the way, that tax break has netted U.S. billionaires—not just millionaires but billionaires—$584 billion in just the first three months of the pandemic. That's a 20% spike in their wealth. Another 29 new billionaires have been added in the pandemic, up to 643 now. Yay, us.