Sen. Rob Portman told CNBC on Thursday that Washington lawmakers need a constructive solution to the federal unemployment supplement that is set to expire next month.
The extra $600 per week on top of state-level benefits was created as part of the $2.2 trillion coronavirus relief package that was passed in March. As of now, it will go away at the end of July.
“I think we need to come up with something creative,” the Ohio Republican said on “Squawk Box,” calling the looming expiration date “a cliff.”
“We go from $600 to nothing,” he said.
Portman has proposed a “return-to-work” bonus of $450 per week while also extending the federal unemployment supplement at a lower amount until the end of the year. “That will help people get back to work, which everybody should be for,” he said.
Portman and others contend that the current $600-per-week federal supplement creates a disincentive for people to return to work because they can earn more money on unemployment. That could inhibit the U.S. economy’s recovery from the pandemic-induced devastation, they say.
House Democrats have already passed legislation that includes a provision to extend the $600-per-week federal benefit into early next year. However, the bill is a nonstarter in the Republican-controlled Senate.
The U.S. economy has showed some signs of a stronger-than-expected recovery as states move to ease coronavirus-related restrictions on business. Some 2.5 million jobs were added in May, when economists expected millions of job losses. Retail sales also rose 17.7% last month, more than double expectations.
Former Obama advisor Jason Furman told CNBC earlier this week that extending the enhanced federal unemployment benefit is critical in keep alive the economic recovery.
“The recovery we’ve seen so far has been assisted by extraordinary fiscal and monetary support, and if we pull that away too soon, we’ll pull the rug out of the prospects for the U.S. economy,” said Furman, former chairman of the Council of Economic Advisers.
But instead of $600 per week, Furman and a bipartisan group of economists and former policy makers have suggested tying the amount of the weekly benefit to the overall unemployment rate. “We’d start with replacing about 90% of what you’d get on the job and then with lower unemployment rates, that would go lower,” Furman said.
Larry Kudlow, the White House’s top economic advisor, has said the Trump administration is considering some sort of back-to-work “bonus.” Portman said he has had conversations with a few Democrats about his proposal, suggesting that there was some openness to the idea.
“But I think they [Democrats] were told by their leadership, ‘Our plan is $600. That’s our negotiating position going into this,'” Portman said.
CNBC reported last week that White House and GOP negotiators plan to wait until late July to begin formal negotiations on a fourth coronavirus stimulus package. But the White House’s current stance on an additional stimulus measure is varied across different administration officials, The Washington Post reported Thursday.
The Post, citing anonymous sources, reported that some Republicans in Congress are unhappy with Treasury Secretary Steven Mnuchin, whom they view as too sympathetic to Democratic proposals.