The Republicans’ political landscape looks bleak. President Donald Trump is trailing Joe Biden in most national polls, at least four Senate Republicans are locked in tight races with Democratic challengers, increasing the possibility that Democrats regain control of the chamber, and the party’s attempt to retake the House of Representatives—always an uphill battle—now looks exceedingly unlikely.
In that grim context, the prospect of a fourth major bipartisan coronavirus stimulus package seemed like a gift from the political gods. House Democrats, who passed a $3 trillion relief bill in May, were essentially offering both the White House and Congressional Republicans the opportunity to deliver a powerful piece of legislation to constituents, desperate for help in the troubled economy, just months before Election Day.
But now, with the expiration of expanded unemployment insurance looming on July 31, that potential political gift is beginning to sour. To prevent a lapse in these benefits, Congress would have to act immediately. But that seems unlikely, as Republicans to argue with one another over a version of a package that will form the starting point for negotiations with Democrats. Democrats, for their part, are making hay of the GOP dysfunction on the campaign trail, arguing that by failing to extend the benefits, Republicans are abandoning their constituents in a time of great need.
“For Americans who rely on federal emergency unemployment relief to feed their families, pay the rent or mortgage and provide a bridge through this crisis, their relief will run out in two days,” Stewart Boss, a spokesperson for the Democratic Senatorial Campaign Committee, said in a statement on Thursday. “After a two-week recess, Senate Republicans wasted days bickering and then told the White House they would not allow for an extension of the resources that millions of Americans need. Mitch McConnell and Republicans in the Senate are proving once again that they are unwilling to do what is right, even during a public health and economic crisis.”
The last major relief package, which Trump signed into law in March, included a weekly $600 check for unemployed workers to supplement states’ unemployment compensation through the end of July. House Democrats’ bill extends the supplemental unemployment benefit through January 2021, but Senate Majority Leader Mitch McConnell dismissed the Democrats’ version out of hand in May, calling it a “liberal wish list.”
Two months later, with the national unemployment rate at 11 percent and likely to rise as states like California re-impose lockdowns amid a resurgence of coronavirus cases, Republicans now acknowledge that extending the benefits in some form is necessary. Another 1.4 million Americans filed new claims for unemployment benefits last week, the first weekly increase in months, according to federal unemployment data released Thursday.
After days of intra-party squabbling over their own version of a relief bill, Senate Republicans and the White House announced Wednesday evening that they had reached an agreement. The full details have not yet been disclosed, but Secretary Treasury Steven Mnuchin, who is leading the negotiations for the White House, said they are proposing that applicants receive “a 70 percent wage replacement.” He rejected outright the prospect of keeping a universal $600. “We’re not going to pay people more money to stay at home than work but we want to make sure the people that are out there that can’t find jobs do get a reasonable wage replacement,” he said Thursday on CNBC.
Democrats have condemned the Republicans’ plan. “I don’t think that’s the policy we ought to pursue,” said House Majority Leader Steny Hoyer, who appeared on CNCB right after Mnuchin. “If he wants to negotiate some alternative figures, fine, put them on the table, let’s talk about them. But don’t keep twiddling your thumbs while the American people are burning from a virus and a tanking economy.”
Congress, meanwhile, is running out of time. To avoid a lapse in benefits for most Americans on unemployment, Congress must reach a deal this weekend, according to Michele Evermore, a policy analyst at the National Employment Law Project. Since benefit distributions operate on a weekend-to-weekend schedule, Sunday is the cutoff for re-upping the current benefits without a gap. “If they don’t have a deal by this weekend, states have to turn the computer systems off,” Evermore says. “They have to turn off the code in their system that allows for the extra $600 to be paid.”
Senate Republicans on Wednesday floated the idea of a stop-gap measure, in which Congress would move quickly to extend the benefits, while leaving the rest of the package for further negotiations. But that plan seems unlikely to happen, too: Senators are leaving town for the weekend on Thursday. Even if they manage to hastily craft a plan Thursday afternoon, House Speaker Nancy Pelosi said any benefits extension should be part of a broader relief bill.
Mnuchin said he wants to pass a new relief package by July 31, but given the contentious negotiations so far, the timeline is optimistic. A future vote will likely push up against the August 10 start of Congress’s month-long summer recess. Assuming an extension of benefits is included in the bill that eventually passes, an early-August vote would mean that applicants would be forced off supplemental income for at least a month, Evermore says.
“People’s incomes are going to fall off a cliff, and that has a spiraling effect,” she says, describing the economic fallout from allowing supplemental benefits to lapse. “They lose buying power, they have uncertainty – they’re not going to spend the money.”
Millions of Americans are currently relying on the supplemental unemployment program, and polling indicates it’s relatively popular. While Democrats can point to the bill that House passed in May, Republicans, particularly those facing tough reelection campaigns, have no such legislation to tout on the campaign trail. Arizona’s Martha McSally, Maine’s Susan Collins, Montana’s Steve Daines, and Colorados Cory Gardner will likely have to answer why their party failed to prevent the lapse.
Gardner and Daines’ office did not respond to request for comment. Collins and Gardner have said in recent days they do not think the $600 is necessary going forward. Collins’ office said in a statement that she supports expanded insurance, but that “recipients should not receive more through unemployment compensation than they were previously earning.” McSally’s office also said in a statement that she supports expanded unemployment insurance but did not specify what that would look like.
Democrats are already citing the standoff in local political ads. The first ad Senate Majority Pac, a Super PAC that works to elect Democratic Senators, ran in Montana in May focused on Daines’ initial opposition to expanded unemployment insurance before the CARES Act passed in March. “Daines gave trillions in tax breaks to big corporations but pushed cuts to Medicare opposed emergency paid sick leave, and even tried to limit unemployment benefits for those thrown out of work by the Coronavirus,” a voice in the ad intones.
Democrats plan to continue to capitalize on the Republicans’ failure to pass their own version of a relief bill. “Senate Republicans and Trump are failing to act as the economy tanks in the middle a poorly handled pandemic,” said a Democratic aide working on Senate races who requested anonymity to discuss campaign strategy on a bill still being negotiated. “We will continue to hold their feet to the fire.”