The Republican coronavirus relief plan will extend the improved unemployment insurance “based on a wage replacement of about 70%,” Treasury Secretary Steven Mnuchin said Thursday.
He spoke to CNBC about the status of the negotiations hours after Republicans in the Senate and the Trump administration said they reached a tentative agreement on the legislation, which they say will serve as a starting point in talks with Democrats. Congress faces pressure to pass an aid package, as the Covid-19 case and death counts are increasing across the country, and the $ 600 per week unemployment benefit expires at the end of the month.
It is unclear how Republicans would structure the plan to provide a 70% salary replacement. Lawmakers chose the sum of $ 600 per week in the March bailout package because they decided that outdated state unemployment systems were unable to handle payment processing for 100% of a worker’s previous wages.
As of Wednesday afternoon, the Republican Party was considering cutting the fringe benefit from about $ 600 to $ 100 a week for the rest of the year, sources told CNBC. The negotiators had made no final decision at the time.
United States Secretary of the Treasury Steven Mnuchin testifies at Senate Small Business and Entrepreneurship hearings to examine the implementation of Title I of the CARES Act on Capitol Hill in Washington, DC, June 10, 2020.
Kevin Dietsch | Pool via Reuters
Speaking to CNBC after Mnuchin’s comments, House Majority Leader Steny Hoyer, a Democrat, said replacing 70% of wages is not “the policy we must follow.” He said “if we’re going to reduce that, it should be over time.” But he added that “it is not a decisive factor.”
Senate leaders hope to publish their legislation as soon as Thursday, but the bill is just one step in what could be an arduous process to pass a package to boost a health system and economy devastated by the pandemic. As Democrats and Republicans try to resolve a series of disagreements, and Republicans try to reach a consensus even among themselves, millions of Americans wait to see if they will have enough money to pay for food and housing.
Mnuchin spoke just before the Labor Department said initial jobless claims topped 1.4 million last week, the eighteenth consecutive week totaled more than 1 million.
Here are other provisions of the Republican plan, according to Mnuchin:
- $ 105 billion to help schools reopen, with funds dependent in part on reopening of schools
- The Treasury secretary said a payroll tax exemption, which Trump has repeatedly lobbied for, “will not be on the base bill.”
- A specific additional round of the Paycheck Protection Program, with “second checks” for certain companies whose income is down more than 50%
- $ 16 billion in new funding for coronavirus testing
- Tax credits to encourage companies to hire workers
- More flexibility for state and local governments in the way they spend federal aid, but there is no new aid.
- Direct payments to individuals (although you did not specify the amount paid or eligibility)
The Republican Party will need Democrats to sign any plan, as they control the House and have the ability to block the Republican proposal in the Senate.
Republicans want the package to cost approximately $ 1 billion. House Speaker Nancy Pelosi, a Democrat from California, called that level of spending insufficient to address the economic and health crisis created by the pandemic.
It seems unlikely that Congress will meet a deadline to extend the $ 600 per week enhanced unemployment benefit approved in March, which expires at the end of the month. The weekly sum has helped rescue tens of millions of unemployed Americans, while many companies are closed to slow the spread of the outbreak.
This story is unfolding. Please check for updates.
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