Yellen and Bernanke urge Congress to extend rising unemployment benefits

Former heads of the Federal Reserve Janet YellenJanet Louise YellenIn The Money: Liquidity Issues Hit by COVID-19 Call for Federal Aid | Trump signs bill imposing sanctions on China for Hong Kong | The White House campaign advocates for new ‘pathways’ to jobs amid the Bernanke, Yellen pandemic to testify about the federal response to the CBO coronavirus recession: Previous COVID-19 emergency bills will add .4 billion to deficit MORE and Ben Bernanke urged lawmakers on Friday not to let a boost to unemployment benefits expire in late July and spend generously while interest rates are low to propel the U.S. through the coronavirus pandemic. .

In testimony before the House’s special coronavirus subcommittee, the two most recent former Fed chiefs warned lawmakers that the United States could face deep and permanent economic damage without more than $ 1 trillion in additional stimulus. Its emergence comes as congressional leaders initiate formal negotiations on the size and scope of another pandemic response and economic rescue package.

Bernanke, a former Republican who rejected the party in 2015, and Yellen, a Democrat, said that the next congressional stimulus measure should focus on three areas: investing in the medical response to the pandemic, extending unemployment benefits and providing local governments sufficient financial resources. Support to maintain crucial services amid strong income deficits.

“We do not believe that deficit and debt concerns should prevent Congress from responding firmly to this emergency,” Yellen said.

“The top priorities at this time should be to protect our citizens from the pandemic and seek a stronger and more equitable economic recovery,” he added.

Bernanke and Yellen have previously advocated for these positions with more than 150 fellow economists in a letter to congressional leaders last month. Her testimony also served as more forceful,. direct version from Federal Reserve Chairman Jerome Powell’s call for extended unemployment benefits and extensive help for state and local governments.

But his appearance Friday before lawmakers, the first for everyone since they left the Federal Reserve, comes as the White House and Congress face an increasingly narrow window to avoid a gap in fiscal support.

The approximately $ 2 billion Coronavirus Economic Aid, Relief and Security Act (CARES) signed by President TrumpDonald John TrumpAmash confirms he will not seek re-election of Chicago’s mayor to the White House press secretary: ‘Hello, Karen. Look at Your Mouth ‘Pentagon Reflection Plan to Ban Confederate Flag Without Mentioning It by Name: MORE Report In March, the weekly unemployment benefit in each state increased by $ 600, regardless of the level set by state leaders before the pandemic. That increase will expire on July 31, but would likely expire sooner without a last-minute agreement to extend support in any way.

The $ 600 increase is widely supported by Democrats, but they oppose the White House and most Republicans, who fear it will incentivize workers not to return to their jobs.

“You are trying to take care of unemployed people; I’m trying to get them back to work, “said the rep. Blaine LuetkemeyerWilliam (Blaine) Blaine LuetkemeyerScalise criticizes Democrats for calling on certain companies to repay PPP loans Scalise heads to China, WHO response from coronavirus monitoring hanger McCarthy reveals new Republican Party-led task force MORE (R-Mo.)

Democrats respond that most workers would lose unemployment benefits if they reject a job offer, and say the extra money is crucial as entire industries are sidelined by the pandemic.

Bernanke, Yellen and a wide range of economists have urged Congress to extend the profit increase in some way, insisting that it does more to support the economy than to curb job gains.

“You can drop $ 600 so that the replacement ratio is not more than 100 percent,” suggested Bernanke. He also proposed a special tax credit for returning workers.

He insisted that there were ways to create an “appropriate incentive to return to work without taking away support from the unemployed.”