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Mitt Romney Proposes To Extend Unemployment Benefits

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Sen. Mitt Romney proposes to extend weekly unemployment benefits for three months.

Here’s what you need to know.

Unemployment Benefits

Sen. Mitt Romney (R-UT), along with Sen. Susan Collins (R-ME) and Sen. Martha McSally (R-AZ), propose to extend weekly unemployment benefits that officially expire today. Absent any last minute action from Congress, millions of Americans no longer will receive the $600 a week supplemental unemployment benefits. Congress created these federal unemployment benefits, in addition to state unemployment benefits, as part of the Cares Act, which is the $2.2 trillion financial stimulus package that Congress passed in March.

Here’s how the proposal, which is called the Federal Pandemic Unemployment Compensation Extension Act of 2020, works:

  • 3-Month Extension: Weekly unemployment benefits would be extended for three months.
  • Two Options: States can choose one of two options to extend unemployment benefits.
  • Option 1: Immediate 80% wage replacement.
  • Option 2: A declining amount of $500 per week in August, $400 per week in September or $300 per week in October.
  • Funding: $2 billion for states to update their unemployment insurance systems to process wage replacement.

The 80% wage replacement means that a recipient of these unemployment benefits could receive 80% of their weekly wages before becoming unemployed. The wage replacement would be capped at $500 a week in August, $400 a week in September and $300 a week in October. Thereafter, these unemployment benefits would expire.

“Unemployed workers should not be left in limbo while Congress continues to negotiate the next relief package,” Romney said. “Our solution extends the supplemental benefits for three months and incentivizes states to update their [unemployment insurance] processing systems. We should act with urgency to help the millions of Americans who are on the verge of losing these additional benefits.”


When does unemployment insurance end?

The $600 a week unemployment insurance benefits end today. Congress did not agree to extend these supplemental benefits before the expiration. In 49 states, recipients received their final unemployment check on July 25, and in New York, recipients last received these weekly unemployment benefits on July 26. Given the expiration, these weekly unemployment benefits will no be available any longer unless Congress decides to extend, or reinstate, these weekly, federal unemployment benefits. Could Congress act today to extend unemployment benefits? The U.S. Senate is not in session today, and senators will return Monday. If you’re unemployed, you may still receive state unemployment benefits from the state in which you last worked. In most states, the standard unemployment insurance is available for 26 weeks. However, each state sets its own unemployment insurance program, which may have different rules.


How do these unemployment benefits compare to the new stimulus package?

On Monday, Senate Majority Leader Mitch McConnell (R-KY) and multiple senators introduced the Heals Act (Health, Economic Assistance Liability Protection & Schools Act), a ~$1 trillion stimulus package proposal. The stimulus package includes, among other initiatives, second stimulus checks, unemployment benefits, school funding and more Payment Protection Program (PPP) funding. However, the Heals Act does not extend the $600 a week unemployment benefits. Rather, Senate Republicans would reduce unemployment benefits to approximately “70% wage replacement.” A 70% wage replacement means that a recipient of unemployment benefits could receive federal unemployment benefits that are no more than 70% of the recipient’s income when the recipient was last employed. The wage replacement would equate to about $200 a week under this proposal. Many Republicans have believed that the $600 a week unemployment benefit creates a disincentive for recipients to return to work because, as U.S. Treasury Secretary Steven Mnuchin and U.S. National Economic Council Larry Kudlow noted, some recipients receive more money while they are unemployed compared to when they were working.


Democrats: keep $600 a week unemployment benefits

Congressional Democrats want to extend unemployment benefits through at least January 31, 2021, which would be three months longer than Romney’s current proposal. Democrats say that the economy is in recession and note that more than 40 million Americans have filed for unemployment benefits. Speaker of the House Nancy Pelosi (D-CA) said that Congress should keep the $600 a week unemployment benefits because a flat, weekly amount is simplest to understand and administer. The Romney proposal would provide $2 billion in new funding to help states administer the wage replacement. Sen. Ron Wyden (D-OR) has proposed that Congress extend unemployment benefits based on a state’s unemployment rate.


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