The Trump administration is holding firm in opposition to the renewal of enhanced unemployment benefits in the next fiscal stimulus bill, as its top officials held talks with Republican allies on the details of a new coronavirus relief package.
President Donald Trump and Steven Mnuchin, US Treasury secretary, met with Republican congressional leaders Mitch McConnell and Kevin McCarthy at the White House on Monday to discuss an upcoming plan for more fiscal support, which is expected to unveiled as early as this week by Senate Republicans.
Speaking in the Oval Office, Mr Mnuchin said the White House favoured $1tn in supplemental aid. However, he said the administration did not want to see enhanced unemployment benefits continue at their current level of $600 a week, which Democrats believe to be necessary for many families in the midst of the crisis.
The House of Representatives has passed Democratic-sponsored legislation that would provide an additional $3tn in aid, but the Republican-controlled Senate has refused to consider it.
“We’re going to make sure that we don’t pay people more money to stay home than go to work,” Mr Mnuchin told reporters. “We want to make sure that people who can go to work safely can do so. We’ll have tax credits that incentivise businesses to bring people back to work.”
[The] healthcare fight against the virus itself is very obviously unfinished
Chuck Schumer, the top Democrat in the Senate, accused Republicans of dragging their feet and suggested their proposal would be insufficient to address the economic downturn.
“The country is crying out for relief,” Mr Schumer said. “The Republican bill will not even come close to meeting the moment of this great crisis.”
Mr McConnell, the Senate majority leader, was downbeat on the US’s success in containing the virus, saying the “healthcare fight against the virus itself is very obviously unfinished” and “we are nowhere near out of the woods”. He added, however, that “an indefinite total lockdown” could not be the solution.
The new recovery package should be a middle ground between “another multi-trillion-dollar bridge loan to make up for a totally shutdown economy” and “an ordinary stimulus for a nation ready to get back to normal”, he said.
The Kentucky Republican said he wanted to see more measures to support the “healthcare system” — possibly causing a rift with the White House, which is sceptical of additional funding for coronavirus testing.
Mr McConnell also said he wanted “strategic steps to help laid-off American workers get rehired” and “American families get their kids back in school in the fall”.
One of the sticking points is the question of enhanced unemployment benefits, which have put the additional $600 a week in the pockets of unemployed Americans, on top of benefits from their states, since the $2tn Cares Act was passed in March.
Democrats have said they would like to see those enhanced unemployment benefits continue, arguing they have helped Americans service their debts and put food on the table while the unemployment rate remains in the double-digits.
Republicans have countered that the enhanced unemployment benefits have dissuaded some Americans from returning to work, pointing out that in some cases recipients are earning more on unemployment than they would at their jobs.
Mr McCarthy, the House of Representatives’ top-ranking Republican, echoed Mr Mnuchin’s concerns.
“We don’t think any federal money should be spent” to create “a disincentive to work”, he said.
Mr McConnell said Republicans also planned to focus on the issue of liability for schools and businesses stemming from reopening. “We don’t need an epidemic of lawsuits,” he said on Monday.
Mr Trump has repeatedly raised the issue of a payroll tax cut, an idea that has not gained traction in Congress but will probably become a central point of the debate given Mr Trump’s focus.
Mr Trump said on Monday a payroll tax cut would be “a tremendous saving and an incentive for companies to hire their workers back and to keep their workers”.