As the Senate negotiates the next coronavirus relief legislation, U.S. Senator Kirsten Gillibrand is urging Senate Majority Leader Mitch McConnell to extend enhanced unemployment benefits in the upcoming legislation. During the COVID-19 pandemic, 30 million people have lost their jobs, 49 states have experienced rising unemployment and with states scaling back plans to reopen businesses, unemployment numbers continue to rise. In the week ending July 18, there were 1,416,000 new unemployment insurance claims, an increase of 109,000 from the previous week. While the CARES Act authorized Federal Pandemic Unemployment Compensation (PUC), Pandemic Unemployment Assistance (PUA), and Pandemic Emergency Unemployment Compensation (PEUC) those benefits are set to expire on July 31. In a letter to McConnell, Gillibrand called for these benefits to be extended to provide a vital lifeline to families struggling during this public health and economic crisis.
“It’s been more than two months since the House passed the HEROES Act, which included an extension of the $600 benefits through the start of next year. Meanwhile Senate Republicans have dragged their heels and failed to come up with a viable alternative to help struggling families weather the COVID-19 crisis,” said Senator Gillibrand. “It’s urgent that the Senate extend these vital unemployment benefits in the next package as unemployment numbers continue to rise in every corner of our country. I’m urging Leader McConnell to act now to provide desperately needed relief for struggling American workers.”
Unemployment insurance benefits have been one of the most effective means of stimulating our economy in previous recessions and during the pandemic, families have relied on the federal enhanced unemployment insurance benefit to cover their health insurance, utilities, food, and rent and mortgages. Now, as the first of the month approaches and the moratorium on evictions set to expire at the end of July, millions of Americans are at risk of being evicted if they are unable to afford rent after receiving their last enhanced unemployment check. Congress must include the critical $600 per week unemployment benefit through January 31, 2021 to keep families afloat during this crisis.
States across the country—from Tennessee to Ohio to Louisiana—have warned that McConnell’s plan could lead to weeks or even months of delays in unemployment payments.
Full text of the letter can be found here and below.
July 28, 2020
The Honorable Mitch McConnell
United States Senate Majority Leader
317 Russell Senate Office Building
Washington, D.C. 20510
Dear Leader McConnell,
I write today to request that the unemployment benefits authorized in the Coronavirus Aid, Relief, and Economic Security (CARES) Act be extended until the economic crisis created shutdowns improves. Many Americans would love to be working, but are still unemployed and many families are facing an income cliff if these additional benefits are not extended. In addition, inserting new proposals at the moment the last proposal expires is logistically impossible for the vast majority of States. The unemployment system in most States is already overburdened and it could take weeks for our Sates to create programs and update software to handle fluctuating formulaic changes in benefits. As we face resurgences of the virus around the country, it is unlikely that we will reach pre-pandemic levels of employment in the near future.
According to the Bureau of Labor Statistics, the United States unemployment rate is 7.4% higher in June 2020 (11.1%) than it was in June 2019 (3.7%). This increase in unemployment has touched 49 states, highlighting that support for our workers cannot become a partisan issue. As states had to reverse their plans to reopen, in the week ending July 18, there were 1,416,000 new unemployment insurance claims, an increase of 109,000 from the previous week’s level. This increase in unemployment claims underscores the economic backslide our country is facing as the amount of confirmed cases begins to rise.
Through past recessions, UI benefits have been shown to be one of the most effective ways to stimulate the economy with approximately $2 injected into the economy per $1 received through these benefits. Furthermore, the Economic Policy Institute projects “that extending the $600 UI benefits through the middle of 2021 would provide an average quarterly boost to gross domestic product (GDP) of 3.7% and employment of 5.1 million workers.” We cannot risk losing this projected increase in GDP and related jobs this spending supports due partisan differences. With a drastic reduction in UI benefits, fiscally constrained families will be unable to purchase food and rent that will support our economy.
With 30 million Americans, about 1 in 5 working adults, drawing jobless benefits, the extension of the $600 per week unemployment benefit is critical. As we face an uncertain future, we must provide a cushion for our families and workers. As COVID-19 has reached all areas of the United States, support for Americans can no longer be a divisive issue. It is the duty of Congress to provide assistance to all of our families as the entire country is struggling in the face of a public health and economic crisis. As we enter the next phase of coronavirus relief legislation, I ask that you extend this benefit until the proposed expiration of the HEROES Act on January 31, 2021.