Democrats pan Republican plan to slash jobless
benefits to $200 as 'totally inadequate'
White House officials and top Democrats negotiating a
new aid package as economy continues to reel from coronavirus crisis
Guardian
staff and agencies
Tue 28 Jul
2020 01.34 BST
Unemployment
assistance, eviction protections and other relief for millions of Americans
struggling in an economy cratered by the coronavirus crisis were at stake as
White House officials on Monday began fraught negotiations with top Democrats
on a new aid package.
Aid runs
out on Friday for a $600 weekly jobless benefit that Democrats call a lifeline
for out-of-work Americans. Republican want to slash it to $200 a week, saying
that the federal bump is too generous on top of state benefits and is
discouraging employees from returning to work.
The US
Senate’s Republican majority leader, Mitch McConnell, on Monday rolled out a
proposal worth around $1tn, amid infighting in his own party and Democrats
imploring him to come to the negotiating table.
The
Senate’s top Democrat, Chuck Schumer of New York, called McConnell’s proposed
relief package “totally inadequate”, at only about a third the size of what
House Democrats have put forward.
“It won’t
include food assistance for hungry kids whose parents can’t feed them, how
hard-hearted, how cruel,” said Schumer.
Nancy
Pelosi, the House speaker, added: “Time is running out.”
With the
virus death toll climbing and 4.2m infections nationwide, both parties are
eager for a deal.
There is
widespread agreement that more money is needed for virus testing, to help
schools prepare to open at the end of the summer break and to shore up small
businesses. Voters are assessing their handling of the virus crisis before the
November election. Donald Trump’s Democratic challenger for the White House,
Joe Biden, is ahead in many important polls, with just under 100 days to go to
election day.
And the
president’s standing is at one of the lowest points of his term, according to a
new AP-NORC poll, The Associated Press reported.
Steven
Mnuchin, the treasury secretary, and Mark Meadows, the White House chief of
staff, worked over the weekend on the GOP proposal and agreed to meet with
Pelosi and Schumer at the speaker’s office on Monday evening for talks.
The
Republicans come to the negotiating table hobbled by infighting and delays.
McConnell said he wanted to hit “pause” on new spending after Congress approved
a sweeping $2.2tn relief package in March.
But Pelosi
took the opposite approach, swiftly passing a $3tn effort with robust
Democratic support. In the intervening months, the crisis deepened.
The GOP
proposal unveiled by McConnell on Monday afternoon provides some $105bn to help
schools and colleges reopen, new money for virus testing and business benefits,
including a fresh round of loans under the Paycheck Protection Program, tax
breaks and a sweeping and controversial liability shield from Covid-19-related
lawsuits.
Elizabeth
Warren, the Massachusetts senator and former candidate for the Democratic
nomination for president, slammed McConnell for what she saw as a focus on
protecting big business at the expense of those suffering amid the crisis.
The
Republican proposal would also provide another round of $1,200 direct payments
based on the same formula from the earlier aid bill. People making $75,000 or
less would receive the full amount and those making more than $75,000 would
receive less, depending on their income. People earning above $100,000 would
again not qualify for the payment.
“Senate
Republicans have offered another bold framework to help our nation,” McConnell
said as he opened the Senate.
But
conservative Republicans quickly broke ranks on McConnell’s plan, arguing the
spending was too much and priorities misplaced. Half the Republican senators
could vote against the bill, some warned, and their opposition leaves McConnell
heading into negotiations with Pelosi without the full force of the Senate
majority behind him.
“The focus
of this legislation is wrong,” Texas Republican Senator Ted Cruz, one of the
bill’s most vocal opponents, told reporters at the Capitol. “Our priority, our
objective, should be restarting the economy.”
As
bipartisan talks unfold, the White House is now suggesting a narrower relief
package may be all that’s possible with Friday’s approaching deadlines.
The $600
weekly jobless benefits boost, which was approved as part of the March aid
package, officially expires 31 July, but because of the way states process
unemployment payments, the cutoff was effectively Saturday.
Under the
GOP proposal, the jobless boost would be reduced to $200 a week for two months
and phased out to a new system that ensures no more than 70% of an employee’s
previous pay. States could request an additional two months, if needed, to make
the transition.
Democrats
pointed to an assessment from the economist Mark Zandi, who called it a “poor
policy choice”. Zandi said that if the GOP proposal became law, nearly 1m jobs
would be lost by year’s end and the unemployment rate, now above 11%, would
climb more than half a percentage point.
Economists
widely see signs of trouble in the economy, which showed an uptick in the
spring as some states eased stay-home orders and businesses reopened, but it
now faces fresh turmoil with a prolonged virus crisis as states clamp down
again.
Friday is
also the end of a federal eviction moratorium on millions of rental units that
the White House said it wants to extend in some fashion.
At the same
time, budget watchers are wary of the rising debt load as Washington piles on
unprecedented sums in trying to contain the pandemic and economic fallout.
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