President Joe Biden speaks while meeting with senators from both parties at the White House on February 11, 2021.
Doug Mills-Pool / Getty Images
More unemployment benefits may be on the way, as Democrats and the Biden government seek a $ 1.9 trillion pandemic aid package.
The legislation would increase the amount of unemployment benefits that workers receive each week and extend them for several months.
House Speaker Nancy Pelosi, D-Calif., Expects a bill to be enacted in mid-March. Democrats intend to pass legislation using a budgetary measure that does not require Republican support.
The precise amount and duration of the benefits are somewhat uncertain.
It seems likely, based on several proposals, that Democrats will increase benefits by at least $ 400 a week and extend them at least until August, according to labor experts.
Extra benefits offered by the $ 900 billion aid package signed by former President Donald Trump in late December are currently scheduled to end after mid-March for some workers and after April 11 for others. Without further relief, 11 million unemployed workers would lose income support.
Biden and Democrat proposals
President Joe Biden has proposed raising unemployment benefits by $ 400 a week – bringing the total pay to about $ 739 a week for the average worker, according to Department of Labor data. He would also extend the benefits until September.
A draft proposal issued by the House’s Methods and Resources Committee this week largely reflects Biden’s plan. However, the benefits would end on August 29.
More from Personal Finance:
IRS: there are no plans to extend the tax filing deadline beyond April 15
Meet student loan takers who refuse to pay their debts
They went bankrupt in the Great Recession. Now, in the 80s, the pandemic has taken its jobs
The $ 400 weekly grant would begin after March 14, according to the House proposal. Essentially, it would increase when the current $ 300 weekly supplement ends, which means that there would be no retroactive payments at the beginning of the year.
Senator Ron Wyden, D-Ore., Chairman of the Senate Finance Committee, is pushing for a larger grant of $ 600 a week, however.
“I’m going to fight like hell to get six,” said Wyden this week.
$ 400 or $ 600?
Republicans have vehemently opposed a $ 600 weekly benefit increase since the early days of the pandemic. The CARES Act offered a $ 600 supplement for about four months until July.
Greater benefits would prevent people from returning to work, they argued, thereby increasing the unemployment rate and dampening the economic recovery.
Many studies have found that the $ 600 supplement did not make it happen during the spring and summer. In fact, it probably increased employment over that period, according to an article published on Wednesday by economists at the University of Chicago.
Senator Ron Wyden, D-Ore., Wants to increase unemployment insurance by $ 600 a week.
Andrew Harnik-Pool / Getty Images
The economy has improved since then, which means that greater benefits can create a greater disincentive for workers not to return to work, according to some economists.
“I think there are good reasons to think that the disincentive effect will be greater in 2021 than in 2020,” said Peter Ganong, an economist and assistant professor at the University of Chicago.
“But I absolutely think there should be [another unemployment supplement] in 2021, “he added, due to the continuing crisis in the labor market. The benefits are expected to decline as more Americans are vaccinated, he said.
Republican votes
Democrats do not necessarily need Republican votes in favor of a stimulus package, as they intend to approve it with a budgetary maneuver called reconciliation, which requires only a simple majority of votes to succeed.
That plan could be complicated by the House Democrats’ intention to attach a federal minimum wage of $ 15 an hour to the aid package. Senator Joe Manchin, DW.V., spoke out against the proposal, and a Democratic defector could end the chances of the bill.
“For the Senate to take that, I think, is a little more problematic,” Wayne Vroman, a labor economist at the Urban Institute, a left-wing think tank.
Congress should be wrong to extend benefits for a longer than short period, he said, to avoid the need for another potential extension.
“Whatever the end point, trying to get conservative Democrats to accept even more stimulus will, I think, be a little more difficult than it appears to be this time,” said Vroman.
Do you have a history of unemployment that you would like to share with CNBC? Send an email to [email protected].