Democrats reach agreement on unemployment benefits


Senate Majority Leader Chuck Schumer (D-NY) speaks to reporters in the U.S. Capitol on Capitol Hill in Washington on February 10, 2021.

Al Drago | Reuters

Senate Democrats reached an agreement on Friday night on how to structure unemployment benefits in their $ 1.9 trillion coronavirus aid bill so the plan can move forward after hours of delays.

West Virginia Democratic Senator Joe Manchin backed his party’s unemployment benefit proposal after his reluctance to support an earlier iteration of the plan halted Democrats’ urge to approve the measure that weekend. The disagreement over unemployment insurance threw the Senate into chaos when Democrats and Republicans called on the Conservative Democrats to endorse their proposals on unemployment.

According to NBC News, the contract will extend an unemployment benefit supplement that is currently $ 300 per week through September 6. This will make the first $ 10,200 of unemployment benefits tax-free to avoid surprise bills. The provision applies to households with an income below $ 150,000.

“We reached a compromise that will allow the economy to recover quickly while protecting those receiving unemployment benefits from unexpected tax burdens for the next year,” Machin said in a statement Friday.

Democrats will offer the unemployment change during a voting marathon on amendments known as Vote-a-Rama, which is expected to resume on Friday night. After going through an indefinite number of changes, the legislature can move closer to final adoption of the legislation.

The Democrats initially proposed unemployment benefits of $ 400 a week through August, which was passed by Parliament on Saturday. Manchin had considered endorsing a plan put forward by Senator Rob Portman, R-Ohio, to extend the $ 300 weekly surcharge through July.

The move to unemployment benefits appeared to be an attempt to appease various members of the democratic caucus. The party cannot lose a vote and still win a simple majority, the baseline, which is needed for the budget vote in the chamber, is divided evenly between parties.

If the length of aid is cut too short, there is a risk that House Democratic support will be lost when legislation is expected to return next week for representative approval through the Capitol. President Joe Biden “supports the compromise agreement,” said White House press secretary Jen Psaki in a statement Friday evening.

“Most importantly, with this deal we can advance the much-needed American bailout plan,” she said of the Democratic Aid Act.

The $ 100 a week cut in unemployment benefits seemed like a concession to the most conservative Democrats. Party leaders have already agreed to limit the number of people who would receive direct payments of $ 1,400 amid Manchin and others raised concerns about the direction of the checks.

Extending the supplementary unemployment benefits should also appeal to the Senators, led by Oregon Democrat Ron Wyden, who worried that millions of Americans would suddenly lose financial support when unemployment benefits expired in August. The provisions that promote unemployment benefits and expand eligibility for them once became obsolete last summer. Congress only renewed it in December.

Wyden has called for unemployment benefits to be tied to economic conditions so it doesn’t expire before the economy recovers. Some Republicans have spoken out against the relief bill, claiming a $ 400 weekly rise in unemployment would keep people from returning to work. They made the same argument when lawmakers approved a $ 600 per week allowance last year, but some research suggests the policy would not have a material impact on people who choose to look for work.

Democrats want to approve their latest bailout before March 14, the day the current $ 300 a week unemployment benefit expires. However, the delays on Friday threatened the expiry of the deadline.

Senate Democrats hope to pass the bill by next weekend. Republicans can drag the process out because there is no limit to the number of changes they can offer to the plan.

The House intends to approve the Senate version of the plan by next week and send it to Biden for the bill to be signed.

– CNBC’s Ylan Mui contributed to this report

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