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$600 unemployment benefits update: Why is there no extension? What happens next?

$600 unemployment benefits update: Why is there no extension? What happens next?
[Photo: Sharon McCutcheon/Unsplash]

The federal $600-weekly unemployment benefit that was authorized as part of the CARES Act coronavirus relief package in March officially ends today. Although benefits effectively ended last week for most recipients, the end date on the actual legislation is today, July 31, and lawmakers on Capitol Hill were unable to agree on a new stimulus package that would have extended the benefits. Here’s the latest update:

What happened last night?

During eleventh-hour negotiations, Senate Republicans offered a few short-term options, including one that would have extended the benefits another week. Democrats rejected that, saying instead that the scale of the COVID-19 crisis demands more sweeping action. “We had a long discussion and we just don’t think they understand the gravity of the problem,” Senate Minority Leader Chuck Schumer told reporters.

Who wants what?

Republicans want to scale back the federal unemployment benefit. A proposal they unveiled earlier this week would cap them at $200 a week. House Democrats, meanwhile, voted back in May to extend the $600 weekly benefit until the end of the year.

Adding urgency to all this is an increasingly dire economic picture across the United States, where new COVID-19 infections are still topping 64,000 a day. Yesterday, the Commerce Department said the GDP shrunk 33% last quarter, the worst drop in history. A plurality of top economists have urged lawmakers to act, saying a lapse in the extra $600 benefit would be economically devastating for the country.

What happens next?

Lawmakers left Washington for the weekend without a deal, but they have promised to keep talking by phone. “On certain issues, we made progress; on certain issues, we’re still very far apart,” Treasury Secretary Steve Mnuchin told reporters. Senate Majority Leader Mitch McConnell made a procedural move that will allow for a vote on the issue next week.

The deadlock came on the same day that the Labor Department reported 1.43 million new unemployment claims, the 19th straight week in which claims topped 1 million.

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