For months, since the CARES Act was signed into law in late March, millions of out-of-work Americans have relied on an extra $600 a week in unemployment benefits to help them pay rent, buy groceries, and otherwise survive financially during the pandemic. The benefit expired on July 31—and Republicans are pushing for a new plan with dramatically lower payments. An analysis from the nonprofit Urban Institute looks at how the plan compares to the Democratic version of a pandemic aid bill. The latter, they found, would keep nearly 60% more people out of poverty.
The Republican act, dubbed HEALS ( Health, Economic Assistance, Liability Protection, and Schools), would cut supplemental unemployment payments to $200 a week until October. At that point, anyone who’s unemployed would get a maximum of 70% of their prior earnings, with the federal benefit helping raise state payments to that level. The Democratic bill, called the HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act, extends the extra $600 in unemployment benefits through the end of the year.
The unemployment supplement in the HEALS Act would be better than the limited help that states provide, since any additional money is a benefit. Urban Institute calculated that it would help keep a projected 1.8 million people out of poverty for the last five months of the year. But the UI provision in the HEROES Act would keep 3.6 million people out of poverty.
Both bills include another $1,200 stimulus check for taxpayers making less than $75,000 a year, though the HEROES Act includes more money for most families with children, and also includes taxpayers who file using taxpayer ID numbers rather than Social Security numbers (in other words, many undocumented workers). This part of the HEALS Act could keep a projected 6.2 million people out of poverty; the HEROES Act would increase that number to 8.3 million. The HEROES Act also includes an expansion of SNAP benefits for food, a provision that could keep 1.7 million people out of poverty. In total, the analysis suggests that the HEALS Act would keep 7.7 million people out of poverty, but the HEROES Act would increase that to 12.2 million.
Republican lawmakers argue that it’s a problem that some low-wage Americans have been making more, with the $600 benefit, than they were when they were employed. Unemployment benefits are typically low to incentivize people to get back to work. Of course, the current situation is different. “When this was initially passed, we had stay-at-home orders,” says Gregory Acs, vice president of income and benefits policy at the Urban Institute. “We didn’t want people out there leaving home. Part of it was precisely to let people be safe at home while we got the pandemic under control.” Of course, that hasn’t exactly happened: The U.S. now has more than 4.7 million coronavirus cases, more than any other country in the world, and many public health experts argue that to save lives, everything should shut down again. Expanding unemployment benefits temporarily during the crisis could help make that possible.
Acs also argues that the fact that some workers made more money with the supplemental benefit—making them better able to handle basic bills—is a sign of a problem with the larger system. “It really is a statement on how poorly paid many people in the low-wage labor market are,” he says. “Yes, the supplement does pay more than what some low-wage workers make. Is that an indictment of the supplement, or is that indictment of our wage structure and our minimum wage?”