Senate Democrats Reject Portman Proposal to Extend Expanded COVID-19 Unemployment Insurance Benefits

August 6, 2020 | Press Releases

WASHINGTON, DC – This afternoon on the Senate floor, U.S. Senator Rob Portman (R-OH) offered a common-sense proposal to extend for one week the $600 per week enhanced federal unemployment insurance (UI) supplement that expired on July 31st while negotiations continue on the next COVID-19 package, and Senate Democrats rejected that proposal.  Portman also discussed several ideas for extending the enhanced federal unemployment insurance benefit without creating a disincentive to work.  

A transcript of his remarks can be found below and videos can be found here. 

“Mr. President, I think we’re all a little frustrated right now, because the negotiations on the next COVID-19 package seem to be at a standstill. And if you talk to the negotiators and you even read the press accounts, which are pretty open, what they say is that they’re deadlocked. And one of the main reasons they’re deadlocked is over this issue of unemployment insurance. Now, recall, back in the CARES Act there was an extension of a federal supplement to unemployment insurance. So we put in place a $600 federal benefit on top of the state benefit. At the time there were concerns about whether that would lead to people on unemployment insurance getting more money than they would at work, and there was actually an amendment here on the Senate floor regarding that, and although it did not pass, I think pretty much every Republican supported it with that concern. 

“In fact, that’s what’s happened. If you look at what’s happened over the past couple of months, as the $600 has been put in place, it clearly has led to people making more on unemployment insurance, often, than they can make at work. In fact, the Congressional Budget Office, which is a nonpartisan group here in the United States Congress that analyzes some of these economic issues, has said that if someone is on unemployment insurance today, they are likely to be making substantially more than someone who is not on unemployment insurance. In other words, people are making more not to work than to work. CBO says ‘roughly five out of every sixth recipient would receive benefits that would exceed the amount they would earn during those six months if you were to extend this until the end of the year.’ In other words, they’re saying 80 percent of UI recipients would make more on unemployment insurance than they would have at their old jobs, meaning that if you followed where the Democrat negotiators are and keeping $600 in place until the end of the year, that there would be an unprecedented disincentive to go to work in this country. 

“And I think that’s widely acknowledged. I mean, the University of Chicago has a study that isn’t quite 80 percent. It says 68 percent, though. I don’t think anybody disputes the fact that most people on unemployment insurance are making more than they would if they were at work. When I talk to my Democratic colleagues about that, they’re hearing the same thing I’m hearing from small business owners, by the way, from nonprofits, from employers of all size and all stripes saying it’s tough to get people to come back to work when they can make more by not working on unemployment insurance. And I think a lot of my Democratic colleagues agree, it’s good to get people back to work -- get back to work safely, yes, and we ought to be sure that the employers are following the guidelines of the Centers for Disease Control and others -- but it’s good to get people back to work, because then they’re reconnected with their health care if they have it, with their retirement savings, reconnected with training. And that connection to work is a positive thing, providing people dignity and self-respect that comes with work. So we should all be for that, right? 

“And yet, when you see what’s happening in this negotiation, this is being stalled because Democrats are being intransigent. They’re saying, stubbornly, ‘we’re going to stick to $600.’ Today, there was a press conference with Speaker Pelosi and Democratic Leader Schumer, and that’s exactly what they said. Here is the quote, ‘We have said that we’re going to have $600. This is necessary.’ So I know that that’s not where the rank-and-file are here in this chamber because I’ve talked to a number of my Democratic colleagues about this. They realize that the $600, even those who thought it might have been necessary at the time -- and I voted for the package at a time when we had unemployment that was such a shock and so high and people were in such need of immediate cash.  

“But also I have heard, again, from so many of my colleagues on both sides of the aisle that $600 is something I’m hearing about more and more back home from the employers who say ‘we can’t get people back to work.’ So the $600 is something that there needs to be some flexibility on to come up with a smarter way to ensure people can continue to get a federal supplement, because we do continue to have relatively high unemployment in this country -- in my home state of Ohio, it’s almost 11 percent unemployment. But let’s not have it be so much that people are incentivized not to work. That doesn’t help anybody.  

“There are help wanted signs all over my state. I was at a Ford plant recently where they have 25 percent absenteeism, which they attribute to this issue. I’ve been in a lot of small businesses, which is where probably most of my colleagues are hearing a lot of concerns about the fact that they can’t get people to come back who used to work for them and they certainly can’t hire the new people who they need, even though they’re reopening safely and doing everything they’re supposed to do in terms of the guidelines. And they’re having a tough time getting back to work.  

“There is an auto plant in Ohio where the white collar workers are now working on the assembly line because they can’t get enough workers to work on the assembly line who would normally have that job. This is a problem right now and I think everybody acknowledges it except the Democratic negotiators in this negotiation. Now, I don’t think we’re actually as far apart as the media accounts would suggest, because there are lots of ideas out there. One idea, by the way, that makes a lot of sense to me -- and I’m going to offer this in a moment as a resolution for the Senate to take up, and I think this is the ultimate common sense -- let’s keep $600 in place for now while we negotiate something. So let’s have an extension for another week on the unemployment insurance at $600 just so we can negotiate something. Because what you don’t want is for people to fall off the cliff, and that’s starting to happen now. 

“The $600 expired last Friday. Six days ago it expired, and six days ago, seven days ago, Martha McSally, a senator from Arizona, came to this floor and offered this same unanimous consent request saying ‘let’s just have $600 for another week,’ and Chuck Schumer objected, the Democratic Leader, instead offering the $3.5 trillion package from the House, but didn’t respond to why wouldn’t you at least give the negotiators a week to come up with something? So I’m going to offer that same thing today, because I do think it’s not fair to have a cliff. I don’t think there should be a cliff. I think people should be able to have some level, but not at $600, because that’s now understood by everybody to mean that you are dis-incentivizing work.  

“And Americans are a generous people. Back in 2008 and 2009, when we had the Great Recession, we also did this. By the way, we did $25 a week then. So for Democrats who say this is unprecedented, well, we had 10 percent unemployment back then. Very high unemployment, and we did $25. I think we should do a lot more than that now. But not so much that people are making more by not working than by working. And there are a lot of ideas out there. 

“Again, my ideas, ideas of individual members, may not be what this body chooses to use, and that’s fine. We’re not going to all get our way. But we should be able to come up with a compromise here. My idea is to have a return to work bonus so that you’re getting the $600, but then you can take some of that money back with you when you go to work. That will create an incentive for people to go back to work and connect people back to those businesses as we talked about, the importance of doing that. But there are other ideas as well.  

“There’s a plan that was put out recently by two Obama Administration veterans, former Treasury Secretary Timothy Geithner and Economic Advisor Jason Furman. They joined with a former George H.W. Bush Economist, Glenn Hubert, to put out a proposal from the Aspen Institute, hardly a conservative group, that proposes that the unemployment system, not at $600 but continue at a cap of $400 and have that amount be determined under $400 based on the state’s unemployment level and the amount workers were previously earning at work. Now the way unemployment works right now in the states is, the states have a benefit and this federal benefit is on top of it. Most states provide on average, about 50 percent of benefits. Some less than that, some more than that. Nobody more than 65 percent by the way. Whereas again, the $600, on average, is over 100 percent. It’s over 130 percent, in fact. 

“So this solution from, again, two Obama Administration economists is that you have $400 as the cap when unemployment in those states is above 15 percent and zero federal supplement when a state is at seven percent or less. It phases out entirely. That’s one bipartisan solution that’s out there. Instead of insisting on $600, I would hope that at least there’s a discussion of those kinds of proposals. Senator Romney has a proposal he’s put out there that takes the amount from $500 per week in August to $400 to an 80 percent wage replacement, phasing out altogether by year-end. Senator McConnell put his proposal out for a $200 amount over a two-month period as a transition and then to go to a percent of wages. His percent of wages is 70 percent of wages. Again, there’s no state that is that high. The states are 40 percent, 50 percent, 60 percent, in that range. 

“So there are ideas out there and yet the Democrats keep coming back again and again to this notion of, we want it all or nothing. And I will tell you my colleague from Oregon, who is here on the floor and I’m glad he is, did a very good job for the Democrats negotiating this proposal. I told him that at the time. And I know he took pride in it and he should have. But we also need now to figure out where we go going forward. None of us should want people to be dis-incentivized from going to work. We should not have this situation we have now where, again, you have the leaders on the Democratic side, Speaker Pelosi and Democratic Leader Schumer saying, ‘Today we have said that we’re going to have $600. This is necessary.’ We have to be able to show some flexibility here to be able to break this impasse to be able, yes, to provide for people who lost their jobs through no fault of their own and need some help, but not to continue to have this policy in place that doesn’t work for our economy, for small businesses, and for our workers themselves. Let’s get the politics out of this. Let’s do something that makes sense to be able to move forward on this broader crisis. And I think if we can fix the unemployment insurance issue, we’re likely to get there. 

 

“I think [Senator Dan Sullivan] made a good point. We’re not talking about a negotiation even here, we’re just talking about a week-long extension of the existing $600 per week so that we can enable people to have some certainty and predictability in their lives. I’m certainly hearing that from folks back home who are on unemployment insurance -- ‘What are you guys doing? Why can’t you come to an agreement?’ We kind of all know why. We’ve talked about it today. Democrats don’t seem interested in moving off their proposal, and they said that again today, again and again. They maybe think this is good politics, maybe they think this is something that is worth hurting these people who are looking to see am I going to get my unemployment or not. 

“I had a tele town hall last night, had a woman call in talking about her husband who works in the hospitality business and he’s lost his job. And everybody else in that business for his particular job told him, ‘Sorry, we’re just not open for business.’ He does need the help. And she didn’t insist on $600, but she said, ‘Give us some certainty that something will be going forward.’ So, that’s what this is about. This is a unanimous consent request just to say, give us a week, at $600, the full amount, in order to negotiate something that makes more sense for the economy, for small businesses and for workers. And so this Martha McSally motion which was offered earlier this week and last week, we are going to offer today. It’s a unanimous consent request. I ask unanimous consent that the Senate proceed to the immediate consideration of the bill at the desk. I further ask that the bill be considered read a third time and passed and that the motion to reconsider be considered made and laid upon the table. 

 

“I was hoping after all that there wouldn’t be an objection because I can’t believe that my friend from Oregon believes it’s not a good idea to do an extension. I mean, all we’re talking about is an extension for a week of the $600, the full amount, even though, again, all the data out there shows that amount is not practical for our economy, for workers, for businesses. And you did a valiant effort of trying to explain why you’re not for that, but I know that people who are watching just think it’s common sense. Let’s continue to discuss but let’s be sure we have, as my colleague from Alaska said, good-faith negotiations. It’s not good faith to say $600 or nothing. And that’s exactly what the negotiators have said. 

“I wish, to my colleague from Oregon, they would authorize you to negotiate. I think you and I could actually work out something and I think you probably do, too. But they have not authorized us. And the Democratic negotiators have said $600 or nothing. This notion that the one-week extension doesn’t work, absolutely it works! Are you telling me that the state unemployment offices would not provide the $600? Of course they would. There would be a lapse, of course. There would be a week or two, they say, but that $600 would be in people’s pockets. And by the way, there’s a lapse right now so that people who lost their unemployment last Friday in some states, including Ohio, continue to get it because there’s a lapse in the payment. 

“So yeah, people would get the money. Of course they’d get it. And they would be able to plan on it and have some certainty. And, frankly, if it hadn’t been blocked last week when Senator McSally stood right over here and offered it, it would be even sooner that people would get it. I say it’s one to two weeks. So for some people they would be getting it right now. So it is absolutely essential for us to figure out how to find a way forward here. It’s not, to me, an option for us to do nothing. We can’t allow this cliff to continue. But in the meantime, all we’re saying is let’s just have a little time to work it out and hopefully the Democrats will get off their $600 and realize that that’s not a path forward because it doesn’t work.  

“You’re right, when we put the $600 in place, our thought was that would be about average. In other words, it would be the average wage replacement, so that you would have half the people making a little more and half the people making a little less. That not how it worked out. Again, Congressional Budget Office, nonpartisan CBO, says more than 80 percent of the recipients are going to make more on unemployment than they would at their old jobs if you follow the Democrat proposal. And again, the University of Chicago says 68 percent. But that’s not what we intended. So certainly we should be able to adjust here and we should be able to get to yes. And my deep concern is that the negotiators are so intransigent on the Democratic side on this that we’ll end up hurting the very people that Democrats are talking about helping. So let’s come up with a sensible solution. I think there is a path here and it’s to negotiate in good faith. I think an executive order isn’t necessary if we do our work. And I think inaction, by not negotiating in good faith, is the worst possible outcome.”

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