08.03.20

Pelosi And Hoyer At Odds Over Boosted Federal Unemployment Insurance Payments

House Majority Leader Steny Hoyer Agrees With Republicans, Economists, And Most Americans That We Should Not Pay People More For Not Working Than They Made On The Job, Yet Speaker Pelosi Uses Her Sunday Show Appearance To Throw Him Under The Bus

 

Speaker Pelosi Dismisses Majority Leader Hoyer Agreeing With Republicans That There’s ‘Legitimate Concern That People Are Making More On Unemployment With The $600 Additional’ And His Claim That ‘It’s Not $600 Or Bust’

ABC’s MARTHA RADDATZ: “House Majority Leader Steny Hoyer was asked this week if you might be willing to settle for a smaller amount than the $600 in federal aid to the unemployed. And he said to say that it’s $600 or nothing, no that is not what we are. So, anything less than $600 is not a deal-breaker?”
HOUSE SPEAKER NANCY PELOSI (D-CA): “No, the fact is, the amount of money that’s given as an enhancement for unemployment insurance should relate to the rate of unemployment. So, as that goes down then you can consider something less than the $600, but in this agreement it’s $600. And, again, they’re subjecting somebody who might be -- oh, they say, oh, people are staying home, the data doesn’t support that. Yes, they might anecdotally have examples ...” (ABC’s “This Week with George Stephanopoulos,” 8/2/2020)

  • RADDATZ: “I want to go back to that $600 and people staying home. Hoyer also said there’s an argument to be made that the additional $600 in federal assistance is, as some Republicans have argued, a disincentive for some to go back to work. Do you think there is any validity to that?
  • PELOSI: “No. I have the statistics.… But the $600 is essential.” (ABC’s “This Week with George Stephanopoulos,” 8/2/2020)

Just Last Week, Hoyer Said, ‘That’s An Argument That … Has Some Validity To It’ And ‘To Say That It’s $600 Or Nothing, No, That’s Not Where We Are’

CNN’s JOHN BERMAN: “One of the things that Republicans -- some Republicans say is that $600 serves as a disincentive to go back to work. It is more in some cases than they say that people were making at the beginning. So what do you say to that?”
HOUSE MAJORITY LEADER STENY HOYER (D-MD): “And I think that’s an argument that is -- has some validity to it. And we ought to deal with that. And there is a way to deal with that. But not this way. Not cold turkey. Not here you have it, now you don’t.” (CNN’s “New Day,” 7/28/2020)

  • BERMAN: “I just want to make sure I’m hearing you correctly. It does seem like you might be willing to come off some from $600. Not to $200, but you’re not demanding $600 or bust?”
  • HOYER: “Look, it’s not $600 or bust. You know, you don’t -- Speaker Pelosi said the other day, which I thought was a great line, ‘we don’t have red lines, we have values.’ We are going in to these negotiations with values. To say that it’s $600 or nothing, no, that’s not where we are. We are prepared to discuss this.” (CNN’s “New Day,” 7/28/2020)
  • HOYER: “I think there’s a legitimate concern that people are making more on unemployment with the $600 additional than they made in their employment and therefore are reluctant to go back…” (MSNBC, 7/13/2020)

 

In Addition To Hoyer, Many Other Prominent Democrats Have Agreed With Republicans That Unemployment Benefits Should Not Discourage Americans From Going Back To Work

SEN. BEN CARDIN (D-MD): “But we need to extend the unemployment insurance benefits. What is the right number? Well, we certainly understand we don’t want to have higher benefits than what someone can make working, but that $600 was so desperately needed by so many families. So, let’s make sure that we do what’s right for those that are unemployed and for our economy.” (Fox News, 7/27/2020)

SEN. CHRIS COONS (D-DE): “Well, Steve, I’m not going to negotiate with you against what has already been passed by the Democratic majority in the House two months ago. I do think that finding some path forward between a Republican position of we won’t extend unemployment benefits at all, and the $600 a week, that 30 million Americans are relying on, we should had been doing this over the last couple of weeks that we’re now up against this deadline frankly is an irresponsible failure to lead by Republicans. I do think we should find some path forward that provides support for millions of Americans who are and will remain unemployed, while also providing incentives for folks to return to work.” (MSNBC, 7/24/2020)

GOV. NED LAMONT (D-CT): “I think sometimes it discourages work… I would put off this extra $600 true-up they’re talking about… I don’t think we need that.” (“Gov. Ned Lamont Says Extending $600-A-Week Federal Jobless Benefit May ‘Discourage Work,’” Hartford Courant, 6/17/2020)

“Even some Democrats on the Senate Finance Committee have privately expressed concern about the potential for the benefit to disincentivize work, The Washington Post previously reported.” (“White House Signals Openness To Unemployment Compromise As Crucial Deadline Looms For 30 Million Americans,” The Washington Post, 7/14/2020)

 

Polls Show Nearly Two-Thirds Of Americans Agree That ‘Enhanced Jobless Benefits Discourage People From Going Back To Work’

“Two-thirds of Americans (62%) also think the enhanced jobless benefits discourage people from going back to work. Even among unemployed Americans, nearly half (46%) say they would avoid returning to work if the benefits are continued past July 31.” (“Yahoo Finance And The Harris Poll Uncover America’s Sentiment On COVID-19 Economic Stimulus,” The Harris Poll, 7/13/2020)

 

Studies By Economists And The CBO Find Significant Numbers Of Workers Making More With The Addition $600 Unemployment Benefit Than They Did In Their Previous Jobs

A University Of Chicago Working Paper Found 68% Of Unemployed Workers Eligible For Unemployment Insurance Will Receive Benefits Exceeding Their Wages

UNIVERSITY OF CHICAGO Working Paper: “The Coronavirus Aid, Relief, and Economic Security Act (CARES) Act substantially expanded Unemployment Insurance (UI) in order to help workers losing jobs as a result of the Covid-19 pandemic. One provision of the act creates an additional $600 weekly benefit known as the Federal Pandemic Unemployment Compensation. The size of the payment—$600—is designed to replace 100 percent of the mean U.S. wage when combined with mean state UI benefits…. We find that 68% of unemployed workers who are eligible for UI will receive benefits which exceed lost earnings. The median replacement rate is 134%, and one out of five eligible unemployed workers will receive benefits at least twice as large as their lost earnings.” (Peter Ganong, Pascal Noel, and Joseph Vavra, “US Unemployment Insurance Replacement Rates During the Pandemic,” University of Chicago, 5/2020)

CBO Estimated That Extending The $600 Benefit Increase Would Result In Roughly 5 Of Every 6 Recipients Getting Benefits That Would Exceed Their Weekly Earnings

“[T]he Congressional Budget Office has examined the economic effects of extending the temporary increase of $600 per week in the benefit amount provided by unemployment programs…. CBO estimates that extending that increase for six months through January 31, 2021, would have the following effects: Roughly five of every six recipients would receive benefits that exceeded the weekly amounts they could expect to earn from work during those six months.” (Phillip L. Swagel, Congressional Budget Office Director, Letter to Sen. Grassley, 6/04/2020)

A Bipartisan Group Of Economists, Including Two Former High-Level Obama Administration Officials, Acknowledged The Weekly Benefit ‘Replaces More Than 100 Percent Of Lost Wages For About Two-Thirds Of Workers’ And Recommended Reducing It To Avoid The Scenario Where ‘A Worker Receives More Money From Unemployment Insurance Than What They Were Making On The Job’

JASON FURMAN, Former Obama White House Council of Economic Advisers Chairman, TIMOTHY GEITHNER, Former Obama Administration Secretary of the Treasury, GLENN HUBBARD, Former Bush White House Council of Economic Advisers Chairman, and MELISSA S. KEARNEY, Brookings Institution Senior Fellow and University of Maryland Economics Professor: “[T]he $600 federal weekly benefit provided through the program currently replaces more than 100 percent of lost wages for about two-thirds of workers…. This would be a problematic system going forward, especially as the unemployment rate starts to fall. Optimal unemployment insurance requires balancing the desire to help households smooth their consumption against the moral hazard of unemployment insurance discouraging work…. [W]e recommend replacing the Federal Pandemic Unemployment Compensation after July 31 with a new system that provides a federal unemployment benefit, in addition to state benefits, of up to 40 percent of covered wages with a maximum federal UI benefit of $400. For workers making up to the median wage this would replace about 80 to 90 percent of their wages when combined with regular state replacement rates…. Defining the federal bonus as a replacement rate rather than a flat dollar amount avoids the scenario in which a worker receives more money from unemployment insurance than what they were making on the job.” (Jason Furman, Timothy Geithner, Glenn Hubbard, and Melissa S. Kearney, “Promoting Economic Recovery After COVID-19,” The Aspen Institute Economic Strategy Group, 6/16/2020)

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SENATE REPUBLICAN COMMUNICATIONS CENTER

Related Issues: Economy