CORONAVIRUS

US $600 unemployment benefits boost: what did Mnuchin say?

Out-of-work Americans have been receiving expanded unemployment insurance amid the coronavirus crisis, but the weekly benefits boost is set to end after July.

$600 unemployment benefits boost: what did Mnuchin say?
JIM WATSON AFP

US Treasury Secretary Steve Mnuchin says the next coronavirus relief bill is likely to place greater limits on the amount of unemployment insurance that out-of-work Americans receive, ahead of this month's expiry of an expanded benefits scheme.

$600 CARES Act benefits boost runs out at end of July

As part of the CARES Act, a $2.2tn stimulus bill signed into law in March, claimants in the US have been receiving an extra $600 a week on top of their regular jobless benefits.

However, this initiative - officially known as the Federal Pandemic Unemployment Compensation (FPUC) scheme - finishes at the end of July. An extension of the FPUC until January 2021 was proposed in the HEROES Act, a $3tn follow-up stimulus package passed by the House of Representatives in May, but the bill has faced resistance from Republicans in the GOP-controlled Senate.

"We want to incentivize people to go back to work", says Mnuchin

"You can assume it will be no more than 100% [of a worker's usual salary]," Mnuchin told CNBC when asked about plans for unemployment insurance on Thursday, in comments that reflect Republican concerns that expanded benefits can discourage people from looking for a job by potentially paying them more than they would normally earn. "We want to incentivize people to go back to work," he added.

Although unemployment insurance looks like being less generous after July, many states have however moved to extend claimants' period of eligibility for jobless benefits, which under normal circumstances typically run out after 26 weeks.

Having dropped to record-low levels at the beginning of 2020, unemployment has rocketed in the US as a result of the economic effects of the coronavirus pandemic. The jobless rate rose to 14.7% in April and, although it has since fallen, it remains at 11.1% - nearly 8% higher than February, when it was just 3.5%.

Mnuchin: "We do support another round of Economic Impact Payments"

In his interview with CNBC, Mnuchin also echoed President Donald Trump’s recent statements backing the distribution of a second stimulus check, declaring: "We do support another round of Economic Impact Payments".

However, Mnuchin would not be drawn on hints by Senate Majority Leader Mitch McConnell this week that eligibility for a second check could be narrowed from the $75,000 income limit in the CARES Act to $40,000. Mnuchin said he would talk to McConnell about the "level and criteria" for a second round of stimulus checks after Congress returns from recess, which ends on 17 July.

Live coverage of the coronavirus pandemic

As of 07:00 ET on Sunday morning, there had been 3,247,782 coronavirus cases in the United States, leading to 565,704 deaths. You can follow America-focused Covid-19 news by reading our dedicated US rolling feed.