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$600 unemployment benefits boost: will it be in next stimulus bill?

As part of the CARES Act, out-of-work Americans have been receiving an extra $600 a week in jobless benefits during the coronavirus crisis.

U.S. Treasury Secretary Steven Mnuchin walks towards the White House in Washington, U.S., July 9, 2020.  REUTERS/Kevin Lamarque

A $600 weekly boost to unemployment benefits appears unlikely to be a part of the US’ next coronavirus relief package, amid Republican concerns that Americans are being discouraged from looking for work.

Extra unemployment benefits scheme runs out at end of July

Implemented as part of the CARES Act, a $2.2tn stimulus bill signed into law in March, the $600 initiative - which is officially known as the Federal Pandemic Unemployment Compensation (FPUC) scheme - finishes at the end of July.

A six-month extension of the FPUC was proposed in the HEROES Act, a $3tn bill passed by the House in mid-May, but the stimulus package has met with resistance from Republicans in the GOP-controlled Senate.

Benefits mustn't exceed worker's usual salary, says Mnuchin

In an interview with CNBC last Thursday, US Treasury Secretary Steve Mnuchin suggested that some form of expanded benefits may be included in a new stimulus bill, but that they are likely to be less generous.

You can assume it will be no more than 100% [of a worker's usual salary]," Mnuchin said, in remarks that reflect Republican worries that the FPUC deters some from seeking re-employment by paying them more than they normally earn.

"We want to incentivize people to go back to work," he said.

McConnell: $600 weekly extra has "made it harder actually to get people back to work"

Speaking in a similar vein, Senate Majority Leader Mitch McConnell last week declared that the $600 CARES Act benefits boost had been a "mistake".

"Unemployment is extremely important,” the Republican senator from Kentucky said, “and we need to make sure, for those who are not able to recover their jobs, unemployment is adequate.

"That is a different issue from whether we ought to pay people a bonus not to go back to work. And so I think that was a mistake. And we're hearing it all over the country that it's made it harder actually to get people back to work."

Unemployment at 11.1% amid coronavirus crisis

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

US lawmakers are set to debate a new stimulus bill when Congress returns from a two-week recess on 17 July.

Live coverage of the coronavirus pandemic

As of 15:30 ET on Tuesday, the coronavirus crisis had led to 3,397,069 cases and 136,117 deaths in the United States, which has by a distance been the worst-affected country in the world.

You can follow US-focused coverage of the pandemic with our dedicated rolling feed.


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