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Unemployment benefits: what is the Democratic proposal in the latest relief bill?

Democrats want to increase the federal unemployment supplement to $400 and extend it through September as part of their $1.9 trillion coronavirus relief package.

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Unemployment benefits: what is the Democratic proposal in the latest relief bill?
ALEX EDELMAN AFP

Unemployed workers could see their federal benefits boost increase from $300 to $400 a week if Joe Biden’s $1.9 trillion American Rescue Plan is approved by Congress.

As part of the $900 billion Covid-19 relief package signed into law by Donald Trump in late December, unemployed workers have been receiving an additional federal payment of $300 on top of their normal state payments. But that extra benefit is set to end after mid-March for some workers and after April 11 for others.

With those dates in mind, Democratic lawmakers are looking to get Biden’s plan passed as soon as possible. Last week, House speaker Nancy Pelosi said the House hopes to approve the coronavirus relief bill “by the end of February so we can send it to the president’s desk before unemployment benefits expire” on March 14.

House committee approves $400 unemployment benefit

Several House committees have already started to write and advance their portions of the $1.9 trillion plan – among them the Ways and Means Committee, which gave its seal of approval to three crucial components of the relief bill: the provision for a third round of stimulus checks worth $1,400, a measure to give families up to $3,600 a year per child in the form of a tax credit, and the extension of the federal unemployment benefits.

The measure related to federal unemployment benefits approved by the Ways and Means Committee would increase the payment from $300 to $400 and extend it through August 29, 2021 (although Biden's plan calls for the extended benefits to last until the end of September).

Under the plan, programs expanding benefits eligibility to self-employed and gig workers would be maintained and the number of weeks people can receive unemployment insurance in place through the same date.

US President Joe Biden leaves the White House to spend the weekend in Camp David, on February 12, 2021 in Washington DC.

Calls for a $600 unemployment benefit

One Democratic lawmaker, Senate Finance Committee chair Ron Wyden, has said he is going “to fight like hell” to have the unemployment benefit increased to $600 a week. That is the same level as the previous CARES Act, which offered a $600 supplement for about four months through July last year. 

The payment was then dropped to $300 when Donald Trump signed an executive order in August to extend the benefit and it has since stayed at that level.

Republicans have long voiced their opposition to a $600-a-week payment, arguing that larger benefits would deter people from looking for work. However, several studies have concluded that the $600 supplement under the CARES act did not cause this to happen.

Democrats plan to bypass Republicans

Republican opposition to Biden’s $1.9 trillion plan in the Senate may not matter as Democrats aim to use a parliamentary tool called budget reconciliation, which would allow the bill to be passed with a simple Senate majority.

Following the most recent elections, the Democrats hold a 51-50 majority in the Senate, meaning if all blue Senators move to pass the relief bill, the $400-a-week unemployment benefit will likely start in mid-May, whether Republicans approve of the measure or not.