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Biden OK with $300 unemployment supplement expiring

A number of GOP governors have already begun cutting off the extra benefits, citing a disincentive to fill open positions

President Joe Biden, with Vice President Kamala Harris, speaks at the White House on June 2 on the COVID-19 response.
President Joe Biden, with Vice President Kamala Harris, speaks at the White House on June 2 on the COVID-19 response. (Alex Wong/Getty Images)

President Joe Biden is comfortable with a $300-per-week federal unemployment benefit lapsing on Labor Day as scheduled.

Biden, delivering remarks on the May jobs report from Delaware Friday, said the temporary boost in unemployment benefits has “helped people who lost their jobs through no fault of their own, and who still may be in the process of getting vaccinated.”

“It’s going to expire in 90 days. That makes sense,” Biden said.

A number of economists as well as private sector contacts surveyed by the Federal Reserve in its latest “Beige Book” report on economic conditions have said generous unemployment benefits have been a contributing factor in labor shortages reported by employers, along with child care and lingering concern over health risks.

Several Republican governors have decided to stop accepting the pandemic unemployment assistance, arguing that it has discouraged workers who are receiving more money in unemployment assistance than they were paid in their jobs from returning to work.

The March coronavirus relief law extended the pandemic unemployment assistance program — initially enacted in spring of 2020 to supplement state benefits for workers who lost their jobs due to COVID-19 — to Sept. 6.

The initial federal benefit Congress enacted was $600 per week, but lawmakers let that lapse last July. When Congress finally passed another relief bill in December that renewed the program through mid-March, lawmakers halved the benefit to $300 per week.

Democrats initially planned to renew it at $400 per week, but they settled on $300 in the March law to appease moderates like Sen. Joe Manchin III. The West Virginia Democrat said at the time he would not be inclined to approve another extension.

Brian Deese, director of the White House’s National Economic Council, confirmed during Friday’s press briefing that Biden thinks it’s “appropriate” for the enhanced unemployment benefits to expire as scheduled.

Biden had proposed in his $1.8 trillion paid leave, child care and education plan looking at so-called automatic stabilizers that would tie unemployment benefits to economic conditions so that in the event of another recession, assistance would get out more quickly.

The Congressional Budget Office scores automatic stabilizers as having an enormous cost, lawmakers have said, which is among the reasons Democrats have not included them in prior relief bills.

Senate Finance Chair Ron Wyden has been among those pushing to tie unemployment assistance to economic conditions. In a statement Friday, he called cost concerns an “obstacle” to automatic stabilizers, adding that’s partly why Congress included “the arbitrary September cut off” for pandemic unemployment assistance in the last aid package.

“I’m going to continue to monitor the economic recovery, and am particularly concerned about the workers whose income would go to zero if the programs for gig workers and those who have exhausted state benefits expire,” the Oregon Democrat said. “A complete overhaul of the unemployment insurance system is the only way to effectively address these issues over the long term.”

Niels Lesniewski contributed to this report.

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