Republicans face looming unemployment dilemma

Forty million Americans are unemployed and extra unemployment benefits expire at the end of next month. Meanwhile, Senate Republicans are grappling with deep ideological divisions over what to do with the popular program in the middle of a pandemic and an election year.

Most Republicans have roundly rejected the House Democrats’ approach of extending a $600 weekly boost to unemployment checks though January 2021, and some say the enhanced benefits may need to end altogether.

Sen. Pat Toomey (R-Pa.) said “it might” need to go back to the normal state unemployment benefits, and Sen. Rand Paul (R-Ky.) said the additional funds were a “terrible idea [that] never should have passed in the first place.”

Many Republicans think the extra money makes it less enticing for Americans to go back to work — already a concern for people considering the dangers of being infected by coronavirus in the workplace.

“We’re never going to recover economically from the pandemic if everybody is at home watching Netflix,” said Sen. John Kennedy (R-La.). “The way we’re doing it now … has as much chance of passing as my son has of getting a Porsche for his birthday. Not going to happen. Nonnegotiable.”

Fights over unemployment benefits amid a recession have long been politically charged, pitting the need to aid a reeling population against Republicans’ decadeslong efforts to shrink government. And some in the GOP concede that Congress can’t just cut off that relief money cold turkey.

Particularly if Senate Republicans want to hold on to their majority in November, they risk being seen as giving short shrift to so many jobless Americans three months before the election.

“The unemployment rate is still going to be pretty high, maybe for some time. Even as the economy starts to open up and expand again, it will take a while for some of the jobs to come back,” said Senate Majority Whip John Thune (R-S.D.). “So I suspect the program will be needed for a while. We’ll have to come up [with] some sort of solution.”

A small-business aid program was set to expire on June 30, but the Senate passed legislation Wednesday to extend it, so the July 31 deadline on enhanced unemployment benefits is now seen by Senate Republicans as the likely driver for action on the next package. The House passed a $3 trillion coronavirus bill in May that has no prospects in the Senate.

But the Senate goes on recess for two weeks in July, meaning crunch time starts now. Senate Republicans are discussing a proposal from Sen. Rob Portman (R-Ohio) to provide workers extra money when they go back to work or a gradual decrease of the $600 weekly benefit over time. Others, like Sens. Josh Hawley (R-Mo.) and Cory Gardner (R-Colo.), have proposed subsidizing payrolls as a way of decreasing unemployment but keeping workers’ salaries.

But no Senate Republicans interviewed for this story — even the two who supported the $600-a-week benefit in March — said they support simply renewing it again. Asked whether he will again endorse the bonus unemployment benefits, Gardner said he will “continue to support American families and American workers.”

And Sen. Susan Collins (R-Maine) said she supports keeping enhanced benefits but capping them at workers’ previous salaries.

“We should make people whole, but they should not be better off not working than working,” she said.

Gardner and Collins are the only Senate Republicans up for reelection in blue states, and that even they are at odds with House Democrats suggests a chasm so deep it could bring down the benefit program altogether.

“There’s some inclination that we may be willing to taper it off rather than end it. But that may not be good enough for Democrats, so it could be that it just goes away,” said Sen. Roy Blunt (R-Mo.).

Some economists argue that an extra $600 per week is an efficient economic stimulus, since the money is likely to be quickly spent and pumped back into the economy. And there is little debate among Senate or House Democrats about extending the program.

“That’s been an essential lifeline for millions of Americans,” said Sen. Chris Van Hollen (D-Md.).

But Republicans have been arguing now for weeks that spending more money is less effective than reopening the economy. They say the small business Paycheck Protection Program has been made less efficient by the unemployment benefits.

There’s just a disagreement in the party over when to pull the plug and how quickly.

“I don’t know if we should cut it in half or do what Portman’s saying” with a rehiring bonus, said Sen. Lindsey Graham (R-S.C.), who led the charge against the $600 benefit in March. “I’m open minded. I want to help people and supplement unemployment. But not to the point where you are actually skewing the wage structure.”

Marianne LeVine contributed to this report.