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Some in GOP revolt over stimulus unemployment benefit

Steven T. Dennis, Erik Wasson and Laura Litvan
Bloomberg

Several Republican senators are threatening to delay passage of the $2 trillion coronavirus stimulus package over a provision they warn would damage the economy by providing millions of people with more money in unemployment benefits than they make on the job.

Senators Lindsey Graham, Ben Sasse, Rick Scott and Tim Scott said the provision, giving workers an additional $600 per week in unemployment benefits for four months, would give employers an incentive to lay off some employees and encourage laid off workers to stay out of the job force.

“This bill pays you more not to work than if you were working,” said Graham of South Carolina, saying it would provide the equivalent of $24.07 an hour in his state to laid-off workers. The minimum wage in the state is $7.25 an hour.

He said that would “destroy what’s left of the economy.”

The senators said that could disrupt supply chains as well.

“If the federal government accidentally incentivizes layoffs, we risk life-threatening shortages in sectors where doctors, nurses and pharmacists are trying to care for the sick, and where growers and grocers, truckers and cooks are trying to get food to families’ tables,” the senators said in a statement.

A spokesperson for Senate Finance Committee Chairman Chuck Grassley, one of the primary negotiators of the provision, pushed back against the argument that the temporarily increased unemployment would encourage layoffs and workers to quit.

“Nothing in this bill incentivizes businesses to lay off employees, in fact it’s just the opposite,” Taylor Foy said in an email to Bloomberg News. “The goal all along has been, first and foremost, to help businesses make payroll so employers don’t have to lay off employees, and to ensure that there’s a robust unemployment insurance program to help those who have lost their jobs.”

The senators said at a press conference they hoped the provision, which was in drafts of legislation on Sunday, was the result of a drafting error. They asked that jobless insurance be capped at 100 percent of a laid-off worker’s salary.

Graham said he hoped the Senate would agree to revise the measure, but that he otherwise he would want a vote on an amendment to fix the provision.

It wasn’t immediately clear if their demands would be met.

The $600-per-week flat rate boost in jobless benefits was a compromise reached by Senate Republican and Democratic negotiators, as well as the Trump administration. Some of those in the talks had worried that capping the temporarily increased unemployment benefits to workers’ prior earnings would be too technically difficult. The fear was that doing so would hold up money for individuals at the height of the virus-driven economic shock.