Former chairs of Federal Reserve urged lawmakers to extend the $600 unemployment benefit under the CARES Act that is set to expire this month. 

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In some states, the unemployment benefit worth $600 is set to end next week. This means that the unemployment claim starting next month will vary depending on the state where you belong. Some will receive an unemployment claim of $300 or more, but this is only for a certain period of time. 

During a remote hearing on Friday, former Federal Reserve Chair Janet Yellen told members of the House Select Subcommittee on the Coronavirus Crisis that it would be a catastrophe if the unemployment benefit will not be extended. Currently, around 32 million Americans are receiving the federal aid weekly. 

Yellen and her predecessor Ben Bernanke appeared before the Congress for the first time since they left the government. During their appearance, they praised the Trump's administration and the lawmakers for their fast response to the economic downturn.

While praising the initial action of the government, the two also offered a series of suggestions that mainly focus on the expansion of the unemployment benefits, which already helped millions of individuals who were furloughed or laid-off.

Bernanke and Yellen have become outspoken advocates for aggressive government response by both the Federal Reserve and the Congress during the pandemic.

In the previous weeks, they wrote op-eds, delivered speeches, and signed a letter to the Senate and Congress, according to a published article in NBC News.

Meanwhile, current Chairperson of the Federal Reserve Jerome Powell has been reluctant to offer advice and suggestion to lawmakers on fiscal policy. Powell's predecessor has called for bold action to expand the federal program under the CARES Act. 

Aside from extending the $600 federal unemployment benefit, Yellen is also urging the lawmakers to make sure that complementary programs like the food stamps are well funded. She further noted that the federal government should invest more in public health.

A Democratic-led HEROES Act was proposed in May that aims to extend the CARES Act. However, it was not accepted and it was replaced by a Republican-led bill that will be designed for wider recipients. Some members of the Republican lawmakers said extending the unemployment benefits would not help unemployed individuals to look for jobs. 

But for Bernanke and Yellen, tying unemployment insurance to the unemployment rate could create an economic stabilizer. They also suggested benefits on which it is based on the employee's pre-unemployment wages. This suggestion has been the practice of all states in the country, where they set a minimum and maximum cap based on the salary. 

Bernanke and Yellen have a wide experience in dealing with unemployment and recession. During the Great Recession in 2008, Bernanke headed the Federal Reserve, while Yellen was the Vice-chair. Their comments on Friday were based on their experiences in 2008. 

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