Unemployment Benefits May Be Cut as High as $400, GOP Leaders Said
Millions of unemployed Americans are grappling to survive after the COVID-19 pandemic led to a wave of job losses and furloughs. This week could pose another challenge as the $600 unemployment benefit ends soon.
In the United States, Congress may announce a decision on whether an extension of the weekly benefits is possible. The relief program would not expire until July 31. But the coming week will be the last for which benefits are paid, the CNN reported.
Unemployed Americans could still get benefits from the state. However, the end of the $600 weekly payments could leave millions of people with thousands of dollars less each month.
Am I getting more benefits?
Aides interviewed by the Washington Post said GOP leaders are currently discussing extending the benefits. But the amount could be cut to $200 or $400 a week.
Additionally, Republicans are considering limiting the benefits received by individuals who were high earners before they lost their jobs.
If the Senate decides to extend the $600 weekly payments, it is expected to run over $400 billion. The reduced benefits would cost between $200 billion and $300 billion.
The Senate Majority Leader Mitch McConnell is expected to introduce the stimulus bill that will include the federal unemployment benefit.
Will President Donald Trump sign the stimulus package?
According to a report by Masslive.com, Trump may consider vetoing the next COVID stimulus package if it does not include a payroll tax cut. He believes the tax cut would help stimulate the economy.
The president has long urged Democrats and Republicans to include a short term payroll tax cut. If included in the next bill, it could see Americans earning a slightly larger paycheck. It would also reduce the amount that goes to Social Security.
The payroll tax cut proposal does not have much support in Congress. Many senators from both parties claim the system would not be effective in spurring the recovery of the U.S. economy. Most say big corporations would receive massive tax cuts if the proposal goes through.
Forbes said the three-month payroll tax holiday could cost the government over $300 billion. The amount would occupy a large amount of the government's overall budget. Given that McConnell plans to introduce a $1 trillion relief package, there would be less room for state and city aids, another round of direct payments, and the extension of the unemployment bonus.
Granting a payroll tax cut could be the quickest way of injecting money into the pockets of Americans. However, it would leave out millions who are unemployed and not receiving paychecks.
Additionally, 7.65 percent of the payroll tax taken out of paychecks funds Medicare and Social Security programs. A cut would drastically reduce the trust funds that pay the benefits for retirees. It would also affect the funds of healthcare programs for Americans over the age of 65.
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