Nutty Idea: How About 'Rona Unemployment Benefits That Last As Long As 'Rona Unemployment?

Another installment of Ideas That Make Too Much Sense.

Senate Minority Leader Chuck Schumer (D-NY) and Sen. Ron Wyden (D-Oregon) introduced a nifty plan today that would extend the emergency unemployment benefits that were part of April's big coronavirus relief bill, the CARES Act. Those $600 per week payments are set to expire at the end of July, but the economic downturn is still very much with us, with a national unemployment rate for May of 13.3 percent and a new wave of COVID-19 outbreaks putting the brakes on reopening plans all over the place.

And since one of the biggest things we've learned from the viral clusterfuck that reopening has been trying to rush an opening when nothing's actually ready, the bill would tie the benefits' phase-out not to a specific schedule, but instead to the unemployment rates in each state , which would take some of the politics out of future tussles over recession relief. Politico calls it "the most prominent effort yet to expand federal policies that kick in automatically during a recession."

In the Schumer-Wyden plan, the extra weekly $600 in emergency unemployment benefits (over existing state unemployment insurance) would be phased out incrementally as states' unemployment rates start going below 11 percent.

Each percentage point drop in the rate, based on a three-month average, would correspond to a $100 decrease in enhanced weekly benefits, meaning at least some additional benefits would be available in a given state until its unemployment rate drops below 6 percent.

Like the supplemental unemployment benefits in the CARES Act, the extended benefits would be available to gig and part-time workers, and to independent contractors and the self-employed, regardless of whether state benefits are available to those classes of workers. Thirteen weeks of emergency unemployment benefits would be available through at least March 27, 2021, and would be phased out as states' unemployment rates go below 8.5 percent and 5.5 percent. Additional weeks would be available in states that still have 8.5 percent or higher unemployment.

That still wouldn't solve every problem for folks like the Oklahomans in the photo up top, who lined up at 2 a.m. Sunday for the chance to make an appointment  to speak to someone at the state Employment Security Commission, in hopes of maybe resolving problems with their unemployment applications. But at least the federal benefit would be there for the states to fuck up on their own terms. Oklahoma, like Kentucky, is still working through a case backlog, which surely indicates how much the state values workers affected by this crisis. Hey, that makes TWO Fuck Gov. Kevin Stitt stories today!

The plan is an example of an "automatic stabilizer," a policy put in place to lessen the impact of a recession that doesn't require any additional action by Congress. For instance, lower family income makes people eligible for benefits like food stamps or Medicaid, at least until the GOP eliminates them altogether and everyone just magically gets a job in a declining economy.

In this case, the additional federal benefits are reduced or stay in place based on a state's economic indicators, smoothing out the reduction in benefits for residents of states where the recovery takes longer. As Politico notes, this can be a good thing indeed, since such policies

don't rely on Congress to agree on helping vulnerable Americans during a crisis. But they can also be more difficult to pass politically because the cost of such plans is scored by the Congressional Budget Office upfront, as opposed to a series of piecemeal extensions that would be analyzed individually.

Oh, isn't that yet another lovely legacy of the Republican obsession with budget deficits, at least when Democrats are in office? The Politico story also notes that while House Speaker Nancy Pelosi has made positive remarks about automatic stabilizers, the House's own bill for the next stage of coronavirus stimulus doesn't include any such mechanisms. Looks like now there'll be a Senate bill to merge into that, huh? Like, if Mitch McConnell ever gets around to a new round of stimmy at all.

The Labor Department's monthly unemployment report for June will be out tomorrow instead of the usual Friday release, because Independence Day. It probably won't yet reflect the most recent round of freezes on reopening, so if Republicans start crowing that no extension of emergency unemployment is even needed, you just stare them icily in the eye and point to the infection rates in state after state. They'll completely ignore you, but you can at least have some data behind your rage.

[ Politico / Brookings Institution / Oklahoma City Free Press / Photo by Nathan Poppe on Twitter, used by permission]

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