• Many of the provisions of the $2.2 trillion CARES Act sunset at the end of the month
  • Republicans are split over whether to extend supplemental unemployment benefits to those who were laid off as a result of the pandemic
  • The next round of relief is expected to include another round of one-time payments to taxpayers

The Senate was home for the weekend Friday, leaving millions of unemployed Americans wondering how they will make ends meet once the $600 weekly coronavirus boost to unemployment benefits expires after next week’s checks are issued.

Senate Republicans and the White House spent several days wrangling over the next coronavirus relief package this week, but the caucus is split, meaning either further negotiations will be necessary not only with Democrats but among GOP lawmakers, as well, as coronavirus surges across the South and West, triggering a new wave of layoffs.

The Labor Department reported Thursday that initial unemployment claims rose last week for the first time since March as states were forced to curtail or roll back economic reopening plans.

“The trend in new UI claims has stopped declining not because unemployment benefits are too generous, but because companies have stopped calling their employees back as the virus has spiked,” unemployment expert Andrew Stettner of the Century Foundation said in an email to International Business Times.

“When Congress put into place the CARES Act benefits, 8.2 million workers were collecting unemployment. Taking into account the 13 million claims for pandemic unemployment assistance [which will continue through Dec. 31], there are a total of 33.8 million workers filing for unemployment this week. Given these realities, it’s preposterous that Senate leaders are floating a $100 weekly supplement at a time when there is no end in sight to economic distress.”

With the expiration of the $660 billion paycheck protection program for small businesses expired, unemployment rolls are expected to swell further.

Republicans have expressed opposition to continuing the $600 weekly stipend, saying it encourages people to stay on unemployment rolls rather than seek jobs. They want to pare the bonus to state benefits to $200 a week.

“We don’t want this to expire next Friday,” Mnuchin said. “It’s not a difficult concept. You don’t get paid more to stay home than you do when you have a job.”

Nobel laureate Paul Krugman disagreed, saying ending the payments would create a “gratuitous disaster.”

“So, we're on the brink of catastrophe because Republicans are obsessed with the idea that unemployment benefits discourage low-wage workers from taking jobs when there are no jobs to take,” he tweeted.

To compound the cash crunch, provisions in the $2.2 trillion CARES Act that imposed a moratorium on evictions and foreclosures expires July 31.

Treasury Secretary Steven Mnuchin told reporters the new round of relief likely will include one-time direct payments to taxpayers, mirroring the $1,200 checks sent to people making less than $75,000 a year after the CARES Act was adopted in March.

“We're talking about the same provision as last time, so our proposal is the exact same proposal as last time,” Mnuchin said.

It was still unclear, however, whether the income cap would be lowered. Democrats want to keep the cap at $75,000 and increase payments for children. Senate Majority Leader Mitch McConnell said he’d lay out specifics once the bill is introduced, possibly next week.

McConnell, R-Ky., said late Thursday Republicans had agreed to a framework for the bill while Sen. John Thune, R-S.D., the GOP whip, called the measure “a work in progress.”

Republicans scrapped President Trump’s demand for a payroll tax cut, which was opposed by Democrats and some Republicans.

House Democrats adopted a $3 trillion bill in May that McConnell declared dead on arrival. Republicans and the White House favor a trimmer $1 trillion target.

McConnell said the package would include stimulus checks, aid for schools, funds for testing, changes to unemployment benefits rules, funds for small business and liability reform. Democrats have expressed opposition to protecting companies from lawsuits by those who are sickened by the coronavirus after returning to work.