New Dems Propose Tying Expanded Jobless Benefits to Economic and Public Health

May 8, 2020 by Dan McCue

WASHINGTON – Rep. Derek Kilmer, chairman of the New Democrat Coalition, joined with Rep. Don Beyer this week to release a draft framework for the Workers’ Relief and Security Act, bicameral legislation that would tie ongoing expanded unemployment benefits to the public health emergency and economic conditions.

The bill sponsored by Rep. Beyer, who is also a member of the New Democrat Coalition, would use automatic triggers to ensure that assistance continues to flow to workers for the duration of the pandemic and the resulting economic crisis even in the absence of action by Congress.

The legislation specifies that for the duration of extreme social distancing (tied to the president’s emergency declaration issued in March or a governor’s declaration), workers will face no limits on the benefits they can currently receive under the CARES Act, and benefits will continue for the duration of an economic crisis.

“In the face of an historic crisis, the federal government must take extraordinary steps to give the American people sustained help and prevent this economic downturn from becoming a depression,” said Beyer, a Virginia Democrat.

“This pandemic and the resulting economic crisis may continue to inflict horrifying suffering on the country for many months to come,” he continued. “Passing emergency relief legislation that incorporates automatic triggers would have the enormous benefit of ensuring assistance continues to flow to workers even if Congress itself is unable or unwilling to act.”

Beyer added: “I have had many conversations with colleagues about the ideas contained here, and expect them to receive strong consideration in ongoing discussions about future pandemic response legislation.”

Specifically, the framework says:

  • A worker who exhausts their traditional unemployment compensation benefits (funded by the state) will be able to receive additional unemployment benefits fully financed by the federal government without limit until 26 weeks after the end of extreme social distancing;
  • A worker receiving Pandemic Unemployment Assistance (PUA) benefits for those who do not qualify for traditional UI will also not face limits on the number of weeks they can draw benefits until 26 weeks after the end of the Public Health Emergency.
  • Workers receiving the extra $600 in weekly benefits (Federal Pandemic Unemployment Compensation (FPUC)) will continue to receive it until 30 days after the end of the president’s emergency declaration, after which it will begin to phase down over 13 weeks.
  • Extended benefit periods and FPUC payments of various amounts will then continue to be available for the duration of the economic crisis, tied to national and state total unemployment rates (TUR).

“Since the onset of this pandemic, we’ve seen a repetition of the scene from ‘Jaws,’ where they acknowledge, ‘We’re gonna need a bigger boat,’” said Rep. Kilmer, of Washington State.

“That’s why the New Democrat Coalition believes automatic stabilizers need to be built into coronavirus response and recovery programs to trigger assistance when and where we need it, and ensure a sustainable and robust economic recovery,” Kilmer said.

“I applaud Rep. Don Beyer for his leadership on the Worker Relief and Security Act to trigger continued unemployment compensation benefits tied to the duration and economic impacts of this crisis,” he continued. “The nature of this pandemic and economic crisis is unprecedented and has created enormous uncertainty for the American people.  A bold step like this can provide some much-needed predictability.”

The legislation has been endorsed by former Federal Reserve chairs Janet Yellen and Ben Bernanke.

“An unthinkable 30 million American workers have already been displaced by the pandemic and the count continues to rise,” Yellen said. “They need relief and support for as long as the job market remains weak. That’s not only fair. It’s essential to support an economic recovery.

“The Worker Relief and Security Act is important because it guarantees that the CARES Act’s critical unemployment benefits will remain in place for however long they’re needed,” she said.

Bernanke agreed, saying he strongly supports a plan that would tie the generosity of unemployment benefits to measures of the unemployment rate.

“Such an approach delivers help quickly and automatically as needed, without Congress having to act, and likewise winds down extra assistance as conditions improve. This approach would not only help the unemployed in a timely way, it would also tend to stabilize the broader economy by increasing purchasing power in times of high unemployment,” said Bernanke.

The New Democrat Coalition continues to advocate for the use of automatic stabilizers to ensure the American people have access to critical resources without the need for additional congressional action if conditions persist or worsen.

Last month, the coalition’s leaders sent a letter to House Democratic Leadership and chairs of the standing house committees urging them to prioritize building automatic stabilizers into coronavirus assistance.The coalition also put forward a comprehensive package of policy recommendations and priorities for inclusion in Congress’s coronavirus response and economic recovery packages, including the use of automatic stabilizers.

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