GOP targets 70% wage replacement in stimulus bill, aides say

All U.S. residents are eligible as long as they have a work-eligible Social Security number and meet the income requirements. (Karin Hildebrand Lau/Dreamstime/TNS)
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By Billy House Bloomberg News (TNS)

White House Chief of Staff Mark Meadows said the Republican stimulus bill will contain an extended unemployment-benefit proposal to replace 70% of jobless individuals’ lost wages.

Appearing Sunday on “This Week” on ABC, Meadows said the proposal, to be unveiled by Senate Majority Leader Mitch McConnell on Monday, won’t revive the $600 supplemental unemployment payments that were part of the stimulus passed in March and expired last week.

“The original unemployment benefits actually paid people to stay at home” and the administration and Republican-led Senate isn’t going to do that again, Meadows said.

Of the proposal to be offered by McConnell, Meadows said, “We are going to be prepared 70% of whatever the wages you were prior to being unemployed,” adding, “hopefully to get people back on their feet.”

While Meadows didn’t offer details, such a federal approach would increase state benefits so that every jobless American would get 70% of their previous pay. States now provide an average of 45% of a worker’s previous pay.

Treasury Secretary Steven Mnuchin made similar comments on “Fox News Sunday.”

“We want to have something which pays people about 70% wage replacement, which I think is a very fair level. So it’s not a fixed number. It’s something that pays you a percentage of your wages that are lost,” Mnuchin said.

Meadows and Mnuchin will be back on Capitol Hill on Sunday for more talks on the stimulus plan.

The 70% wage replacement option has been criticized as unworkable because many state unemployment offices work with outdated technology that would make such calculations difficult. Others, including Senator Rob Portman, Republican of Ohio, and the U.S. Chamber of Commerce have called for a transition period to any new calculation. Portman wants two months during which a flat weekly payment is made that’s lower than $600.

‘Fiscal cliff’

Former Treasury Secretary Larry Summers and former New York Federal Reserve President William Dudley are among those who’ve warned of a dangerous “fiscal cliff” for the U.S. economy if unemployment compensation lapses without a replacement.

“We need to maintain a very substantial fiscal impulse in the economy for quite some number of months,” Summers said Friday.

Meadows said other parts of the expected Senate plan could include “maybe a retention credit,” as well as for money for schools, “and maybe liability protection.”

President Donald Trump is pushing schools to open classrooms in the coming weeks but many are struggling to accomplish that safely with the coronavirus still raging in many parts of the country.

House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer have insisted that the supplemental unemployment remain at the $600 a week level, and more broadly, have rejected a piecemeal approach to the stimulus package.

They’ve been criticizing Republicans for delaying their own proposal, underscoring that the House passed a far broader, $3.5 trillion Democratic plan in May.

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