In light of the pandemic, it was both humane and economically astute when, this past March, Congress made jobless benefits more generous through the CARES Act: The $600 a week federal supplement to state unemployment checks; the expanded eligibility for benefits; the increased number of weeks the unemployed could get support; the $1,200 direct checks to the vast majority of adults. It was all a strong start.
Then, political will eroded. The extra $600 expired on July 31, leaving millions with much less to make ends meet. In the meantime, a zombie debate over whether to renew that extra money — along with a bucket of other crucial economic benefits — dragged on for months.
Only over the holidays, once the remaining relief in the CARES Act was expiring, did Congress and the Trump administration act, approving a new $900 billion package. Now, the unemployed get an extra $300 a week and the long-term unemployed and those not normally eligible for benefits are covered, but only through early spring. Meanwhile, the eviction moratorium was only extended one month and extra food stamps only until June.
President Biden’s current plan calls for a $400-per-week federal unemployment supplement through September. But his pledge to “work with Congress on ways to automatically adjust the length and amount of relief depending on health and economic conditions” suggests he and his team are open to tweaks.
Ron Wyden, the chairman of the Senate Finance Committee, who will play a significant role in shaping any bill, used his time during Ms. Yellen’s confirmation hearing to highlight his bolder proposal to put federal unemployment benefits on autopilot, then phase it out gradually as the unemployment rate falls.
Representatives Don Beyer and Derek Kilmer and Senators Jack Reed and Michael Bennet, all Democrats, have designed similar plans. In fact, many of the strongest supporters of automatic stabilizers since the beginning of the pandemic have been moderate Democrats in the House.
Each of these plans is evidence-based and deserves to be closely considered. Policy experts like me have worked with several Congress members and their staffs for over a year on how to do this right: what economic indicators to use (whether the unemployment rate, work force participation or inflation), when to start and when to phase out the extra support.