Mitch McConnell says next coronavirus bill will not extend enhanced unemployment benefits

Senate Majority Leader Mitch McConnell said the next coronavirus bill would not extend beefed-up unemployment insurance enacted as the pandemic ravaged the U.S. economy, according to a source familiar with his remarks. 

The Kentucky Republican made the comment Wednesday on a call with House GOP lawmakers as he talked about priorities for the next phase of the outbreak response, Politico first reported. The $600 per week federal unemployment benefit, which adds to the sum individuals normally get from states, will expire at the end of July. 

House Democrats passed a $3 trillion rescue package last week that would extend the financial backstop through January. Their efforts to sustain the more generous assistance come as new government data shows more than 38 million people have filed jobless claims since widespread closures designed to slow infections began in March. 

McConnell has questioned the need for more immediate federal spending. He has said he wants to first see how effective the more than $2.5 trillion already passed is in combating the crisis. Some Senate Republicans have argued the enhanced unemployment insurance could deter work because, in certain cases, individuals receive more money than they otherwise would have made at their jobs. 

But failing to extend the benefit could leave millions of Americans facing a sudden income cliff in August in an economy where employers may still be unable or reluctant to hire. While “there is some concern” the additional payments could discourage people from looking for work, many people likely will not have job options as the economy slowly recovers, said Demetra Nightingale, an institute fellow at the Urban Institute. 

“The added benefit is an important source of income for many workers and families in this difficult time, with few job options. It may be too soon to end the $600 enhancement,” she said in an email. 

Some have also questioned how cutting off the strengthened insurance will affect consumer spending. For instance, Walmart CEO Doug McMillon told CNBC on Wednesday that he saw a period in the company’s better than expected first quarter “driven by stimulus money in the U.S. more than anything else” as certain parts of the business “started to take off.” The government sent payments of up to $1,200 to most individuals as part of the March bill. 

The question of whether to extend the federal unemployment benefit embodies a partisan gulf over how to clean up the economic wreckage left by the health crisis. Republicans at the state and federal level have generally showed more comfort with rebooting businesses than Democrats have.

McConnell’s priorities for another coronavirus bill include expanded testing and liability protections for doctors and businesses as the economy restarts. Democrats have criticized the potential to create broad shields from lawsuits. 

At the same time, McConnell has opposed the House Democratic push to send nearly $1 trillion more in relief to state and local governments facing budget crunches due to the virus. While the White House has signaled willingness to approve another round of stimulus checks for Americans, it is unclear if Senate Republicans would back more direct payments. 

Most U.S. states have at least started the process of reopening their economies after lockdowns left businesses shuttered for weeks. They have tried to strike a delicate balance in reopening, as new Covid-19 cases have not abated in some states such as Texas that have relaxed restrictions. 

U.S. cases now top 1.5 million, and the disease has led to more than 93,000 deaths nationwide, according to data compiled by Johns Hopkins University. 

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