Florida Republican Sen. Rick Scott and a group of conservatives erected a roadblock on the swift passage of a massive, $2 trillion coronavirus relief bill on Wednesday afternoon, arguing that the bill’s increased unemployment benefits will discourage people from working or trying to find a job.
Scott, South Carolina Republican Sens. Lindsey Graham and Tim Scott, along with Nebraska Republican Sen. Ben Sasse, objected to the bill’s $600 per week increase in unemployment benefits in addition to benefits currently offered by a worker’s state. The conservative Republicans said unemployment benefits should be capped at a worker’s current income, as opposed to a $600 per week increase that could lead to unemployment being temporarily more lucrative for some workers than keeping their job.
Increasing unemployment benefits during a government-induced recession to fight the spread of coronavirus was a major component of the far-reaching legislation that has yet to be finalized — and was in fact included in earlier versions of the bill.
“We have a virus and we know people can’t work for a variety of reasons,” Rick Scott said. “We got to help them but at the moment we go back to work, we cannot create an incentive not to work. We cannot be paying people more money on unemployment than they get paid in their job.”
But a spokesperson for Iowa Republican Sen. Chuck Grassley, who leads the Senate Finance Committee, said the $600 increase applies to every state so the benefits can be handed out quickly.
“Each state has a different [unemployment insurance] program, so the drafters opted for a temporary across-the-board UI boost of $600, which can deliver needed aid in a timely manner rather than burning time to create a different administrative regime for each state,” Grassley spokesperson Taylor Foy said. “This increase is designed to make the average worker whole. It’s also important to remember that nobody who voluntarily leaves an available job is eligible for UI.”
Treasury Secretary Steven Mnuchin, the White House’s lead negotiator on the stimulus bill, said at a Wednesday evening White House press conference that the $600 per week increase was the only way to help unemployed people quickly when many states, including Florida, cannot effectively process unemployment claims.
“Most of these state systems that have technology that is 30 years old or older. This is the only way we could assure that states could get this money in a fair way,” Mnuchin said. “Our number one issue was how do we make sure that American workers...keep getting paid. The president and vice president wanted to make sure they got money.”
Scott’s office said there’s the possibility of the Labor Department issuing a rule that would effectively cap unemployment benefits at a worker’s current income level.
But negotiators have said that implementing a cap on unemployment benefits tied to a worker’s income would be a near logistical impossibility, because each state has its own system for determining the level of unemployment benefits it doles out to workers.
The Republican senators framed their objection as a “drafting error” that could be fixed quickly by negotiators. But they want to fix the bill through an amendment vote, a process that could hold up passage of the bill.
Graham said if the $600 per week increase wasn’t a drafting error by negotiators, then “it’s the worst idea I’ve seen in a long time.”
Their objection came after days of negotiations between Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, House Speaker Nancy Pelosi and the White House. McConnell and Schumer announced Wednesday morning that they reached an agreement, though the final text of the legislation hasn’t been released.
“The key to understanding the drafting error is simple, we cannot encourage people to make more in unemployment than in employment,” Tim Scott said. “This legislation would not stop at 100 percent of your income. This legislation would allow people to make more in unemployment than in employment.”
But other Republicans, like Florida Sen. Marco Rubio, said the unemployment benefit concerns are not serious enough to prevent the bill’s swift passage.
“It’s only for four months, not forever,” Rubio said about the unemployment insurance increase. “I’m fine with it being fixed but personally I don’t believe the bill should be held up. The most damaging thing that can happen today is we don’t pass something.”
Senate leaders had hoped that Wednesday’s agreement would allow the bill to pass the Senate and head to the House of Representatives in a matter of hours as opposed to days. If any of Rick Scott, Tim Scott, Graham or Sasse demands a formal vote on the entire bill, the process could stretch into days.
In response to Scott’s demands, Vermont independent Sen. Bernie Sanders released a statement saying he will slow down the bill’s passage over his concerns about money given to corporations, unless the Republicans drop their demand.
“Unless these Republican senators drop their objections, I am prepared to put a hold on this bill until stronger conditions are imposed on the $500 billion corporate welfare fund to make sure that any corporation receiving financial assistance under this legislation does not lay off workers, cut wages or benefits, ship jobs overseas, or pay workers poverty wages,” Sanders said in a statement.
But Mnuchin said he’s hopeful a standoff won’t be necessary and Senate Republicans and Democrats will agree to pass the bill quickly.
“I would say our expectation is this bill passes tonight and gets to the House tomorrow,” Mnuchin said.