Leader Schumer And Ranking Member Wyden Introduce Bold, New Legislation To Extend Expanded Unemployment Insurance & Require Program Continue Providing Benefits Until Each State’s Economic Conditions Improve

July 1, 2020

Sens. Schumer And Wyden Call For Long-Term Unemployment Insurance Support As States Grapple With Sharp Rise In COVID-19 Cases  

New Proposal Would Take Politics Out Of Extending Unemployment Insurance And Protect Working Families’ Living Standards

Washington, D.C.—Senate Democratic Leader Chuck Schumer (D-NY) and Senate Committee on Finance Ranking Member Ron Wyden (D-OR) today introduced the American Workforce Rescue Act, bold, new legislation that would establish “automatic stabilizers” to ensure unemployment benefits remain available for working families during periods of persistent unemployment, a priority for Senate Democrats in the next COVID-19 bill. Specifically, Leader Schumer and Ranking Member Wyden’s proposal would extend the $600 increase in weekly UI benefits, which Senate Democrats secured in the CARES Act, beyond July 31st, 2020 until a state’s three-month average total unemployment rate falls below 11%. The benefit amount then reduces by $100 for every percentage point decrease in the state’s unemployment rate, until the rate falls below 6%.

These critical, enhanced unemployment insurance benefits included in the CARES Act are set to expire at the end of July 2020. Meanwhile, more than 33 million Americans are currently receiving unemployment insurance or are still awaiting benefit approval. Over-burdened, under-resourced state and local-governments are grappling with unprecedented economic turmoil—and many Americans who returned to work have again been laid off.

While enhanced unemployment benefits are set to expire in 31 days, it’s clear the unemployment crisis will not. Senators Schumer and Wyden’s legislation gives American families confidence that they will be able to draw on these vital UI benefits to pay rent and put food on the table  as long as the economic crisis continues. Expanded unemployment benefits established in earlier COVID-19 legislation remain a critical lifeline for workers and families. All Americans—particularly lower-wage workers and communities of color ravaged by COVID-19—must remain equipped with the resources needed to stay afloat during the current, pandemic-fueled economic crisis, and the recovery period to come.

Senators Schumer and Wyden’s bold, new legislation would extend critical unemployment benefits in each state based on economic conditions—not arbitrary cut-off dates established by Congress that disregard need. The American Workforce Rescue Act also extends the 13 weeks of extended benefits provided by the Pandemic Emergency Unemployment Compensation (PEUC) program in the CARES Act until March 27, 2021, and these benefits will remain available for as long as a state’s unemployment rate is above 5.5%, with the number of weeks of benefits available increasing by 13 for each percentage point the unemployment rate increases between 5.5% and 8.5%. Additionally, the bill extends other critical unemployment benefits included in the CARES Act, including the Pandemic Unemployment Assistance (PUA), which provides coverage to the self-employed, gig workers, and others who are not eligible for traditional unemployment insurance, through March 2021, after which the benefits are tied to states’ unemployment levels.

Coronavirus relief must meet and reflect the country’s economic condition. Leader Schumer and Ranking Member Wyden’s American Workforce Rescue Act meets this challenge.

“If we fail to renew the $600 per week increase in UI, millions of American families will have their legs cut out from underneath them at the worst possible time—in the middle of a pandemic when unemployment is higher than it's been since the Great Depression,” said Leader Schumer. “The American Workforce Rescue Act would tie the extension of enhanced UI benefits to economic data—not politics. As the need goes down, so will the benefits. As the need goes up, so will the benefits.”

“Donald Trump has simply given up on fighting the virus and cases are surging in state after state, with many businesses closing their doors for a second time,” said Ranking Member Wyden. “In the face of exploding outbreaks and unprecedented economic pain, it would be unconscionable to allow supercharged unemployment benefits to expire in a month. Supercharged unemployment benefits need to be extended and tied to economic conditions on the ground. Workers who have been laid off twice in four months should not have to worry about whether they’ll be able to pay rent come August.” 

A summary of the bill text can be found here and below:

Federal Pandemic Unemployment Compensation.

After July 31, 2020, the Federal Pandemic Unemployment Compensation (FPUC) benefit amount will remain at $600 for all weeks until a state’s three-month average total unemployment rate falls below 11%.  Once the unemployment rate falls below 11%, the benefit amount reduces by $100 for each percentage point decrease in a state’s unemployment rate.

Specifically:

·       While a state’s unemployment rate is at least 10% and below 11%, the FPUC benefit is $500. 

·       While a state’s unemployment rate is at least 9% and below 10%, the FPUC benefit is $400.

·       While a state’s unemployment rate is at least 8% and below 9%, the FPUC benefit is $300. 

·       While a state’s unemployment rate is at least 7% and below 8%, the FPUC benefit is $200. 

·       While a state’s unemployment rate is at least 6% and below 7%, the FPUC benefit is $100.

Pandemic Emergency Unemployment Compensation.

The Pandemic Emergency Unemployment Compensation (PEUC) program is extended until March 27, 2021, after which it will remain available until a state’s unemployment rate falls below 5.5%.  If a state’s unemployment rate exceeds 5.5%, the number of weeks of PEUC benefits available will increase by 13 for each percentage point increase in the unemployment rate, up to a maximum of 52 weeks. 

Specifically:

·       While a state’s unemployment rate is at least 8.5%, a total of 52 weeks of PEUC is available. 

·       While a state’s unemployment rate is at least 7.5% but below 8.5%, a total of 39 weeks of PEUC is available. 

·       While a state’s unemployment rate is at least 6.5% but below 7.5%, a total of 26 weeks of PEUC is available.

·       While a state’s unemployment rate is at least 5.5% but below 6.5%, a total of 13 weeks of PEUC is available. 

Extension of Enhanced Unemployment Insurance Benefits.  

The bill extends other enhanced unemployment insurance programs established in the CARES Act and the Families First Coronavirus Response Act, including the Pandemic Unemployment Assistance program (PUA), the federal financing of state work-share programs, and emergency relief for non-profits, Indian Tribes and governmental entities – will remain effective until March 27, 2021, regardless of a state’s unemployment rate. Thereafter, the programs will be available until a state’s unemployment rate falls below 5.5%.

“COVID-19 has laid bare the deep gender and racial inequities in our labor market, with Black, indigenous, and other women of color in particular bearing a disproportionate share of the economic pain,” said Fatima Goss Graves, National Women’s Law Center.  “Unemployment Insurance has been a rock for families during this time, ensuring they can follow public health guidelines and feed their families during a period of extraordinary uncertainty. This bill would both stabilize our economy and ease some of families’ anxiety and hardship by ensuring that unemployment protections wind down as the economy improves, not according to arbitrary political deadlines. Women and families are not political footballs – we owe it to them to ensure our economic protections are commensurate with the crisis we are facing.”

“Americans know that this pandemic and recession are far from behind us. To begin to match the depth and duration of the challenges we face, we need this ambitious yet reasonable plan to extend enhanced and expanded unemployment benefits,” said Indivar Dutta-Gupta, Georgetown Center on Poverty & Inequality. “It offers the clearest path forward to prevent tens of millions of people in this country from experiencing a dramatic and durable decline in living standards, and will do more to grow our economy and protect health and safety than virtually any other proposal under serious consideration by the Senate. Working people in this country deserve nothing less."

“We've all learned about the errors of letting down our guard in the face of the unprecedented COVID19 crisis. There's nothing more economically important than continuing the strong assistance of the CARES Act unemployment provisions until the economy improves,” said Andrew Stettner, Century Foundation. “With state unemployment benefits so limited especially when it comes to Black and Latinx Americans on the front lines of the health and economic crisis, adding in additional dollars through federal pandemic unemployment benefits is a matter of necessity. Senators Schumer and Wyden's proposal represents a breakthrough. It provides aid nationwide until next year and bases the level and length of federal unemployment benefits on the labor market conditions in each state. Instead of facing a stark cutoff of $600 per week on July 26, this proposal would give Americans badly needed assurance in the difficult economic recovery ahead."

“NELP applauds Leader Schumer and Ranking Member Wyden’s thoughtful approach to making sure that both the $600 Pandemic Unemployment Compensation and regular unemployment benefits are available to workers as long as the economy calls for it in order to keep workers, their families, and their communities stable, said Rebecca Dixon, National Employment Law Project. “Due to systemic efforts to cut benefits and access after the Great Recession, without these benefits, we would be left with a historically stingy, inaccessible system in states that have the highest proportions of Black and brown workers, exacerbating inequality in a period of historic loss and suffering particularly hitting those communities the hardest. Extending regular UI, PUA, and UC will help maintain stability in workers’ lives and the economy.”

###