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Unemployment Claims Rise Again as Lawmakers Debate Extending Benefits

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  • At least 1.4 million people filed for unemployment last week, marking the first time claims have increased since March. The move comes as the extra $600 in unemployment benefits are set to expire next week.
  • On Wednesday, Senate Republicans announced they had agreed to a tentative $1 trillion coronavirus stimulus deal with the White House, which, among other things, included an expansion of loans to small businesses, funding for COVID testing and vaccines, aid to schools, and more.
  • The bill was supposed to be rolled out Thursday morning, but again got held up by the ongoing negotiations that have been stalled for weeks because of divisions within the Republican party.

Unemployment Numbers Spike

The government reported Thursday that 1.4 million people filed for unemployment last week, marking the first time unemployment claims have increased since March.

Separately, another 980,000 new claims were filed by freelancers, part-time workers, and others who do not qualify for state unemployment benefits but can receive aid under the emergency federal program.

Notably, the government did report that the number of continuing claims— claims filed by people who are already receiving unemployment and filed again— did drop from 17.4 million for the week ending July 4 to 16.1 million for the week ending July 11.

However, that data is reported on a week lag, and thus does not account for any of the closures or restrictions that have been put in place over the last two weeks. It also does not represent the fact that the U.S. has now reported more coronavirus cases in the last two weeks alone than in all of June.

While this week’s numbers are still much lower than the numbers reported in March before they started steadily declining, the fact that this is the first uptick since then is significant because it shows a broader trend.

“What you’re seeing is that, as the economy slows, the pace of claims picks back up — which really puts at risk the monthly jobs report over the next few months,” Joseph Brusuelas the chief economist at RSM, a multi-national network of accounting firms told the Washington Post. “The July numbers are going to be tenuous, but it’s August that I’m worried about.”

The timing of the spike is also highly relevant because it comes as the additional $600 in federal unemployment benefits are set to expire in just over a week.

In addition to the 20 to 30 million people who will lose those benefits if and when they expire, many economists have also warned that it would have a very serious effect on the already faltering economy.

“There is one clear takeaway from this morning’s unemployment insurance report –not extending the weekly $600 benefit supplement would be unconscionable,” Andrew Stettner, a senior fellow at The Century Foundation told USA Today. “Families will be evicted from their homes, poverty will soar, children will go hungry, businesses will shutter and the economy will tank.”

Meanwhile, Back in Congress

As that deadline looms, Senate Republicans and the White House are still in the middle of hashing out the details of another coronavirus stimulus package.

For weeks now, that process has been stalled by internal divisions within the Republican Party. While some of the Republicans are divided on specific issues, including unemployment, others simply do not want another stimulus bill at all.

With those negotiations getting down to the wire, Senate GOP leaders announced Wednesday that they had reached a tentative $1 trillion deal with White House officials. According to a draft summary, which was obtained by The New York Times, there are several areas the Republicans have agreed.

Among other things, the summary included $26 billion for vaccine development and deployment, $25 billion for coronavirus testing, a total of $105 billion for education— $30 billion of which would be set aside for schools that reopen, and a second round of loans to small businesses with more loan forgiveness.

Notably, the document did say that there would be another round of stimulus checks, but it did not say how much they would be or who they would go to.

Also of note is what was not in the summary. The plan explicitly states Republicans will not give any money to state and local governments to help with budget holes and layoffs, though it does note that aid will likely be added back in during negotiations with the Democrats, who want hundreds of billions to go to states and cities. 

The summary also does not include a payroll tax cut— something that was pushed by President Donald Trump for both this stimulus package and last— and something that was rejected by Democrats and Republicans both times.

Divisions Linger 

It does appear to show there has been at least some compromising between the Senate GOP and the White House. In addition to the tax cuts not being included, the increased testing and the money to schools that are not reopening are also things the Trump administration had opposed.

However, despite all that, there are still things the party is struggling to hammer out. According to reports, Senator Majority Leader Mitch McConnell (R-KY) was hoping to roll out that package Thursday morning, but was instead met with yet another round negotiations between Senate GOP leaders and the White House.

As in the earlier negotiations, one of the major sticking points reportedly still up for debate was unemployment benefits. While the Republicans agree that they want to cut the jobless payments from the current $600, they disagree on how much they should cut.

According to reports, Senate Republicans had previously floated the idea of decreasing the benefits to $200 per week. Then CNBC reported Wednesday that they were now considering extending the benefits through the end of the year at just $100 a week.

However, on Thursday morning, Treasury Secretary Steve Mnuchin said the extension will be based on 70% wage replacement, which means that the benefits would amount to about 70% of a typical worker’s income while they were employed.

According to Ernie Tedeschi, an economist in the Treasury Department under the Obama administration who spoke to the Post, a 70% wage replaced would put the extended benefits at about $175 per week.

“If they lowered it to $200 a week, 30 million workers would wake up with a pay cut from a third to a half overnight,” he said. “While $200 is marginally better than full expiration, the U.S. would still take a major economic hit from this summer and this fall as a result from it.”

While that would be on top of state unemployment, those benefits vary drastically and often fall short. According to CNN, state benefits on their own generally replace only 40% of wages.

Upcoming Battle With Democrats

As Republicans continue struggling to come to a consensus, the clock is ticking. 

With several key elements of the plan bound to a tight time table, Trump administration officials have emphasized the need to act by the end of next week.

“Let me just remind people: the time-sensitive issue we’re talking about is next Friday on unemployment and schools,” Mnuchin told reporters Thursday morning. “Some of this stuff, if it takes us a couple of weeks to work with the Democrats and agree on all the pieces we can.” 

However, according to reports, McConnell has said that that timeline as unrealistic because, right now, Republicans have not even agreed on a bill within their own party. Once they do, they still face a battle with the Democrats, who have pushed for extending the $600 through the end of the year— a provision that was included in the $3 trillion stimulus bill passed by the House in May.

Even beyond the unemployment debate, many Republicans are worried that they will not be able to get Democrats on board with their proposals at all. 

While speaking to reporters Wednesday, Sen. Kevin Cramer (R-ND) said that even if Republicans do overcome their internal divisions, they would be unable to bridge the “pretty big gap” with Democrats, who support the $3 trillion bill, which prioritizes multiple things Republicans oppose.

In order to meet some of the pressing deadlines, both Senate Republicans and Trump administration officials have said that they intend to propose a series of bills, rather than just one comprehensive package. Democrats, however, have rejected that plan.

“This is a package. We cannot piecemeal this,” House Speaker Nancy Pelosi (D-CA) said in a press conference Thursday morning. “What we have seen so far falls very short of the challenge that we face in order to defeat the virus and to open our schools and to open our economy.” 

“We’re not going to take care of one portion of suffering people and leave everyone else hanging,” Senate Minority Leader Chuck Schumer (D-NY) added at the same briefing Thursday. “This is a comprehensive proposal that addresses the many problems of COVID, and we have to address it as a totality. ” 

“One of the reasons we’re up against this cliff is because Republicans have dithered,” Schumer added, saying that he and Pelosi had urged Republicans to come to the table three weeks ago, but they never responded.

“Now the Senate Republicans have finally woken up to the calamity in our country, they have been so divided, so disorganized and so unprepared that they have to struggle to draft even a partisan proposal within their own conference, they can’t come together. Even after all this time, it appears the Republican legislative response to COVID is ununified, unserious, and unsatisfactory.” 

See what others are saying: (The New York Times) (Politico) (The Washington Post)

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Judges Uphold North Carolina’s Congressional Map in Major GOP Win

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The judges agreed that the congressional map was “a result of intentional, pro-Republican partisan redistricting” but said they did not have the power to intervene in legislative matters.


New Maps Upheld

A three-judge panel in North Carolina upheld the state’s new congressional and legislative maps on Tuesday, deciding it did not have the power to respond to arguments that Republicans had illegally gerrymandered it to benefit them.

Voting rights groups and Democrats sued over the new maps, which were drawn by the state’s Republican legislature following the 2020 census.

The maps left Democrats with just three of North Carolina’s 14 congressional seats in a battleground state that is more evenly split between Republicans and Democrats. Previously, Democrats held five of the 13 districts the state had before the last census, during which North Carolina was allocated an additional seat.

The challengers argued that the blatantly partisan maps had been drawn in a way that went against longstanding rules, violated the state’s Constitution, and intentionally disenfranchised Black voters.

In their unanimous ruling, the panel — composed of one Democrat and two Republicans — agreed that both the legislative and congressional maps were “a result of intentional, pro-Republican partisan redistricting.”

The judges added that they had “disdain for having to deal with issues that potentially lead to results incompatible with democratic principles and subject our state to ridicule.”

Despite their beliefs, the panel said they did not have a legal basis for intervening in political matters and constraining the legislature. They additionally ruled that the challengers did not prove their claims that the maps were discriminatory based on race.

Notably, the judges also stated that partisan gerrymandering does not actually violate the state’s Constitution. 

The Path Ahead

While the decision marks a setback to the plaintiffs, the groups have already said they will appeal the decision to the North Carolina Supreme Court.

The state’s highest court has a slim Democratic majority and has already signaled they may be open to tossing the map.

There are also past precedents for voting maps to be thrown out in North Carolina. The state has an extensive history of legal battles over gerrymandering, and Republican leaders have been forced to redraw maps twice in recent years.

A forthcoming decision is highly anticipated, as North Carolina’s congressional map could play a major role in the control of the House in the 2022 midterm elections if they are as close as expected. 

See what others are saying: (Politico) (The New York Times) (The Wall Street Journal)

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Biden Administration Says Private Insurers Will Have to Cover 8 At-Home Tests a Month

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The policy will apply to all the nearly 150 million Americans who have private insurance.


New At-Home Testing Policy

The Biden administration announced Monday that private health insurers will now be required to pay for up to eight at-home rapid tests per plan member each month.

Under the new policy, starting Saturday, private insurance holders will be able to purchase any at-home test approved by the FDA at a pharmacy or online. They will either not be asked to pay any upfront costs or be reimbursed for their purchase through their provider.

The move is expected to significantly expand access to rapid tests that other countries have been distributing to their citizens free of charge for months. 

According to reports, nearly 150 million Americans — about 45% of the population — have private insurance. 

Each dependent enrolled on the primary insurance holder’s account is counted as a member. That means a family of four enrolled on a single plan would be eligible for 32 free at-home rapid tests a month.

Potential Exemptions

All tests may not be fully covered depending on where they are purchased. 

In order to help offset costs, the Biden administration is incentivizing insurance providers to establish a network of “preferred” pharmacies and stores where people in the plan can get tests without paying out of pocket.

As a result, health plans that do create those networks will only be required to reimburse up to $12 per test if they are purchased out of that network, meaning people could be on the hook for the rest of the cost.

If an insurer does not set up a preferred network, they will have to cover all at-home tests in full regardless of the place of purchase.

During a briefing Monday, Press Secretary Jen Psaki said tests should be “out the door in the coming weeks.”

“The contracts [for testing companies] are structured in a way to require that significant amounts are delivered on an aggressive timeline, the first of which should be arriving early next week,” she added.

See what others are saying: (The New York Times) (NPR) (The Washington Post)

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Biden Administration Unveils Plan To Replace All Lead Pipes

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The effort builds on the $15 billion allocated under the bipartisan infrastructure bill for lead pipe replacement, but industry leaders say $60 billion will be needed for nationwide revitalization.


White House Outlines Actions on Lead Pipes and Paint

The Biden administration rolled out a sweeping plan on Thursday to remove all the nation’s lead pipes over the next decade and take other steps to prevent lead paint contamination.

Lead, which was commonly used in piping for municipal water systems all over the country until it was banned in 1978, is a dangerous neurotoxin that can cause serious nervous system damage, especially in children.

Contamination from lead pipes seeping into water supplies has caused multiple high-profile public health and environmental catastrophes over the last decade, including the notorious crisis in Flint, Michigan.

According to a White House factsheet, an estimated 10 million households are connected to water through lead pipes. Children and teenagers in 400,000 schools and child care facilities also risk exposure to lead-contaminated water.

“Because of inequitable infrastructure development and disinvestment, low-income communities and communities of color are disproportionately exposed to these risks,” the factsheet stated.

To address those disparities and revitalize water systems across the nation, the White House outlined 15 new action items the Biden administration is taking, including:

  • Launching “a new regulatory process to protect communities from lead in drinking water” through the Environmental Protection Agency (EPA).
  • Clarifying that state, local, and Tribal governments can use the $350 billion aid allocated under the American Rescue Plan to replace lead service lines.
  • Establishing federally-operated regional technical assistance hubs “to fast track lead service line removal projects in partnership with labor unions and local water agencies.”
  • Awarding federal grants through the Department of Housing and Urban Development (HUD) to remove lead paint in low-income communities.
  • Directing the Centers for Disease Control and Prevention (CDC) to expand childhood lead testing.
  • Establishing “a new Cabinet Level Partnership for Lead Remediation in Schools and Child Care Centers.”

The White House also said it will direct the EPA to allocate $3 billion for state, local, and Tribal governments to replace lead pipes through funding that was approved under the bipartisan infrastructure bill signed by President Joe Biden last month.

A Matter of Funding

In total, Congress provided $15 billion to revitalize the nation’s lead-pipe systems under the infrastructure bill. 

However, industry experts have estimated that it will cost $60 billion to entirely overhaul all the remaining lead pipes in the U.S.

As a result, the Biden administration has proposed several additional funding mechanisms in the social safety net package, known as the Build Back Better Act, that is currently being negotiated by Congress.

Specifically, the legislation would set aside $9 billion for lead remediation grants to disadvantaged communities, $1 billion for rural water utilities to remove lead pipes, and $5 billion for mitigation efforts such as removing lead-based water fixtures in low-income households.

The Build Back Better Act would additionally provide $65 billion for public housing agencies and $5 billion for other federally-assisted housing organizations to improve housing quality, including by replacing lead pipes and service lines.

The status of that legislation, as well as what provisions will remain in the final version, remain in limbo. While Democratic leadership has pushed to pass the sweeping social bill before the new year, all 50 of the party’s members in the Senate will need to sign on, and moderate Sen. Joe Manchin (D-W.V.) has continued to withhold his support.

See what others are saying: (The New York Times) (Axios) (The Washington Post)

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