Trump’s Allies Insist on Cutting Unemployment Benefits

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Even As 1.4 Million More Lose Jobs, Trump‘s Senate Allies Insist on Cutting Unemployment Benefits

 

Q2 2020 hedge fund letters, conferences and more

Cutting Unemployment Benefits Would Dampen Then Recovery

WASHINGTON, D.C. – The Trump recession deepened as over 1.4 million more Americans entered the unemployment ranks this week, marking the 19th week in a row over a million workers filed initial claims for jobless benefits. And yet while the economy remains in freefall, the President’s Senate allies dropped a bill this week that would slash federal unemployment benefits by $400, even as recent reporting shows that 1/5 workers have filed jobless claims and the Labor Department released data showing that unemployment claims are rising for the first time since March.

“It’s economically reckless that Mitch McConnell and his colleagues are even considering an end to unemployment benefits when so many Americans are without work,” said Kyle Herrig, President of Accountable.US. “Jobs are not going to magically appear by leaving people with even less money to feed their families and avoid eviction. Cutting unemployment benefits, even as we know that many large corporations have yet to rehire workers, would extinguish any hope of an economic recovery for the foreseeable future.”

The Senate bill also injects $100 billion more into the SBA Paycheck Protection Program (PPP) while leaving in place most of its flaws. The program was intended to help keep small business workers on payroll, but because of the administration’s poor design, the program ended up helping large corporations from the start with little oversight while small mom-and-pop shops, especially in communities of color, were left behind and closed down themselves.

The fact is we cannot solve the economic crisis until we solve the public health crisis. Until then, it is wrong to ask workers to bear the brunt of this crisis while pumping billions more into a program that isn’t proven to actually help the people it was supposed to.

Where To Start On The Road To Recovery:

In addition to immediately extending the CARES Act’s enhanced $600 unemployment benefits, Congress must turn the page on the Small Business Administration’s poorly designed and managed program. Rather than repeating the Trump administration’s mistakes, any new effort to help small businesses must be transparent, data-driven, and aligned with the needs of the communities that need help the most.

Leader McConnell may have had a good laugh at the prospect of passing another relief bill before enhanced unemployment benefits expired, but there’s nothing funny about his decision to “take a pause” on negotiations over two months ago.

It’s Clear More — Not Less — Needs to Be Done as The Trump Recession Gets Worse for Millions of Americans:   

  • CNN, 7/29: Cutting the $600 unemployment benefit could hurt the recovery, economists say. Nearly 1 million jobs could be lost through the end of the year, and unemployment could be 0.6 percentage points higher if lawmakers reduce the benefit to $200 a week, according to a recent estimate from Moody’s Analytics.
  • Axios, 7/29: PPP may have only saved about 13.6 million jobs, not 51 million. The efficacy of the program has faced serious questions, with a June study for the National Bureau of Economic Research concluding that the PPP had “little material impact on employment at small businesses.”
  • Forbes, 7/28: Report: More Than 40% Of U.S. Renter Households Are At Risk Of Eviction. Tennessee, Minnesota, Mississippi, Florida and Louisiana are all among the states set to be worst impacted with shares at 50% or higher.
  • Washington Post, 7/27: PPP was intended to keep employees on the payroll. Workers at some big companies have yet to be rehired… their decisions to withhold the money from payroll have left employees to rely on government unemployment checks, which in some states have been difficult to obtain and, for many, will soon stop when the benefit expires.
  • USA Today, 7/23: ‘I need that extra little bit of money to keep the lights on’: How unemployed Americans will cope without an extra $600. Americans face a steep drop in their unemployment benefits at a time when coronavirus cases are spiking again and more states are abruptly pausing their reopenings, trends that threaten to derail the nation’s economic recovery when millions are already out of work.

The post Trump’s Allies Insist on Cutting Unemployment Benefits appeared first on ValueWalk.

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