Biden signals he backs ending $300 federal unemployment benefit in September as set under stimulus law

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  • Biden indicated that he supports allowing enhanced unemployment insurance to end in September.

  • "It makes sense it expires in 90 days," the president said in remarks from Delaware following the May jobs report.

  • It's not immediately clear whether Biden's comments also extend to programs aiding gig-workers and long-term unemployed people.

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President Joe Biden indicated on Friday that he supports allowing enhanced unemployment insurance to expire in early September following staunch criticism from business groups and Republicans that they're keeping people from seeking out new jobs.

"A temporary boost in unemployment benefits that we enacted helped people who lost their jobs through no fault of their own, and who still may be in the process of getting vaccinated," the president said in brief remarks from Delaware. "But it's going to expire in 90 days - it makes sense it expires in 90 days."

It was the first time Biden had said he backed their scheduled end on September 6. A top White House official later said the elevated benefit programs were designed as "a temporary lifeline" slated to expire in three months.

"As the president said, that's appropriate," National Economic Council director Brian Deese said at a news conference.

Deese later wrote on Twitter that Biden's views did not extend to a pair of government programs aiding gig-workers, freelancers, and the long-term unemployed, also set to end in September.

Some Democrats expressed early concern about another cliff later in the year.

"I've long said pandemic unemployment programs should be tied to economic conditions on the ground," Sen. Ron Wyden, chair of the Senate Finance Committee, said in a statement to Insider. "If that had been done in the rescue plan there wouldn't be these concerns about the arbitrary September cut off, but the way the budgetary effects of these policies are scored is an obstacle."

White House press secretary Jen Psaki said on Friday that Republican states "have every right" to end the programs.

Federal unemployment benefits were an integral part of the three pandemic assistance packages approved since March 2020. Differing elevated jobless benefits were put in place. The recent $1.9 trillion stimulus law included an extension of all federal unemployment programs until Labor Day.

Over the past month, 25 Republican governors have announced they are scrapping those federal programs over the summer, arguing people aren't searching for work due to the generous federal aid.

Republicans and business groups stepped up their complaints of a labor shortage in the wake of a shocking jobs report last month that showed a sharp slowdown in April's pace of hiring. The president then emphasized jobless people risked losing their benefits if they turned down "suitable" work.

Biden's remarks come after the latest jobs report on Friday showed the economy regained 559,000 jobs in May, an amount narrowly missing forecasters' expectations.

Those 25 GOP governors are pulling the plug on enhanced unemployment aid for millions of workers over the coming weeks. About 4 million people will see their benefits either slashed or gone completely, according to an estimate from Andrew Stettner at the liberal-leaning Century Foundation.

But the increased benefits may not be the sole driver for workers continuing to stay home. Rather, a few factors may be contributing. One increasingly prominent reason: A mismatch between the skills required for open jobs and available workers. Fears over COVID linger, as well as childcare obligations.

On the whole, workers would still rather work than remain on unemployment, according to a working paper from the Federal Reserve Bank of San Francisco. Prematurely ending benefits - which governors say will encourage workers to return to work - has left some workers scrambling.

Many stand to lose their benefits completely, since they're receiving unemployment insurance through pandemic-era programs. Pandemic Unemployment Assistance (PUA) expanded who's eligible to receive benefits, bringing gig workers into the fold; Pandemic Emergency Unemployment Compensation (PEUC) expanded how long workers could receive benefits, even after exhausting the weeks their states provide.

Those measures are channeling aid to around 6 million people. In many states opting out of federal UI, both of those programs will end within weeks.

Some advocates and politicians have said that the Labor Department is obligated to step in and provide PUA benefits. The Labor Department has concluded, however, that it likely won't be able to pay out those benefits. The agency declined to comment.

"It looks like my job, my work, could open back up a little bit in October, or maybe by November," Susan Hardy, an unemployed worker in West Virginia (which is ending its federal benefits on June 19), previously told Insider. "At least going to September would allow me to get through more of the difficult periods before hopefully things will open up."

Read the original article on Business Insider