Democrats unlikely to extend federal unemployment benefits

• House Dems currently has no plans to extend federal unemployment benefits, which end in two weeks.
• House Budget Speaker John Yarmuth told Insider that another extension was not part of future spending discussions.
• The Biden administration recently told states they could use the remaining stimulus dollars to extend unemployment benefits on their own.

House Democrats are unlikely to include an extension of federal unemployment benefits in their planned $ 3.5 trillion spending program, according to House Budget Speaker John Yarmuth.

“I heard no interest in extending [enhanced unemployment insurance]The Kentucky Democrat told Insider. “That was not part of the discussion.”

All pandemic assistance programs for unemployed people are expected to expire at the federal level in two weeks. This includes pandemic unemployment assistance for workers and freelancers, as well as another federal initiative providing payments to people who have maximized state benefits. A recent analysis by the left-wing Century Foundation predicted that 7.5 million people would lose all unemployment assistance after the September 6 expiration date.

Yarmuth’s remarks serve as a candid assessment of the chances of an extension of UI among House Democrats. The Senate Democrats are also unlikely to pursue an extension due to resistance from moderates within their ranks.

West Virginia Senator Joe Manchin told Insider earlier this month that he was not in favor of extending Enhanced Unemployment Insurance.

“I’m done with the extensions. The economy is coming back,” he said. Other moderates, including Senator Angus King of Maine, have also recently indicated that they are reluctant to support him.

Democrats are using an arduous process known as reconciliation to push through a $ 3.5 trillion spending plan to bypass Republican opposition, but it requires Democrats not to break ranks.

The Biden administration recently told states they could use the remaining aid funds from the $ 1.9 trillion stimulus bill to extend unemployment benefits themselves.

While some have blamed COVID-19 unemployment benefits for slow job growth in recent months, a July analysis found people were not immediately returning to work in some states that cut early federal unemployment insurance.

Economists say the risk of getting infected along with school closures and lack of child care facilities are among the factors hampering people’s ability to return to work.

New research in August found that the early end of unemployment benefits led to a significant reduction in spending – a drop of nearly $ 2 billion in states that cut benefits in June. And as federal benefits are cut starting in September, researchers predict the pullback could lead to a $ 8 billion reduction in spending in September and October.