Federal Unemployment Checks Likely Getting Chopped to $200/Week — At Least for Now

Stimulus check calculator

Photo Credit: Alexander Mils

The CARES Act’s $600-per-week federal unemployment checks are set to conclude at the end of the month. Now, newly released Senate legislation (the HEALS Act) calls for unemployment benefits worth “approximately 70 to 75 percent” of lost wages, with $200 weekly checks proposed for the August-October timeframe.

These renewed federal unemployment checks are part of the Senate’s just-detailed stimulus legislation. Starting in August, Americans would received $200-per-week federal unemployment payments on top of states’ unemployment benefits.  By October, that amount could be increased to a maximum of $500 to compensate 70 percent of pre-pandemic wages.

Accordingly, states would have two months to implement changes to their unemployment systems to calculate and distribute the 70 percent amount.  The result would give unemployed Americans — including those released from a raft of music industry and broader entertainment companies — a means of financial survival while satisfying Republican concerns over creating a disincentive to return to work.

Speaker of the House Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) are set to formally begin negotiating the stimulus package with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows this evening.

Despite the scaling amount of the weekly unemployment aid within the Republican-controlled Senate’s legislation, stimulus checks would remain largely the same as in the CARES Act. Treasury Secretary Mnuchin previously confirmed as much, though Leader McConnell initially suggested that only Americans earning $40,000 or less per year would be eligible for a second direct payment.

Under the HEALS (Health, Economic Assistance Liability Protection & Schools) Act, individuals with income less than $75,000 would receive a one-time $1,200 check, whereas couples with a combined income of less than $150,000 would receive a $2,400 check. However, unlike the CARES Act, this stimulus package would afford adults $500 per dependent (on top of the main payment) regardless of his or her age.

Also included in the newly unveiled GOP stimulus plan is a provision that would allow small businesses that experienced a 50 percent or greater drop in revenue to apply for a second Paycheck Protection Program (PPP) loan. Lastly, the proposal would earmark roughly $100 billion to assist schools in safely reopening – funds that Leader McConnell previously said he would seek – as well as $16 billion to further enhance states’ COVID-19 testing capacities.

Also Read:  IRS Issues Guidance for Americans Accidentally Receiving a Second Stimulus Check

As mentioned, prominent congressional Democrats are set to meet with White House officials this evening to begin negotiating the legislation in earnest. While politicians on both sides of the aisle have expressed a desire to move quickly, several disagreements may continue to delay the process. Democrat leaders voiced opposition to the federal unemployment checks slash in the past, and the timetable for updating states’ unemployment systems – which were overburdened during the pandemic’s domestic onset – isn’t set in stone.

In terms of broader disagreements between the political parties, the GOP stimulus bill calls for about $1 trillion in new spending, whereas the House passed the $3 trillion HEROES Act in May. Speaker Pelosi has voiced her desire to pass a stimulus package worth a similar amount as the HEROES Act.

More as this develops.

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