Senate Democrats Change Unemployment Benefits In Latest COVID-19 Relief Bill

Democrats on Friday made a last-minute change to the jobless benefits included in their $1.9 trillion coronavirus rescue package, which they are racing to pass in the Senate.

The new proposal, sponsored by Sen. Tom Carper (D-Del.), would offer $300 in weekly added unemployment benefits, instead of the $400 per week Democrats initially included in the bill. The federal government is currently providing $300 in addition to weekly state benefits, so the change would continue the status quo.

However, the payments would now run for another month, until the end of September. That extension could be crucial, because Congress will likely be on recess in August, when benefits would expire under the House-passed legislation. 

The Carper amendment, which will receive a vote Friday, includes another big change that had been sought by progressive lawmakers. The proposal would waive federal taxes on the first $10,200 of jobless benefits individuals received in 2020, in order to cut down on surprise tax bills for the unemployed. 

Some state workforce agencies don’t give workers the option to withhold taxes from federal benefits, and with the extra $600 per week that Congress initially provided last year, millions of workers owe significant taxes but lack the income or savings to handle the bill.

Of the $580 billion in federal benefits paid last year, only 40% had taxes withheld, said Elizabeth Pancotti, an unemployment policy expert with the group Employ America. 

The tax break was originally proposed by Sen. Dick Durbin (D-Ill.) last year, but was omitted from legislation because of its cost. 

The longer duration of benefits combined with the tax break “would provide more relief to the unemployed than the current legislation,” White House press secretary Jen Psaki said Friday

The agreement, which was announced shortly before the Senate began voting on the bill, was made at the request of both progressives and moderates, according to an aide.

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