Senate Democrats Cut Stimulus Unemployment Benefits—Here’s What That Means If You’re Out Of Work

In order to get President Joe Biden’s $1.9 trillion stimulus bill passed in the Senate, Democratic leaders have agreed to a last-minute request by moderates to keep federal supplemental unemployment benefits at their current level of $300 a week instead of raising them to $400 a week, as Biden had initially proposed.

But there’s some good news. While Biden’s proposal would have extended the supplemental weekly unemployment benefits through August, the amendment expected to be offered by Sen. Thomas R. Carper (D-Del.) to keep the unemployment checks at $300 a week would also extend them through September. And it would provide tax forgiveness for the benefits: under the agreement, the first $10,200 of the unemployment benefits will be non-taxable.

Senate Majority Leader Chuck Schumer prepares to debate coronavirus relief package. A new amendment … [+]

The amendment reportedly has broad support among Democrats, and even some moderate Republicans. Press Secretary Jen Psaki said President Biden also supports the change, writing on Twitter: “The President believes it is critical to extend expanded unemployment benefits through the end of September to help Americans who are struggling.”


She added, “The compromise amendment achieves that while helping to address the surprise tax bills that many are facing… Combined, this amendment would provide more relief to the unemployed than the current legislation.”

Typically, the Senate has a 60-vote threshold to pass major legislation, but the so-called budget reconciliation process allows lawmakers to pass comprehensive legislation with just 51 votes. The Senate and House of Representatives each passed budget resolutions early this month, starting the reconciliation process. (Budget reconciliation allows the use of reconciliation for legislation that changes spending, revenues, and the federal debt limit.)

The Senate voted 51 to 50 on party lines on Thursday afternoon to open debate on the massive stimulus relief bill, after the House passed it, with Vice President Harris breaking the tie. All 50 Democrats would need to pass the amended bill, too, if Republicans don’t vote for it. Vice President Kamala Harris would then be the tie breaker again.

The amendment is an attempt to shore up support among moderate Democrats who expressed concern about increasing the federal weekly unemployment payments.

In addition to extending emergency federal unemployment benefits, the bill would extend two key pandemic unemployment programs through September: the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs.

The CARES Act passed last year created the PEUC program, which can provide up to 24 weeks of additional benefits to those who’ve been affected by the pandemic and have exhausted regular state benefits. The stimulus bill would extend the PEUC program up to 48 weeks.

Those extended PEUC benefits may then be followed by additional weeks of federally funded unemployment benefits in states with high unemployment (up to 13 or 20 weeks, depending on state laws).

Pandemic Unemployment Assistance was created by the CARES Act to provide benefits to freelancers, gig workers, and others who are working on contract and have lost income as a result of the pandemic. The new pandemic stimulus relief bill would lengthen the duration of the PUA program to up to 74 weeks (or nearly a year and a half) from the current 50 weeks.

Both the PUA and the PEUC are slated to expire in the coming weeks. But Senate Majority Leader Charles E. Schumer (D-N.Y.) has pledged that Congress will approve the legislation and send it to the president to sign by mid-March, when those provisions from December’s $900 billion relief package begin running out.

The latest stimulus relief bill would also devote $400 billion to a new round of $1,400 stimulus payments, which should help provide additional relief to those who are out of work.

The newest jobs report, released Friday, showed 379,000 jobs had been added in February. Still, the 6.2 percent unemployment rate remains significantly higher than it was before the pandemic, with 10 millions Americans unemployed. Last February, before the pandemic struck, the unemployment rate was 3.5 percent and 5.7 million, were unemployed.

I’m a personal finance expert and longtime financial journalist who’s written for publications like The New York Times, The Wall Street Journal, Worth, Money and