Even though Congress extended federal unemployment benefits through mid-March just a few weeks ago (with a “soft phaseout” through mid-April), President Biden’s proposed $1.9 trillion “American Rescue Plan” already calls for continuing and expanding those benefits through September 2021 and beyond. The nonpartisan Center for a Responsible Federal Budget estimates these additional unemployment benefits could cost $350 billion, which would raise federal unemployment support since the crisis began to over $850 billion. Counting state unemployment benefits, total unemployment benefits would exceed $1 trillion. For comparison, in 2019 unemployment benefit payments nationwide were under $30 billion.

While important details await legislative language, the Biden plan proposes the following significant expansions of unemployment benefits, discussed in greater detail below:

• Increases federal unemployment bonuses to $400 per week;

• Extends federal programs through September 2021;

• Increases benefits to as many as 99 weeks per recipient in some states;

• Increases payments for average continued benefit recipients to over $51,000; and

• Anticipates permanent unemployment benefit expansions beyond September 2021.

1. Increases federal unemployment bonuses to $400 per week. The Biden plan calls for extending and increasing federal unemployment benefit bonuses payable on top of regular state and federal unemployment benefit checks. Current $300-per-week bonuses payable through mid-March would rise to $400 per week through September 2021. These bonuses were first set at $600 between April and July 2020. Prior research suggests $400 supplements would raise unemployment benefits above prior earnings for over half of benefit recipients. 

2. Extends federal programs through September 2021. The March 2020 CARES Act created several other new temporary federal unemployment benefit programs, including the Pandemic Emergency Unemployment Compensation (PEUC) program that provides extended benefits to those exhausting state unemployment insurance (UI) and the Pandemic Unemployment Assistance program that supports those ineligible for UI. Both programs were extended through mid-March in the latest relief law, with a soft phaseout through mid-April. The Biden plan proposes extending both programs “through September 2021.”

3. Increases benefits to as many as 99 weeks per recipient in some states. The Biden plan also increases the number of weeks of benefits payable per person. For example, as the plan notes about PUA recipients, the president “supports increasing the number of weeks these workers can receive the benefit to provide long-term financial security.” To do so “through September 2021” would mean adding 29 weeks of benefits per person, on top of the 50 weeks already payable under PUA. That means 79 weeks of PUA benefits would be payable in all states regardless of the state’s unemployment rate. A matching expansion of PEUC benefits and the availability of up to 20 weeks of benefits under the Extended Benefits (EB) program means a total of up to 99 weeks of all benefits would be payable in some high-unemployment states. That would match the record 99 weeks of benefits payable in the wake of the Great Recession.

4. Increases payments for average continued benefit recipients to over $51,000. Unemployment benefit recipients laid off in April 2020 and collecting the average weekly UI benefit of $319 nationwide through December 2020 already received over $24,000 in benefits. That includes 26 weeks of state benefits, 13 weeks of federal extended benefits, 17 weeks of federal $600 bonuses, and six weeks of federal $300 Lost Wages Assistance payments. The most recent coronavirus relief legislation added 11 weeks of federal extended benefits plus 11 weeks of federal $300 bonuses, which will increase payments by nearly $7,000. The Biden plan extends federal benefits by 29 more weeks and raises federal bonuses to $400 per week, adding another $20,000 in payments for an individual continuing to collect benefits through September 2021. That means someone qualifying for just average weekly benefits would collect over $51,000 in state and federal unemployment benefit checks during that period. Individuals in high-benefit states like California, New York, and Massachusetts would collect even more.

    

5. Anticipates permanent unemployment benefit expansions beyond September 2021. The Biden plan says he will “work with Congress on ways to automatically adjust the length and amount of relief” beyond September 2021.

This article first appeared at the American Enterprise Institute.

Image: Reuters.