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What To Expect From New Relief Bill As Unemployment Spikes And Aid Set To Expire?


And it is Thursday, the day we see the number of people who filed unemployment claims the previous week. That number - 1.4 million. It was not only higher than we were expecting; it is also the first time in four months that the weekly number of claims has risen. All this as Congress and the White House are engaged in a game of beat the clock. They're trying to hammer out the details of a fifth coronavirus rescue package. Expanded jobless benefits expire in a little more than a week.

We're going to spend these next several minutes talking through what might be in that rescue package and how it might help or harm an already struggling American economy. So let's bring in NPR congressional correspondent Susan Davis and NPR business correspondent Jim Zarroli. Welcome, you two.



KELLY: Hey. Jim, I'm going to let you kick us off because those rising unemployment numbers. What's going on there? Put that number in context for us.

ZARROLI: Well, as you said, 1.4 million people filed for unemployment. It's a big number in historic terms. It's also about 100,000 more than the week before. And I think what it suggests is the job market stalled out, and that is all tied to this recent spike in coronavirus cases that we've seen. Because of that, businesses in a lot of states have had to shut down again. For example, California just last week ordered retail stores and restaurants and bars in its biggest counties to close back down. And California was one of the states that saw a big increase in unemployment claims last week. So this is, you know, a real cause for concern.

KELLY: Yeah. You mentioned the stores and restaurants and bars, and those are parts of the economy where we have, for a while now, been seeing a lot of people filing for unemployment claims. What are we seeing in terms of job losses expanding to other parts of the economy?

ZARROLI: Well, that's really the danger right now. This is an economy that's already operating at half speed. People are staying home. They're not going to the office, which means, you know, they don't have to buy a lot of clothes. Airline travel is a quarter of what it was. Car sales are down. And this is showing up in the broader economy, and you saw that today. Just today, the parent company of Ann Taylor filed for bankruptcy. American Airlines warned that as many as 25,000 of its workers might be, you know, furloughed or laid off. Then the big automakers like General Motors have been cutting hundreds of jobs.

So, you know, this is an economy that's on life support, and it can't afford to lose more jobs. And the numbers today seem to suggest that, you know, this malaise that we're seeing is really spreading throughout the economy.

KELLY: So that is the grim backdrop, Sue Davis, as Congress struggles to come up with what to do about enhanced unemployment benefits. Where do efforts to reach a deal on that stand?

DAVIS: Well, there's a lot of disagreement. Republicans and Democrats don't agree, but right now what's more important is Republicans don't agree with Republicans on what to do here. Democrats have long advocated for extending the additional $600 in unemployment benefits that they passed earlier this year. They want that to go through January. Republicans maintain that that's just too much money, and it's essentially having a negative effect, where people aren't going back into the workforce because they're making more money not working.

Republicans don't really have a clear plan yet on what they want to do, but Treasury Secretary Steven Mnuchin has indicated that the White House is willing to negotiate on this. It's what they're calling wage replacement - is the term that he used. But he said it would max out at about 70% of what someone's pre-pandemic earnings were. And we're waiting to see if that's something that Senate Republicans are going to rally around. McConnell was supposed to unveil the Republican offer this morning. It's been pushed back, and it speaks to some pretty significant divisions within the party.

KELLY: And just to step us back for a moment, unemployment benefits are just one piece of this broader pandemic relief bill that Congress is trying to come together on. Are they any closer on that? What's in that?

DAVIS: There are some of the bigger-ticket items that they do agree on. There's pretty broad agreement that they're going to include more money for education funding, maybe as much as $105 billion, to help schools open back up and get kids back in school. There's going to be more money for testing - there's been pretty widespread agreement that testing's still not where it needs to be, and people aren't getting the results fast enough - more money for small businesses and a second round of those direct payments to go to Americans and their families, hopefully by August.

There's also an agreement today on something it's not going to include. President Trump wanted it to include a payroll tax cut, but there was pretty strong pushback on the Hill from both Democrats and Republicans alike, and the White House has dropped that demand today.

KELLY: Jim Zarroli, the numbers that we're throwing around here are huge. There's a lot of money in play. What role has that assistance been playing already in the economy, and how might it affect things going forward if it ends?

ZARROLI: Oh, I mean, it's made a huge difference. The $600 benefit that Sue talked about has really kept a lot of families afloat over the past few months. I mean, it has literally kept some of them out of poverty. You know, remember - we're in the worst recession in decades. And one of the reasons why more people haven't fallen into poverty is because they got this extra money. I spoke today to Gregory Daco at Oxford Economics, and he says that these extra benefits are cut off - if they're cut off, you're going to see a lot of people in really desperate circumstances. Here's what he said.

GREGORY DACO: So Congress really needs to look at that picture, look ahead of itself and prevent a massive income cliff if it does not want to see the recovery go into reverse and risk a double-dip type of recession.

ZARROLI: And a lot of economists hold that view. I mean, if you pull this safety net away right now, people will stop buying and spending, and, you know, this hole that we're in will just get deeper. I mean, the increase in unemployment claims this morning is just a reminder of how vulnerable the economy is right now.

KELLY: A point which is surely not lost to lawmakers on Capitol Hill. Sue Davis, just tell me a little bit more about what the holdups are there.

DAVIS: Well, there's about $2 trillion worth of disagreement, and even by Washington standards, we're talking about real money there. I mean, Congress has already spent around $3 trillion just in the past four to five months trying to get this pandemic under control. Mitch McConnell wants this bill to only cost about a trillion dollars; the House Democratic bill costs $3 trillion. So they need to resolve how much they're willing to spend.

Democrats want a trillion dollars alone just in aid to states and local governments, but Senate Republicans are really against this. One example is Florida Sen. Rick Scott said he'll do everything he can to block that bill if it has state funding. And Mitch McConnell wants liability production - protections in it, and if he doesn't get it, he says he's not going to bring a bill to the floor.

KELLY: All right. That is NPR's Susan Davis and Jim Zarroli giving us a lot to keep our eyes on in the coming days. Thanks so much to you both.

DAVIS: You're welcome.

ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.

Jim Zarroli is an NPR correspondent based in New York. He covers economics and business news.
Susan Davis is a congressional correspondent for NPR and a co-host of the NPR Politics Podcast. She has covered Congress, elections, and national politics since 2002 for publications including USA TODAY, The Wall Street Journal, National Journal and Roll Call. She appears regularly on television and radio outlets to discuss congressional and national politics, and she is a contributor on PBS's Washington Week with Robert Costa. She is a graduate of American University in Washington, D.C., and a Philadelphia native.
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