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Critical unemployment benefit set to expire
02:12 - Source: CNN
Washington CNN  — 

The unemployment benefit that has kept millions afloat amid the worst economic crisis in decades officially expires at midnight. Weekly jobless claims continue to rise. Economic forecasters are warning of another slowdown. The coronavirus has resurged across the country.

The US Senate has adjourned for the weekend.

Bottom line: The dire economic news, the potential for significant long-term damage, the very real deadline – nothing has jarred loose the talks over the next coronavirus relief package. Lawmakers and the Trump administration, people involved in the talks say, are no closer to a broad deal than they were at the start of the week.

What to watch: The top White House negotiators, Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows, and the top Democratic negotiators, House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer, are expect to speak by phone Friday and through the weekend, but at this point no in-person meetings are planned.

Where things stand

Via CNN’s Haley Byrd, who stayed up late on the Hill Thursday night for this feed:

Negotiations between Meadows, Mnuchin, Pelosi and Schumer concluded Thursday night and the two sides remained far apart on a deal.

Mnuchin told reporters after the meeting that negotiators “made progress” on certain issues but remain at odds on others. He said the administration will continue to dialogue with Democrats “for as long as it takes” to reach an agreement

Meadows, meanwhile, said the Democratic leaders didn’t receive their proposals “warmly.”

Pelosi and Schumer confirmed that description, telling reporters the administration doesn’t understand the scope of the action that is needed in the next stimulus bill or the gravity of the situation.

“Right now they don’t get how serious the problem is,” Schumer said. “Did we have a good discussion? Yes. Will we continue to discuss? Yes. Do we want to continue to come to an agreement? Absolutely. But it’s got to meet the gravity of the problem.”

What was on the table

President Donald Trump said Mnuchin and Meadows would bring new options on unemployment benefits to the table Thursday night, and according to a person briefed on the talks, they did in the form of a longer-term extension of the enhanced unemployment benefits at the $600 level. Democrats again rejected the idea of decoupling the benefit extension from the broader talks.

There was tangential progress made in the sense that new proposals were put on the table and there was more depth in the talks about how to structure a proposal, the person said. But the separation between the two sides is still enormous.

“We’re negotiating on two separate tracks,” the person said. “One side is looking at this from a completely different perspective than the other and until we reconcile that it’s hard to see how this comes together.”

Something to keep in mind, this has been pointed out to CNN by aides on both sides of the talks: Democrats have no incentive to break off the unemployment piece because, in their view, there is no sense they’ll get another bite of the bigger apple. The GOP opposition to more spending is growing by the day, while Democratic insistence that trillions more need to be thrown into the economy has been steadfast for months. Splitting off the key deadline issue would likely guarantee no broader, comprehensive deal, aides say.

On the flip side, GOP aides note that there is a government funding deadline at the end of September where Democrats can and almost certainly will call for more funds to address the current crisis. Part of the reticence of going big now on the GOP side (besides the very obvious discomfort with the topline spending) is knowing that they’ll be back doing this again in two months.

About federal enhanced unemployment benefits

To make this perfectly clear, the benefits set to end Friday night at midnight:

  1. Largely expired last week when the last checks were sent out. People who needed and used that money are already feeling its expiration.
  2. Not state unemployment benefits. This was a $600-per-week federal enhancement on top of state unemployment insurance.
  3. Will take weeks, if not longer, to set back up when/if Congress agrees to an extension of some form. That’s a huge problem in and of itself. Some states have taken months to get the additional benefits out to begin with. All when people desperately need them.

The numbers

The US economy contracted at a record 32.9% annual rate last quarter and weekly jobless claims rose to 1.43 million amid signs of a slowing recovery. Those were the headlines for Thursday. Now move the GDP number to the side – that the economy was 9% smaller in the second quarter is backward-looking and was expected.

Instead, focus on the jobless numbers, combined with the warnings this week from Federal Reserve Chairman Jerome Powell about a potential slowdown – and the need for more fiscal response from Congress.

Then look at what has already occurred. Despite the most dramatic economic slowdown in recent US history, real disposable income for individuals was *up* 10%. That’s the direct result of the $2.2 trillion emergency aid package from March.

So if the virus is resurging, the economy is slowing, unemployment is ticking up and those direct payments and unemployment benefits are no longer operative, what happens then? The lack of urgency, given that reality, is, to be blunt, stunning.

Along those lines: CNN has had several lawmakers make the point that it’s OK if benefits expire because whenever Congress reaches a deal they’ll be made retroactive and everyone will be made whole.

This is a remarkably out of touch view of things – the thought that people can just go a few weeks or longer without the money that has kept them afloat for months.

What McConnell is doing

Senate Majority Leader Mitch McConnell is noticeably absent from the current negotiations (though he is still very much in the loop), but it’s worth paying attention to what he put into place on Thursday.

He brought up a shell bill and, with a simple majority vote, put it into play for next week – something that creates a number of potential options, from serving as a vehicle for a short-term unemployment deal, or even a comprehensive deal, or just a place where there will be dueling messaging votes. But the point is this: there will be action on the Senate floor next week. It might all be a sideshow, but often movement of any kind starts to jar loose actual discussions which lead to actual movement on things.

As one senator told CNN: “If we could stay on the floor and start talking to each other we’d be in a much better place.” They’ll have an opportunity to do that next week.