- President Joe Biden and congressional Democrats are trying to pass a $1.9 trillion Covid relief package, including extra unemployment benefits, by mid-March.
- Biden called for jobless benefits to phase out gradually according to certain “automatic stabilizers.”
- But there’s a debate as to which economic and health triggers are best.
Americans may get another dose of extra unemployment benefits — and policymakers are debating the best way to deliver them.
A host of lawmakers and economists want to put the aid on autopilot, phasing out supplemental benefits gradually rather than shutting them off on a specific date.
Those so-called automatic stabilizers would help avert a benefits “cliff,” as occurred the day after Christmas when prior pandemic relief temporarily lapsed for millions of Americans.
But there are many schools of thought on how to accomplish the goal.
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Some think it’s best to wean workers off aid as economic metrics like the unemployment rate improve. Others say public health measures, such as the number of Covid vaccinations, may be a better barometer.
Ultimately, the metrics serve to inform the health of the economy and labor market. And that’s important since offering generous benefits in a healthy labor market may discourage workers from finding a job and hold back a recovery.
But each approach brings distinct pros and cons.
“It’s economic, so there are always tradeoffs,” said Ernie Tedeschi, a policy economist at Evercore ISI and former senior advisor at the Treasury Department.
President Joe Biden and congressional Democrats aim to pass a $1.9 trillion pandemic rescue package by mid-March, when current relief will end for millions of workers. While its final contours are unclear, the legislation would likely raise benefits by $400 a week through August and perhaps longer.
Biden initially called for the length and amount of relief to fall “depending on health and economic conditions,” but didn’t identify a specific trigger.
House Democrats didn’t include such a measure in an initial legislative draft. But the Senate may opt for it, Tedeschi said. Sen. Ron Wyden, D-Ore., chair of the Senate Finance Committee, supports the policy.