Lawmakers should replace a $600 unemployment supplement for jobless workers with a maximum $400 a week, according to a new proposal issued by a group of powerhouse economists.
The proposal comes as Democrats and Republicans debate the merits of extending the $600 weekly enhancement to unemployment checks, which is scheduled to end after July 31.
Democrats want to extend the $600 checks past July to avoid a severe drop in household income at a time when unemployment is likely to remain elevated. Republicans want to end the payments outright or replace them with a back-to-work bonus that pays Americans to find new jobs.
The proposal, published Tuesday by the Aspen Institute, appears to assuage both parties.
The policy would continue weekly aid at a reduced amount. It would also offer a payroll subsidy, either via an extra tax credit or “hiring bonus,” to incentivize workers to rejoin the workforce.
The four authors are: Jason Furman, former chair of the Council of Economic Advisers under former President Barack Obama; Timothy Geithner, former Treasury secretary during the Obama administration; Glenn Hubbard, who chaired the Council of Economic Advisers under former President George W. Bush; and Melissa Kearney, director of the Aspen Institute’s Economic Strategy Group.
The current $600-a-week federal supplement, created by the CARES Act, replaces more than 100% of lost wages for about two-thirds of American workers, according to economists at the University of Chicago.