Extra $600 for Unemployed Workers Would Be Extended Under Democrats' Heroes Act Proposal

Unemployed Americans could see their benefits expanded under the $3 trillion coronavirus rescue bill being proposed by House Democrats.

The Heroes Act unveiled Tuesday spans more than 1,800 pages and includes assistance to state and local governments, hazard pay for front-line health care workers and extended financial relief programs. The House could vote on the bill as soon as Friday.

"We must think big for the people now, because if we don't, it will cost more in lives and livelihood later," said House Speaker Nancy Pelosi of California. "Not acting is the most expensive course.

One of the most important provisions to unemployment insurance is the extension of additional benefits. The legislation would ensure that people currently out of work will be able to receive an extra $600 a week in unemployment benefits until at least next year.

Newsweek subscription offers >

The additional payment, which was created in the Coronavirus Aid, Relief and Economic Security (CARES) Act passed by Congress in late March, is due to expire in July. But with unemployment reaching 14.7 percent (the highest since the Great Depression) Democrats say it's unrealistic to cut off the benefit so soon.

Under their plan, the extra $600 unemployment payment would be extended until January 31, 2021. After that date, a "soft cutoff" will be put into place that would allow some individuals to receive benefits until March 2021.

The measure is likely to receive significant pushback from Republicans on Capitol Hill. Senator Lindsey Graham previously told reporters that Congress would extend the additional $600 benefit "over our dead bodies."

new york city business closed coronavirus unemployment
People walk through a shuttered business district in Brooklyn on May 12, in New York City. The Heroes Act, which the House could vote on as soon as Friday, includes assistance to state and local governments, hazard pay for front-line health care workers and extended financial relief programs. Spencer Platt/Getty

Newsweek subscription offers >

The bill also acknowledges that states are running out of money to pay out the increasing number of unemployment claims—more than 33 million people filed for benefits in the past seven weeks.

California became the first state to borrow money from the federal government in order to keep up with payments, and experts say nearly every state will have to do the same as the coronavirus pandemic continues. But taking out loans comes at a hefty price, often leading states to slash their unemployment programs even after a recession ends.

House Democrats would alleviate the pressure on states by devoting $925 million to assist the processing of unemployment insurance claims.

Other financial relief measures in the Heroes Act include a second round of direct $1,200 stimulus checks, more funding for food assistance programs and $175 billion for rent, mortgage and utility assistance.

While Democrats argue the legislation would help cushion the economic blow of the coronavirus crisis, Republicans have already deemed the bill "dead on arrival."

"This is not a time for aspirational legislation," Senate Majority Leader Mitch McConnell said after the legislation was made public. "This is a time for practical response to the coronavirus pandemic. And so we're going to insist on doing narrowly targeted legislation, if and when we do legislate again and we may well, that addresses the problems, the needs—and not the aspirations of the Democratic majority in the House."

But Federal Reserve Chairman Jerome Powell said Wednesday that more relief spending by the government may be necessary to avoid a prolonged economic downturn due to the COVID-19 pandemic.

"Additional fiscal support could be costly, but worth it if it helps avoid long-term damage and leaves us with a stronger recovery," Powell said during a speech to Peterson Institute for International Economics.

Extra $600 for Unemployed Workers Would Be Extended Under Democrats' Heroes Act Proposal | U.S.