Republicans Propose Return-to-Work Bonuses

Current unemployment benefits may discourage some from resuming their old jobs.

May 26, 2020

WASHINGTON—Senate Republicans are considering cash incentives to encourage unemployed Americans to return to work, reports the Wall Street Journal. The proposal comes as Democrats propose an extension to enhanced jobless benefits.

Republicans worry that the current $600 a week unemployment payment, which is in addition to state unemployment benefits, is so generous that it’s discouraging people from going back to work and hampering the economy’s reopening. But Democrats want to extend the payments, which are scheduled to end July 31, into next year, a proposal Republicans have rebuffed.

“This will not be in the next bill,” said Mitch McConnell (R., Ky.), Senate majority leader. “In order to create jobs, we need to incentivize people to go back to work, not encourage them to stay home.”

The country is suffering a historic economic slump in the middle of an election year. The U.S. unemployment rate surged to a record 14.7% in April.

A proposal from Sen. Rob Portman (R., Ohio) would provide a temporary $450-a-week bonus for unemployed workers returning to work, on top of their wages. Portman said his proposal is good for employees “because they can go back to work, go back to their health care and go back to their retirement savings, and yet get a nice, nice bonus for doing so,” the Journal reports.

The proposal also saves taxpayers money and “saves small businesses from going out of business because they can get workers,” he added.

The senator has been working with the Senate Finance Committee, according to a GOP aide. Sen. John Thune (R., S.D.), the No. 2 Senate Republican, said that “there’s some interest” in the idea.

The plan is still being finalized, but in its current form the proposal would give $450 a week to laid-off workers to go back to work through July 31, the same date on which the extra $600 a week in unemployment benefits expires. In addition, states would save money by cutting expenditures on unemployment benefits.

The back-to-work bonus is an alternative to a measure supported by Senate Democrats, who are rallying behind a proposed wage subsidy—or employee tax credit—to keep people working. It would cover 100% of wages and benefits up to $90,000. Some Democrats say they might consider ending the $600 in extra jobless benefits if Republicans rallied behind a wage subsidy.

House Democrats have voted to continue the $600 a week in additional payments for six more months, until Jan. 31, as part of a larger, $3 trillion package. Some Republicans believe that starting the conversation about phasing out the $600 weekly allowance will put the party in a better spot when negotiating with Democrats going forward.

“We have to do what’s best for the country,” said Sen. Kevin Cramer (R., N.D.). “I’m not saying my way is the only way, but I just don’t think we can go back to it. We can’t extend $600 a month.”

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