Hi everyone! This is Dr. Nitin Chhoda with an important episode of Ignition Time.
And I'm here to talk to you about the lapse
of the $600 unemployment booster. Yes you heard that right.
It's very likely that the $600 federal unemployment booster is actually going
to lapse and then it looks like it's going to get reinstated
once the house and the senate pass a bill that gets signed into law by the
President. Now before I go further the name of my
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So again you can text the word
"ignition" or "time" to 7-0-0-0-0. Thank you
so much for watching let me jump right into the content. So in
this video I'm going to talk about TWO things.
1, why you should prepare for a temporary lapse in the $600
per week unemployment benefit. Its very important that you prepare for a short
period hopefully it's no longer than a week without the $600 a week
federal booster. And number 2, I'll talk about the framework for future
unemployment benefits. We're going to go over
comments from important leaders from important administration officials that
will give you a hint of what's likely to come with the future
of unemployment benefits. So let's start about why you should prepare
for a lapse in the unemployment in the $600 a week
unemployment booster. Now the initial $600 that was set up with the
Cares Act was seen as the fastest way to get funds
to individuals who needed it the most. And at that time lawmakers had concerns
about an outdated system with the state government so they
figured instead of trying to customize the benefits
let's just keep it simple, let's get the money quickly to individuals who need it
the most so that the economy keeps going. So that
individuals can get the help that they need. Basically their fear was the state
unemployment systems, the computer networks, the staff
would be unable to handle something that was targeted and customized because they
were basically outdated and therefore a flat $600
was implemented. In fact the US treasury secretary
Steven Mnuchin specifically talked about that and we'll get over to him in just a
second. Now I also want to talk to you about the framework of
future unemployment benefits. We'll be looking at comments from the senate
majority leader Mitch McConnell, from President Trump, from
senator Chuck Schumer from New York, from the US treasury
secretary Steven Mnuchin, from senator Chuck Grassley who's an
Iowa republican who chairs the senate finance committee
and also from senator Mitt Romney the republican from Utah.
According to a recent article on ABC news that you see on your screen here,
Republicans are torn on how to address expiring unemployment benefits.
The Senate GOP has signaled that the $600 benefits
are not likely to continue. Now I will link you
to this article in the description below so you can go ahead and check it out for
yourself. But now I want to analyze three specific
comments from the senate majority leader Mitch McConnell
from Chuck Schumer the democratic senator from New York and from the US
treasury secretary Steven Mnuchin. Let's take a closer look
at what the senate majority leader said and I've learned in my life that
sometimes it's important not just to pay attention to what is said
but also what is not said. You'll notice that in this clip
the senate majority leader clearly has a priority which is liability protection
for businesses and he has not specifically talked about
the six hundred dollar per week unemployment booster extension
he has talked about a back to work bonus so you'll see that as far as the senate
majority leader is concerned the focus is on getting individuals back
to work safely which makes sense and also to make sure
that there's liability protection for businesses let's go ahead and take a
look at the senate majority leaders comments
been discussing with the administration over the last two weeks
with our members and uh if you're looking for
a theme here thank liability protection for those who've
been trying to deal with the pandemic we don't need an epidemic of
lawsuits on the heels of the pandemic we're already struggling
with kids in school jobs and health care to be the theme of
the proposal that we hope to come together and
represent our republicans and then as the secretary of the treasury indicate
obviously you can't pass the bill on the senate without the
democrats and we'll begin to talk to them as well
now as you can see that was the opinion of the senate majority leader
now let's listen to the opinion of the senate minority leader
democratic senator chuck schumer from new york and it's very clear
that senator schumer wants an extension to the unemployment benefits in fact the
democrats proposed the heroes act which proposed the extension of the 600
weak federal booster all the way through next year let's
listen to what senator chuck schumer had to say what happens is millions of
people go into poverty every expert has said that the pandemic
unemployment insurance which i proposed with senator wyden the
republicans had resisted but thank god it's in the bill it's kept millions of
people able to feed their families pay their mortgage pay their rent
people who lost their jobs through no fault of their own it runs out
the end of this month and if we don't renew it and renew it in a robust way
millions more will sink back into poverty
lose their homes get kicked out of their apartments and not be able to feed their
families so it makes no sense to cut back at a
time when we have over 20 million unemployed
and we have the greatest economic crisis since
great depression to cut back on unemployment insurance
makes no sense whatsoever and that's what they're proposing and then one of
their proposals says well we'll pay people to go back to work
well the people who are going back to work are getting a salary it's the
people who can't get back to work who we need to help and now let's listen
to what the u.s treasury secretary steven mnuchin had to
say when he was specifically asked about the 600 a week federal booster as
it relates to the enhanced unemployment we've been very clear we knew there was
a problem with enhanced unemployment and that certain cases people were paid
more than they made in in their jobs that was a technical
fix we were in emergency we went along with that we're going to fix that
technical fix we're going to make sure that
people are incented to go back to jobs i i've heard stories of where
companies are trying to get people back to work and they won't come because of
the enhanced unemployment but we'll we'll fix that and we'll figure out an
extension to it that works for companies and works for those people who will
still be unemployed there's actually a study in the last day
that shows that two-thirds of workers that were laid off
are now receiving more than their prior earnings because of those expanded
benefits so will will the technical fix be a cap on those
benefits at 100 of whatever that worker was making
before you can assume that it'll be no more than 100
so yes we want to incent people to go back to work
and even at 100 if people have jobs we want them to go back to work
so enhanced unemployment is intended for people who don't have jobs and
particularly industries that are that are harder to rebound so
we will not be doing it in the same way and we're in a dramatically different
situation many businesses are open many businesses
want to hire more people today as you can tell the treasury secretary
wanted to put a cap a limit a threshold on the unemployment
benefits so that an individual doesn't get
more money than what they were getting if they were normally working in fact he
specifically said it's not going to exceed a hundred
percent of that threshold so again if an individual
let's say was making three thousand dollars a month with unemployment
benefits they wouldn't be able to make more than that now there are two schools
of thought about that some would argue that if you're getting
as much money as you made prior to losing your job so
let's say you made three thousand dollars a month and now with
unemployment benefits you're getting up to three thousand dollars a month
there's nothing wrong with that you're doing well
some would argue that the 600 a week federal booster is absolutely necessary
because you lost your job and you lost other opportunities to grow in your job
so there are two schools of thought about this
but it's very clear that republican leaders have talked
about and want to implement a cap a limit a threshold
in the unemployment benefits when they actually reinstated
speaking of the reinstatement of the 600 weak federal fpuc booster
here's a comment from the u.s department of labor they said
the federal pandemic unemployment compensation of 600
can be paid for weeks ending no later than the week ending prior to february
which is july 31st 2020. they also added for all states
except new york that is saturday july 25th new york's
end date is sunday july 26th now there is a massive
economic recovery package in the works right now and i have
covered that elsewhere on my channel so you definitely want to subscribe to my
channel if you haven't subscribed already and
please enable notifications so you get instant updates
from my channel but basically the focus of this economic recovery package will
be funding for schools testing liability
protection expansions to the small business paycheck protection program
and a second stimulus check direct payments to americans i've covered this
elsewhere on my channel as well now the thing though is that at this moment in
time republicans are far from united on an overall package let alone the 600
week unemployment benefits so it's quite likely that there's going to be a lapse
in the 600 a week unemployment benefits and when
the unemployment benefits come back it's likely that that's going to be less
than the 600 a week subject to a cap or a threshold you heard it from the u.s
treasury secretary in fact when the senate majority leader
was specifically asked if a bill could be passed by the end of next week in
other words the week ending july 31st mcconnell
scoffed and said no now president trump is in
favor of an extension of unemployment benefits when he was asked about the
amount of enhanced unemployment benefits he
said he would be okay if the next round of stimulus legislation from congress
included unemployment benefits and he specifically said
they're thinking about doing 70 of the amount
the amount would be the same but doing it a little bit smaller initial amount
so that people are going to want to go back to work so as you can
see there's a consistent statement coming out from the
administration from various officials and the president also said
as opposed to making so much money that they really don't have to now here's a
comment from senator chuck grassley an iowa republican and he
chairs the senate finance committee he has for weeks argued that while the
unemployment benefit cannot simply drop off
it should also not serve as an unfair competitor
to business owners who are looking to hire back employees in fact he
specifically said i think we're going to have to find the
compromise between those who want to cut it off completely but we
can't go to six hundred dollars for another
six months that's what senator grassley told abc news
on monday and senator mitt romney who's a republican from utah
said that he supports an extension of the program the unemployment benefits
program but he argued that there needed to be some scaling back of the program
he said we certainly need to continue to help
people with unemployment provisions but he said the number would be far
lower than 600 dollars now this is where things
get really interesting because it's not going to be possible to customize those
benefits based on an individual's salary or based
on an individual's income because like i mentioned at the start of this video
there are limitations in the state computer systems in the state
technological infrastructure now according to abc news
two republican aides involved in the talks have actually said that there have
been ongoing negotiations about a possible reduction to four
hundred dollars a week but the details of any final product
remained unclear now some members of the republican party
have suggested tying the unemployment benefit to an individual's income but
like i mentioned before logistically technologically that's
going to be a challenge so in fact what romney said on tuesday was
that he believes that there will have to be some sort of a flat
rate because of these technical challenges and it's very clear
that this rate is unlikely to be 600 a week so based on
what i've been reviewing based on the information that i've been getting from
some of my sources it looks like there's going to be a
lapse in the extension of the 600 week unemployment benefits and that will
be followed by somewhere in the range of 400 a week
again we don't know for sure but we'll find out very soon now the
interesting thing is even with the current flat payment of 600
a week many states have been severely backlogged i know many of my viewers
many of my subscribers have said that they haven't received
the 600 a week payment so despite the simplicity
of the 600 a week payment to unemployed individuals
states are still backlogged and states are still not able to keep up with the
demand so the question arises how are they
going to be able to keep up with something that's even more complex
that's going to require a customization of each individual
person's enhanced unemployment benefits once the new bill is passed it looks
like that's going to be very difficult now i've talked about senator rob
portman who's a republican from ohio elsewhere on this channel he's the one
who suggested a back to work bonus he had an interesting idea about tying the
next unemployment booster to an individual's
income so what he said was you can tie it to the individual there's
a way to do it as a percentage of the actual unemployment
that they're paying which is based on their wages now according to portman
states would be able to produce payments using this method
since the states would rely on data that they collect from individuals
filing for unemployment and internal formulas that they use
based on the data that they have for that particular employee that they use
to calculate the state benefits so based on the data that they use
to calculate either the minimum or the maximum benefit they would then use that
data to customize an additional booster from the federal
government now it sounds to me that this is going to be a technical challenge to
the states but again that's what senator rob portman has
suggested democrats of course want to be able to provide a maximum
number of benefits as you can see you heard from senator chuck schumer at
the start of this video we'll have to wait and see what the house and the
senate come up with and i expect us to find out
in in a few days i hope you learned something new thank
you so much for watching my goal with this video
was to help prepare my viewers and subscribers for the upcoming
laps and the 600 a week unemployment benefits and also be prepared that when
the unemployment booster comes back into effect
it's going to be less than the 600 a week probably
tied to your income or tied to your wages
data that the state already has that's what it's looking like
thank you so much for watching i hope you learned something new if you would
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