Senate Democrats cut stimulus unemployment benefits to $300 a week in last-minute deal

  • Senate Democrats agreed to lower unemployment benefits to $300 per week and extend them through September.
  • This is a shift from the House’s bill, which included $400 weekly benefits through August 29.
  • With the unemployed facing a tax penalty from 2020, they also moved to forgive taxes on the first $10,200 of benefits.
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Senate Democrats struck a last-minute deal on Friday to lower unemployment benefits in the stimulus package to $300 per week and extend the benefits through the end of September, according to a Democratic aide familiar with the decision.

This is a significant change from the rescue package recently approved by the House, which included $400 weekly unemployment benefits that would last through August 29. However, Insider previously reported that Democrats were eyeing some last-minute changes to parts of the bill.

Early on Friday, Senate Democrats reached a decision to lower the benefits to $300 a week — a $100 decrease — while extending them by an extra month. Tax forgiveness on the first $10,200 of unemployment benefits would also be included — another major change given that 2020’s unprecedented jobless payouts leave many potentially facing unexpected tax payments.

White House Press Secretary Jen Psaki said on Twitter on Friday that President Joe Biden supports the extension of benefits through September to help struggling Americans.

 

“The compromise amendment achieves that while helping to address the surprise tax bills that many are facing by eliminating the first $10,200 of UI benefits from taxation for 2020,” Psaki said. “Combined, this amendment would provide more relief to the unemployed than the current legislation.”

Many Democratic lawmakers would likely welcome the change.

When the House Ways and Means Committee announced it would be cutting unemployment benefits off in August — a month earlier than Biden had requested — Oregon Sen. Ron Wyden said in a February 8 statement that he would work to preserve six months of unemployment benefits, along with $1,400 stimulus checks.

“We can do both,” Wyden said.

The $300 weekly benefit appealed to more moderate Democrats. Sen. Joe Manchin of West Virginia told reporters on Tuesday that he backed a lower benefit that would expire in the summer.

“I’m thinking by end of June, first of July we’re gonna have most people inoculated,” Manchin said.

In the $900 billion stimulus package Congress passed in December, $300 weekly unemployment benefits were included, but those are set to end on March 14 if a new stimulus package isn’t passed before then. 

“I have personally felt the benefit should be $400, but I know some of my colleagues feel otherwise,” Wyden said on the Senate floor on Friday. “So what we’re looking at is making sure that we can get a benefit so that people can make rent and pay groceries, that we prevent that cliff, and by god, we sure as hell shouldn’t let folks who are unemployed pay taxes on those unemployment benefits that they secured in 2020.”

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