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GOP unemployment plan hurts these groups the most Jul 30, 2020
 

Senate Republicans unveiled their plan to replace an extra $600-a-week boost in unemployment benefits on Monday.

That subsidy — which the federal government has been paying on top of typical state benefits since early April — formally expires July 31

Republicans want to replace it with a $200-a-week subsidy through September.

The plan would then shift to a more individual formula, with combined state and federal benefits replacing 70% of lost wages from October through December. Federal aid would be capped at $500 a week.

(States unable to implement the formula that quickly could request a waiver to continue the $200 a week through November.)

The plan is hugely consequential: There are nearly 31 million Americans collecting jobless benefits, about five times the peak of the Great Recession.

So, who would win and lose from this new plan? 

Everyone loses

From a personal-finance standpoint, all recipients of unemployment aid lose under the GOP proposal.

This is true for both tranches of the plan: the flat $200 checks and the 70% wage replacement.

Logically, this makes sense: $200 a week is less than $600 a week.

More from Personal Finance:
Why unemployment is a broken system
In HEALS Act, student loan borrowers don’t get much
How second stimulus checks could differ from the first

This policy would cut current aid levels by 43% — to about $521 a week — for the average worker, according to a CNBC analysis.

And there’s only so much upside from the second tranche (the 70%-wage-replacement scenario) — the $500 ceiling on federal aid is less than the $600 a week people are currently getting.

This aspect of the GOP plan would cut current aid by 44% for the typical worker, according to Ernie Tedeschi, an economist at Evercore ISI and a former Treasury Department official.



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Source: www.cnbc.com
 
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