Trump against extending unemployment benefits
President Donald Trump privately expressed opposition to extending a weekly $600 boost in unemployment insurance for laid-off workers affected by the coronavirus pandemic on Tuesday, according to three officials familiar with his remarks during a closed-door lunch with Republican senators on Capitol Hill.
A part of a $2 trillion package passed by the Congress benefits the unemployed, paid by the federal government. This boost expires this summer, and it was proposed by the Democrats to extend the aid through January 2021. However, Republicans are concerned that the unemployed earn more than they did when they were working, this would give them less incentive to find a new job. Now President Donald Trump joined the party who thinks that the unemployment check is too high. If the emergency unemployment insurance is not extended, unemployed workers will receive a wage reduction of over 50% until 31 July..
It is not clear whether he wants to reduce payments or cancel unemployment insurance altogether. Either way, cutting off the benefit package could hinder the recovery of the economy, fear some economists, which would subsequently jeopardise Trump’s re-election. Why did he suddenly speak out against the extension of the UI, now, not long before the elections?
Trump is probably not worried about deficit and debts. However, a high unemployment insurance would, just like a high minimum wage level, damage businesses. Trump’s peers wouldn’t be happy with that, so he decided to turn against the extension.
Another reason could be that Trump wants to pretend that the economy has recovered. Trump’s advisers have expressed confidence the economy will quickly recover, a view at odds with many economists. A healthy economy doesn’t need high unemployement insurance and everything will be fine again, at least he’d think so. Unfortunately, wishing that the pandemic is over and everyone can go back to work to save the economy does not change the current situation. If they get away with it, they might even promote lower unemployement insurance or lower minimum wage levels with the reason that this is an emergency situation.