Labor Secretary Eugene Scalia told a Senate panel Tuesday that he's open to extending jobless benefits given by Congress this spring, but added that the strong May jobs report meant the policy should change.
Sen. Charles E. Grassley, R-Iowa, set the tone for the Senate Finance Committee hearing with an extended review of whether the $600 plus-up to unemployment benefits approved in a roughly $2 trillion COVID-19 relief law created a disincentive for workers to get back to the job.
“One thing we’ve learned is how poorly targeted the additional $600 per week payments are, as it appears most recipients are being paid more on unemployment than they were when working,’’ Grassley said in his opening statement. “This of course discourages people from returning to work or taking a new job, thus delaying the recovery.”
Ranking member Senator Ron Wyden, D-Ore., returned to the negotiations that led to agreement on the law and the $600 per week payment, reminding Scalia that the across-the-board increase was intended to replace 100 percent of the average family income on a nationwide basis in light of the fact that state unemployment systems could not handle to the calculations to do so.
“The only choice is to make an extension of supercharged unemployed benefits, and to do it now,” Wyden said.
But Scalia said in his statement that upbeat job numbers released June 5 demonstrated that changed economic circumstances required a changed benefit. Nonfarm payrolls rose 2.5 million in May, a far better performance than most economists were expecting. Scalia said the enhanced jobless benefits that expire at the end of July should be revamped.
“Unemployment benefits will still be needed past that date, of course,” he said. "But the circumstances that originally called for the $600 plus-up will have changed; policy will need to change as well.”
Wyden tried a different tack in his questions. He told Scalia of a letter he and other Democratic senators had sent to him asking for clear guidance on workers' right to refuse to return to the job without losing benefits if they believe conditions are unsafe.
“Will you commit DOL to provide safety-first guidance in writing to ensure no one loses unemployment benefits because of a risk to health or safety?” Wyden asked.
But Scalia downplayed the need for federal guidance to state authorities.
“In terms of the return to work that you ask for, that is to a large extent a function of state law,” the former corporate lawyer said. “We don’t want workers coming back to unsafe workplaces.”
“No one ought to be forced to choose between their health and their income,” Wyden replied. “And I believe states, employers and workers deserve some clear safety first guidance on the issue more than 20 senators asked you about. If you’re ok with taking away a lifeline to send people back to unsafe jobs in the middle of a pandemic, I think that’s wrong and I think it’s inhumane.”
Wyden returned to the attack, asking Scalia whether state unemployment systems had improved sufficiently to permit them to calibrate a 100 replacement benefit state by state.
Scalia tried to sidestep the question, but he left the door open to further talks with Democrats on whether enhanced jobless benefits should be available after the end of July.
“We’ve had some valuable conversations from my perspective, and I hope from yours,” he said. “I would look forward to the opportunity to discuss this with you further.”
Sen. Michael Bennet, D-Colo., also pleaded with Scalia to consider the need for continued benefits.
“The $600 a week benefit has prevented a level of severe hardship that it’s almost impossible to comprehend, even in this hearing room,” Bennet said. “It’s paid the rent and prevented evictions. It’s put food on the table, so families don’t go hungry.
“So if we let these benefits expire at the end of July, Mr. Secretary, I'd argue we’re going to throw tens of millions of people who rely on them into a financial crisis, family by family, all across the United States of America," Bennet said.
“This body itself set a July 31 expiration for that benefit,” Scalia replied. “I think where we sit now is the recovery in the job market has happened more quickly than Congress expected in late March.”
Yet Scalia again expressed flexibility when Bennet asked whether it was likely that the economy could create another 10 million jobs by the end of July for those who are still unemployed.
“I think 10 million unemployed Americans is 10 million more Americans without a job than we want, and it does make sense for us to consider, particularly as we get close to that July 31 date, what measures may be necessary,” the secretary said.