Wyden pushes for extension of unemployment benefits
U.S. Sen. Ron Wyden has renewed his effort for an extension of unemployment benefits as the Oregon Employment Department continues to work on 70,000 claims filed by people newly eligible for those benefits.
Wyden, the top Democrat on the Senate Finance Committee, joined Senate Minority Leader Chuck Schumer of New York Wednesday to introduce legislation that would set one of the Democrats’ markers for the next congressional aid plan for the coronavirus pandemic.
Instead of specific cutoff dates contained in the CARES Act — the law that gave unemployed workers an extra $600 per week on top of their regular benefits, but only through July 31 — the Wyden-Schumer proposal would tie benefits to state unemployment rates. The $600 per week would remain until a state’s three-month average dropped below 11%, then is reduced $100 for every percentage-point decrease in the rate until that rate falls below 6%.
Regular unemployment benefits, dating back to the 1930s, offset only a part of wages lost through layoffs or furloughs.
“In today’s economic conditions, if you want to get full-wage benefits out on time, there is no alternative to $600 per week across the board,” Wyden said in the Senate chamber. “Furthermore, there is no good argument for cutting or eliminating benefits for as long as this pandemic is raging — and even getting worse.”
In an interview last month, Wyden said support for his position is strong. According to 1,987 voters sampled by Morning Consult June 12-14, 75% say benefits should be extended or even increased — 67% of Republicans, 72% of Independents and 84% of Democrats.
The fate of future benefits rests with negotiations between the Democratic-led House — which passed its own aid plan May 15 — and Republicans in the Senate. Wyden and Democrats used their political leverage to get Treasury Secretary Steven Mnuchin to go along with the higher benefits in the CARES Act, which President Donald Trump signed March 27.
Their bill would do two other things.
Workers who exhausted their benefits after 26 weeks would get a 13-week extension in the CARES Act. The bill would extend those benefits through March 2021 and would tie them to a state’s unemployment rate if it is higher than 5.5%. For each percentage point the rate is above 5.5% but below 8.5%, the bill would increase by 13 the number of available weeks for extended benefits.
A large new group — the self-employed, freelancers, independent contractors, gig and temporary workers — became eligible for unemployment benefits for the first time under the CARES Act. The bill would extend their coverage through March 2021, and future benefits would be tied to states’ unemployment levels.
Virtually all of Oregon’s backlog of claims is under this program, which is known as Pandemic Unemployment Assistance. Acting Director David Gerstenfeld said Wednesday that the state Employment Department’s most urgent task is to process those claims and ensure that no one qualifies for regular benefits, as required by the CARES Act.
During the first week, he said, the agency hoped to process 5,000 claims under the new program but got to 4,368. He told reporters during a weekly conference call that a new Google application will enable the agency to link the processing of claims with its mainframe computer system, which dates back three decades, that pays out benefits.
Of 97,000 claims under the new program, 27,000 have been processed and 19,000 are receiving benefits, largely because of a pilot project the agency set up earlier.
Gerstenfeld said more staff and more telephone lines — for both regular benefits and the new program — will be added in the next couple of weeks.
A backlog of 38,000 regular claims has been virtually eliminated. But Gerstenfeld said there are still long delays for people whose cases are being adjudicated because of complex claims involving multiple or out-of-state employers or conflicting information provided by laid-off employees and employers.
States administer unemployment benefits but do so under the direction of the U.S. Department of Labor.
If Congress makes any more changes in the next federal pandemic aid plan, Gerstenfeld said any extension of the extra benefits should take place before the current benefits end July 25 for the week ending July 31.
“Not allowing that to lapse before there is a renewal or extension would make things easier both for people relying on that money and for us administering it,” he said.
He also said that, while some proposals might target the extra benefits to the neediest workers, a flat-dollar amount such as the current $600 per week is easier than new and complex formulas to calculate benefits.
Washington state is among those that may seek federal loans because of the drawdown of trust funds to pay unemployment benefits. Oregon started in mid-March with a trust fund of $5 billion; the Employment Department has paid out $2.5 billion in benefits, though some of them do not count against the fund.
“There is no history of a recession that came on so suddenly and so severely for us to use as a model,” Gerstenfeld said. “But the projections we have so far still have Oregon’s trust fund staying solvent. We are paying out a lot of benefits but a lot of the benefits being paid out are federal benefits that will not deplete that number.”
During his Senate speech, Wyden rebutted arguments by Labor Secretary Eugene Scalia and some of the Senate’s majority Republicans that some laid-off employees prefer the higher unemployment benefits to returning to work — or that an economy recovering after pandemic-induced business shutdowns made an extension of benefits unnecessary.
“The number of people filing new unemployment claims every week — even now — is two and three times higher than the worst single week of the Great Recession,” he said.
“Senators have a right to stake out whatever ground they want on this issue. But the American people overwhelmingly support extending supercharged unemployment benefits. They don’t buy Secretary Scalia’s line about lazy workers or dependence on the government. I can tell you based on the conversations I’ve had with Oregonians, they don’t want a handout.”
According to the Employment Department’s statistical board, more than 500,000 claims for benefits have been filed between March 15 and June 20 — and the number of jobs lost in Oregon since February is almost 100,000 greater than the 147,000 net jobs lost during the Great Recession a decade ago.
Oregon’s official unemployment rate was a record low 3.5% in March. It jumped to 14.9% in April — the highest since modern records began in 1976 — then dropped to 14.2% in May, still the highest in nearly 40 years.
Wyden, in a move he conceded was unusual for him, called on Gov. Kate Brown to fire Kay Erickson as Employment Department director. He did so publicly May 30 as Erickson faced a state legislative hearing about the agency’s backlog. The next day, Brown announced she had requested Erickson’s resignation — Erickson’s letter was dated May 30 — and replaced her with Gerstenfeld on an acting basis.
“What was going on for weeks in Oregon was unacceptable. I pushed hard for the change. It was probably the first time that I ever did with respect to that appointment,” Wyden said in an interview in June.
He said he did so after people thanked him for his role in securing the extra benefits — but were frustrated they could not obtain money from the state.
“When you passed something in Congress that is a lifeline for people, you’ve gotta make sure they really get it,” he said.