Merkley: Extended unemployment benefits and state aid still uncertain
As he heads back to Washington, D.C., U.S. Sen. Jeff Merkley is pessimistic about how much the Senate's Republican majority is committed to extending higher unemployment benefits or providing more aid to states and communities in the next federal coronavirus pandemic plan.
The Senate reconvenes Monday after a two-week recess. Unlike the Democratic-led House, which passed a $3 trillion follow-up aid plan back on May 15, Senate Republicans will unveil their plans next week — as the extra $600-per-week unemployment benefit in the CARES Act is set to expire.
Merkley, an Oregon Democrat, said it's a different process than the bipartisan agreement that resulted in the $2.2 trillion CARES Act just four months ago.
"This is Mitch McConnell's strategy," Merkley said. "Instead of having a bipartisan working group trying to produce a bill, it's been about putting out a Republican plan and making it as partisan as they can. That is not helpful at all."
Merkley spoke in an interview Thursday, July 16, before a virtual town hall meeting — his 11th so far this year — with Multnomah County residents. He now has conducted in-person or virtual meetings in 34 of Oregon's 36 counties this year, for a total of 430 in almost 12 years in the Senate.
The extra $600-per-week benefit ends July 31 unless Congress extends it.
The House plan, known as the HEROES Act, proposes to extend the extra benefit through January. Sen. Ron Wyden, Merkley's colleague, has proposed to tie the extra benefit to unemployment rates in each state so that the amount declines when the rates drop.
"It has been a lifeline for so many Americans who have lost their jobs, and we are talking about tens of millions of people who lost jobs in a short period during an unprecedented collapse of our economy," Merkley said.
"We are not anywhere near through this pandemic. We are going to have to have some extension. That is going to be a key piece of the bill that we hope to produce in the next two weeks."
Though Oregon's unemployment rate has fallen from a peak of 14.9% in April — after a record low 3.5% in March — the decline was to 14.2% in May and 11.2% in June. Oregon's peak during the 2007-10 recession was 11.9%; the highest was 12% during the 1980-82 recession.
More than 30 million workers nationally are still unemployed.
A lifeline for states
Meanwhile, Oregon's personal and corporate income tax collections — which account for more than 90% of the state's general fund — are projected to drop by almost $3 billion for the rest of the state's current two-year budget cycle. The Legislature's chief budget writers have proposed an outline for spending cuts and fund shifts, including drawing down reserves, but say federal aid is needed as a cushion against further spending cuts.
"All states need federal assistance right now. I am glad we have a state rainy-day fund, but it's not going to be sufficient for the challenge we face this year and next," Merkley said.
"We may not get it done at the level the House has passed. But the idea that we are going to back our cities, counties and states is fundamental to getting us through this crisis together as a nation."
The House plan proposes $915 billion, nearly a third of the total, for aid to state and local governments in installments through May 2021. Merkley said Oregon would get $5 billion, and local governments just under $4 billion, under that plan.
McConnell once suggested that states consider bankruptcy as an alternative — though Congress would have to pass a law to allow it, since unlike local governments, states cannot go bankrupt. He has since eased off that stance, but Republicans still resist aid.
The CARES Act gave states $150 billion — Oregon got $1.4 billion and Portland, Multnomah County and Washington County just under $280 million — but requires all the money to be spent on expenses related to the pandemic. None of it can go to offset budget shortfalls.
Merkley also said McConnell has been key in blocking Senate action on policing reform, unlike the House, which passed a plan on June 25. The Senate's majority Republicans failed on a procedural vote the previous day to advance their plan because Democrats said they were shut out of any involvement in writing it.
"This is another situation where McConnell, instead of having a bipartisan group work out a plan, said he was going to do a Republicans-only bill," Merkley said.
The bill developed by Sen. Tim Scott of North Carolina, the Senate's only Black Republican, proposed what Merkley called "studies and incentives, but little else."
"There was nothing that constituted real reform," Merkley said. "Democrats refused to participate in a process that was rigged without any commitment to amendments to be debated and voted on the floor."
"I think McConnell is happy with saying we tried, we put forward a bill that provides enough political protection for us — and we failed. I am not optimistic that under his control, there will be a bill of any substance addressing the systemic racism in a public safety setting."
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