Others join Oregon Democrat to praise congressional extension through Labor Day.

PMG FILE PHOTO - U.S. Sen. Ron Wyden, D-Ore., said Congress did its job in extending unemployment benefits to people hard-hit by the pandemic.U.S. Sen. Ron Wyden says Congress did its job in extending unemployment benefits and other federal aid to boost the nation's recovery from the coronavirus pandemic — but there's more to be done.

The Oregon Democrat restated his longer-term goals of tying future benefits to economic conditions, making benefits permanent for self-employed and gig workers, and setting national standards for benefits while states retain some flexibility.

capital bureauWyden spoke to reporters on a conference call Friday, March 12, the day after President Joe Biden signed the $1.9 trillion plan that contains $246 billion for the unemployment benefit extensions.

"It's obvious that one year into this public health nightmare, we've still got a lot of heavy lifting to do," he said.

"What we have been though in the past few weeks underscores the need to make sure we stop lurching from one cliff to another by setting these arbitrary dates. They do not do any good for workers."

If Congress had not acted, many of the federal benefit programs were set to end on Saturday, March 13. They include federal benefits that kick in when Oregon's 26 weeks of regular state benefits expire.

"People will be able to breathe a little bit, get a chance to settle in and not be so worried about benefits expiring around the corner," Heather West of Hillsboro, Oregon leader of a Facebook group called Unemployed Action, said on the call.

Now that Biden has signed HR 1913, the extensions will run through Labor Day, although the final claim week under the bill ends Sept. 4.

Unfinished business

Wyden said he is optimistic about his long-term goal of tying future benefits to a state's three-month average unemployment rate.

"The degree of support is different, starting at 1600 Pennsylvania Avenue," he said, referring to Biden's original request.

"What is different now is that we have support from the president, in the House and in the Senate. In plain English, this is tying benefits to what you are dealing with in the economy. When things are going well, and we've heard mention of people wanting to go back to work, unemployment reflects that. When things aren't going well, people will get enough money to pay rent and buy groceries."

Until Wyden secured benefits for them a year ago, self-employed and gig workers had been excluded from the Depression-era system, when most people either worked for a single employer or simply moved to another employer. State trust funds for unemployment benefits come from taxes on employers.

Wyden said it's time to change the system, although he does not envision a new tax to pay for the benefits.

"Senators are going to have problems going back to yesteryear now," he said. "They have seen the face of the modern economy."

Wyden also said the system should be revamped to require some national standards, although he wants to maintain some state flexibility. The maximum weekly benefit varies widely from state to state, from as little as $235 in Mississippi to $1,220 in Massachusetts (although that is rare). Oregon is in the middle, and its 26 weeks match the maximum period in most states, although in Georgia and Nevada, it's only 12 weeks.

As chairman of the Senate Finance Committee, which has authority over tax legislation, Wyden is in a position to reshape the system. He outlined many of these goals last spring, when he was the top-ranking Democrat on a committee led by Republicans.

Senator gets praise

Wyden was joined by unemployed workers and small-business owners who have benefited from federal aid that goes back a year to the CARES Act. Wyden secured unemployment benefits for the first time for thousands of self-employed and gig workers who had never been covered by the system.

"It became a lifeline for me," Paul Mazzio, a trumpet player from Portland whose gigs dropped from 195 in the year before the pandemic to just seven, said. "I was able to keep my head above water financially for the past year."

Be Marston is a shop steward for Unite Here Local 8, which represents more than 5,000 workers in hospitality and food service in Oregon and Washington. She also was a bartender at the Portland Center for the Performing Arts, whose venues have been closed for the past year.

"Because of what is happening, we know we are going to survive with our unemployment benefits until September, when our jobs are going to come back," she said. "It looks like we are going to be able to get to the other side, all because of you. We are never going to forget that you were there for us when it really mattered — and it never mattered more than right now."

Mike Roach is a co-owner of Paloma Clothing in Portland, which has been in business since 1975 — but might have closed if a forgivable loan from the Small Business Administration had not been coupled with extended unemployment benefits. The store had 20 employees on the payroll before the pandemic; it now has 15.

"The program was insufficient," he said. "Without the unemployment benefits and the federal add-on, we just couldn't have made it through the past year with the extensions we've had. You've been able to put yourself in the position of business owners like us."

'An incredible struggle'

Wyden said his immediate goal, after he became Finance Committee chairman, was to ensure the extensions past March 13 and include other aid such as the expansion of the child tax credit from $2,000 to $3,000 ($3,600 for children under age 6).

"What is important as we begin this discussion is that this relief package injects an essential booster shot," he said. "For public health throughout Oregon, for small businesses, for our schools, for Oregonians who are out of work, there is real relief coming. If Democrats hadn't provided this booster shot, this weekend would have looked very different."

Both chambers passed Biden's plan on party-line votes. Vice President Kamala Harris holds the tie-breaker in a Senate split 50-50, but her vote was not needed on the March 6 roll call because one Republican was absent.

The extensions were not for as long or as much as Wyden wanted. He sought an extension through the end of the federal budget year on Sept. 30, and a supplemental benefit of $400 per week, but it stayed at the current $300. Wyden said Senate Democrats agreed to the compromise to keep West Virginia Sen. Joe Manchin from siding with a Republican proposal for ending benefits in August, when Congress is usually on summer break.

"It was clear we did not have the votes for it," he said. "We know this was always going to be hard. It has been an incredible struggle."

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A tax break

The final version of President Joe Biden's pandemic recovery plan includes a $10,200 exclusion of unemployment benefits from taxable income in 2020 federal tax returns.

Those returns are due April 15, although Sen. Ron Wyden — the Oregon Democrat who leads the tax-writing Finance Committee — says the Internal Revenue Service has not announced whether it will extend the deadline for filing returns for a second year. Last year during the pandemic, IRS set the deadline back to July 15.

"It would have hit thousands of Oregonians with a nasty tax surprise," Wyden said, if the Senate had omitted the exclusion from the bill (HR 1913).

A $10,200 exclusion actually had been proposed last year by Democratic Sen. Richard Durbin of Illinois. But that bill did not emerge from the Finance Committee, which then was led by a Republican in a Republican-controlled Senate.

To offset the projected loss of tax collections from the exclusion, Wyden said Senate Democrats ended a couple of tax breaks under the 2017 law signed by President Donald Trump.

There is precedent for the exclusion. Congress excluded $2,400 in unemployment benefits from federal taxes in 2009, although it did not do so during tax-filing season.

About three dozen states, including Oregon, tax unemployment benefits. Three states have already moved to exclude 2020 benefits from 2021 taxes.

Wyden said state action is up to the Legislature, but the IRS already has information on unemployment payments that is forwarded by the Oregon Employment Department, which sends Form 1099-G to affected taxpayers. He said people who have already filed their federal tax returns can file amended versions.

NOTE: Rearranges story; adds how the tax exclusion for unemployment benefits was paid for in the bill.

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