U.S. Treasury Secretary Steven Mnuchin appeared on ABC News this morning to explain why the debate over unemployment benefits is holding up the next stimulus check. Democrats such as Nancy Pelosi have indicated that the $600 per week unemployment enhancement is the issue where they will put their foot down in negotiations with Republicans. The latter's proposal would lower the payment to $200 per week. Mnuchin suggested that the payments were creating an incentive for people to not work, despite evidence to the contrary.
"We want to fix the issue where, in some cases, people are overpaid," Mnuchin said. Asked to clarify whether he thought the enhancement really worked as "a disincentive to find a job," Mnuchin said: "there's no question, in certain cases, where we're paying people more to stay home than to work. That's created issues in the entire economy." Reporter Martha Raddatz then pointed out a Yale study that refuted Mnuchin's claim, and he claimed that there is "a Chicago study" that supported his point instead.
Treasury Secretary Mnuchin tells @MarthaRaddatz “there’s no question” that $600 unemployment insurance is a disincentive to find a job in “some cases.”August 2, 2020
"But let's just face it," he went on, "we know factually there are cases where people are overpaid, there are cases where people are underpaid. The issue is, we need to come up with an agreement to extend this... We're going to work every day until we reach a reasonable agreement that's good for the American public."
During the interview, Mnuchin also repeatedly claimed that he and other Trump administration officials had proposed a temporary extension of the $600 benefit while the negotiations carry on, blaming them for the current reduced unemployment. However, in her interview with Raddatz that same morning, Pelosi denied this.
"The idea that they made a proposal is not actually factual," she said. "The fact is that they're subjecting somebody who gets $600 to scrutiny that they won't subject somebody who is getting millions of dollars from PPP [Paycheck Protection Program]. Overwhemingly, this is keeping people out of poverty... the $600 is essential for America's working families. To condescend, to disrespect their motivation is so amazing."
After Democrats turned down offer of short-term extension, Speaker Pelosi says, “We have been for the $600. They have a $200 proposal which does not meet the needs of working families … the idea that they made a proposal is really not actually factual.” https://t.co/qvp1ZOU4QD pic.twitter.com/GZEjjBz99r— ABC News (@ABC) August 2, 2020
Critics have also pointed out that it was Republican leaders like Sen. Mitch McConnell who delayed this whole negotiation process by months, after the U.S. Congress passed the HEROES Act back in May. In answer to that, Mnuchin pointed out the unprecedented level of economic stimulus passed this year to combat the coronavirus pandemic.
"We've authorized over $3 trillion into the U.S. economy this has never been done in the history of time. We put about half of that into the economy and we wanted to wait and see how the money was going to work and we have to have balance. There's obviously a need to support workers, support the economy. People who, through no fault of their own, are shut down because of this terrible disease," he said. "On the other hand, we have to be careful about not piling on enormous amounts of debt for future generations."
Mnuchin argued that the $600 unemployment enhancement was only ever passed out of desperation, asserting that lawmakers' outdated computer systems couldn't have calculated an enhancement based on income. Now, the Republican proposal asks them to do just that, implementing a whole new system by October. In the meantime, about 20 percent of American workers are unemployed, and are facing food security issues as well as a potential housing crisis. The number of new coronavirus cases and deaths are still on the rise.