Larry Kudlow, director of President Trump’s National Economic Council, said on Sunday that the $600 in extra weekly unemployment benefits provided by the federal government as part of coronavirus response efforts are creating a “disincentive” for some workers to return to their jobs and will end in late July.
"Unemployment benefits will not stop in August," Kudlow said, clarifying that regular state benefits will continue. "The $600 plus up, that's above the state unemployment benefits that they will continue to receive, is in effect a disincentive, or I mean we're paying people not to work. ... That might have worked for the first couple of months. It will end in late July.”
Kudlow added that Trump and the administration are “looking at a reform measure that will still provide some kind of bonus for returning to work, but it will not be as large and it will create an incentive to work."
Lawmakers are debating whether to continue the $600 payments, which Democrats want to extend through January 2021.
The Congressional Budget Office projected this month that if the payments were extended for six months, about five out of six workers on unemployment would earn more in jobless benefits than their potential earnings through work. The likely result, CBO said, would be that employment levels would be lower over the second half of this year and in 2021. At the same time, CBO said that extending the benefits would help the economy by increasing demand for goods and services. “The additional $600 per week in unemployment benefits under current law allows people to continue to consume goods and services that they might otherwise be unable to afford and to save for future contingencies,” the budget scorekeeper said.
The Labor Department said earlier this month that 21 million Americans were unemployed in May.