Adam Brandon, president of FreedomWorks, the conservative and libertarian advocacy group, says that the federal government can’t afford to spend any more on coronavirus relief. In an opinion piece at The Hill, Brandon argues that while another coronavirus aid package may be inevitable, it shouldn’t extend the $600 in enhanced weekly unemployment benefits set to expire this month.
Economists warn that cutting off those benefits could sharply reduce incomes for some 30 million Americans, which could reverberate across the economy. A new study released Thursday by JPMorgan Chase found that unemployed households actually increased their spending once they began receiving benefits. "The fact that spending by benefit recipients rose during the pandemic instead of falling, like in normal times, suggests that the $600 supplement has helped households," the report says.
But Brandon argues that extending the benefit would hurt businesses:
“Not only would extending these benefits drive up the deficit, which already exceeds $2.744 trillion this year and is expected to continue to rise, but it would also deal a serious blow to small businesses who may need workers as they struggle to pick up the pieces from the economic shutdowns that sent the economy in a tailspin.
“Paying workers more to stay home than to return to work is a surefire way to cause thousands of small businesses -- a cornerstone of the economy across the country -- to go under.”
What’s more, he says, extending the federal unemployment benefit may be “a stepping stone on the path to universal basic income.” A better idea, he suggests, would be to cut payroll taxes, as President Trump is reportedly demanding. “Businesses deserve the support they need to safely and responsibly reopen,” he writes. “This starts with no new spending as part of coronavirus relief bills.”