Today is Thursday and the pandemic unemployment program is going to expire for most people as soon as this weekend, but we still don't have the full text of the Republican party's stimulus proposal.
The reason we don't have the text yet is because it apparently doesn't exist yet, but we'll get to that in a moment.
We've been waiting to see if Republicans would agree to renew the program at all or, if they do agree to renew it, how much they would try to cut it. And now Treasury Secretary Steve Mnuchin says the program will be reduced in scope to cover 70 percent of previous wages.
The Republican coronavirus relief plan will extend enhanced unemployment insurance "based on approximately 70% wage replacement," Treasury Secretary Steven Mnuchin said Thursday.
The Treasury secretary also said a payroll tax holiday, which President Donald Trump has repeatedly pushed for, "won't be in the base bill."
Mnuchin spoke to CNBC about the state of negotiations hours after Senate Republicans and the Trump administration said they reached a tentative deal on legislation they say will serve as a starting point in talks with Democrats.
More from Bloomberg:
But the timetable for unveiling legislative text, which is key to beginning negotiations with Democrats, appeared to be slipping even as Congress and the White House are confronting looming deadlines.
Lawmakers had expected Senate Majority Leader Mitch McConnell to begin releasing a series of bills as soon as Thursday, but Mnuchin said they might not be ready until next week.
“Maybe it gets introduced today or not. We’re still looking at the timing,” Mnuchin said following a meeting with McConnell at the Capitol. “We have a fundamental agreement, we’re just looking at language.”
Their proposal for cutting the program and their inability to actually write the text or 'look at language' are related.
The reason the pandemic program offered payments of $600 per week in the first place is because it was designed to fill in the gap and equal 100 percent of an average wage of $2,400 per month. For some people, this meant they saw their weekly income increase, but the program was intended to plug a hole that state unemployment systems can't broadly fill. Offering the same, flat amount of money to everyone regardless of what their previous wage was or what state they lived in was meant to bypass the need to create a tiered system.
If the program is reduced in scope to cover 70 percent of previous wages, that will hurt some people far more than others because an average wage is not the same in every state and cutting the benefits from $600 to about $400 means the approximately 32 million people receiving benefits will see their monthly spending money reduced by $800.
Republicans say this will be an incentive to return to work rather than just accept unemployment, but most people capable of returning to work have already done so and permanent job losses are climbing. Taking money out of people's hands right now will contribute to even more job losses because consumer demand will fall further into a hole.
This isn't rocket science. There is no economy without consumer demand. People who see their income drop by $800 or whatever final figure the GOP comes up with will stop ordering takeout food. They'll cancel their cable. They'll cancel their media subscription. They'll cut absolutely everything they can. And none of that happens in a vacuum. If enough people cancel their takeout orders, that's another business permanently closed.