Senator Warns if Benefits Expire, Millions of Americans Will Face Financial Hardship
VIDEO: Watch Bennet’s Floor Speech HERE
Washington, D.C. – Today, Colorado U.S. Senator Michael Bennet urged Congress to extend expanded unemployment benefits to support American families as the public health and economic crisis continues. Bennet warned his colleagues during a speech on the Senate floor that if these benefits expire, millions of Americans will face financial hardship.
In his speech, Bennet said: “Today, nearly 10 percent of Americans can't make the rent. Without the extra benefits, that number would double or triple. If we let these benefits expire, we're gonna throw tens of millions of Americans who rely on them into a profound financial crisis…Nothing has kept our economy afloat more than this investment in unemployment. Allowing these benefits to expire would remove $50 billion a month from the economy, reducing GDP by 2.5 percent in the second half of this year. That would lead to 2 million jobs lost and a significant increase in the unemployment rate.”
“[W]e need to extend expanded unemployment benefits, and we need to do it until the economy recovers. It's the right thing for workers and families who are wondering how they’re going to get through one of the most difficult challenges of their lives. It's the right thing to do for the broader economy to come back as strongly as it can as we work toward a vaccine,” said Bennet.
In May, Bennet, along with U.S. Senator Jack Reed (D-R.I.) and U.S. Representative Don Beyer (D-Va.), released a draft framework for the Worker Relief and Security Act, which would tie expanded unemployment benefits to the current public health emergency and economic conditions, instead of allowing them to lapse after a fixed period of time. The bill would use automatic triggers to ensure that assistance continues to flow to workers for the duration of the Coronavirus Disease 2019 (COVID-19) pandemic and the resulting economic crisis even without action from Congress.
In March, Bennet released a comprehensive plan to reform the nation’s unemployment insurance (UI) program. Bennet’s plan to reform UI will:
- Expand eligibility for regular UI and standardize the benefit amount individuals receive across states; and
- Help stabilize the economy by providing automatic and extended UI benefits at the first sign of economic deterioration.
Bennet’s remarks as delivered are below:
Thank you, Madam President. I too would like to thank Leader Schumer and the Ranking Member of the Finance Committee, Senator Wyden, for bringing this common sense proposal to the floor.
I've long advocated for the idea that we should tie benefits to the conditions of the economy rather than to just simply politically convenient dates or inconvenient dates that don't matter, don't make any sense to working people in our country and create idiotic fights here that don't help the people that we all have been sent here, in theory at least, to serve.
And right now, we are facing an unprecedented set of conditions in our country. We are being racked by an economic downturn that's different from any that we've other seen before. And at the same time, we're facing this incredible health crisis.
One in six workers in this country are unemployed. One in six workers is unemployed today. But for once, thankfully, we were able to come together in a bipartisan way in March and pass the CARES Act, which is benefiting these workers in two ways.
First, we expanded unemployment benefits to cover almost 10 million self-employed workers, gig workers, and others that are usually left behind in circumstances like this. That's something we should have changed a long time ago, but we've finally got it done, and we did it in a bipartisan way.
Second, we added, as leader Schumer and Senator Wyden said, we added $600 per week to the normal unemployment benefit for all 30 million workers claiming benefits. That $600 weekly benefit has prevented a level of severe hardship that is almost impossible to describe. It's paid rent and prevented evictions. It's kept food on the table so families don't go hungry. It's kept the lights on and paid for the internet so our kids can learn. The bottom line is that the $600 weekly payment has been an essential lifeline to families in the middle of the worst economic crisis since the Great Depression.
In Colorado alone, over 450,000 workers are receiving the expanded benefit, and it's put a total of nearly $2.5 billion into our economy. Nationwide, the numbers are staggering. One analysis showed these additional payments helped keep 12 million Americans out of poverty and keep poverty rates from falling. Without these payments, wages across the entire economy would have declined by 10 percent from February to May. We completely offset that decline, and you know what that means, is that working people actually were actually able to continue to buy things in this economy.
The Leader might be interested to know, I was talking to an economist recently, Raj Chetty from Harvard, who's done a study including, in other places, of New York. And that study shows that the biggest loss in terms of consumer spending has come from the wealthiest areas in New York, and that's resulted in the biggest unemployment. In other words, if you have a small business in a wealthy area in New York, your small business is cratering because wealthy people aren't spending money on services because they're scared of getting COVID. In other parts of New York, there's been much less destabilization, and that's because of these unemployment benefits -- directly because of these unemployment benefits, because where the unemployment rate has gone up, people's incomes have been able to be stabilized.
And I don't think -- first to say that not everything we've done with the CARES Act has been perfect -- as we know the CARES Act left out too many families. Too many states have been too slow to get these benefits out. And that's the result of delivering these benefits through 50 different systems that have been underfunded and undermined for 50 years. But once they've gotten out, these benefits have made a transformational difference.
Everyone in the Senate should be proud of that. I come out here all the time and complain how terrible this place is. I was amazed to hear the Majority Leader this morning talk about the “incompetence” of local officials. There is no body in the world more incompetent than this Senate. But here’s a moment when we can actually be proud of something that we did here.
Even President Trump has been running campaign ads touting these benefits. But even as he's running these ads, which, as Senator Wyden said, he's running because this unemployment is popular, he's threatening to take away the benefit by allowing the six hundred dollars to sunset at the end of July.
That would be a profound mistake, Madam President. Right now, even with these benefits in place -- even with these enhanced benefits in place -- 17 percent of American families can't cover three months of basic expenses. Without the extra benefits that number wouldn't be 17 percent, it would be 43 percent -- almost half of the families in our country.
Today, nearly 10 percent of Americans can't make the rent. Without the extra benefits, that number would double or triple. If we let these benefits expire, we're gonna throw tens of millions of Americans who rely on them into a profound financial crisis. We'll be cutting their monthly income by $2,400. If we go over that cliff and completely cut off benefits, not only would it cut incomes by 50 percent or 60 percent or 70 percent for literally millions of Americans who can't go back to work, it would cause extreme damage to the economy.
Nothing has kept our economy afloat more than this investment in unemployment. Allowing these benefits to expire would remove $50 billion a month from the economy, reducing GDP by 2.5 percent in the second half of this year. That would lead to 2 million jobs lost and a significant increase in the unemployment rate.
So we'd be right back here again. We shouldn't be doing that at this point in this very fragile economy, when COVID-19 is spreading in far too many places. Some of the industries are facing extreme crises, in my state as well as across the country. Hotels are projected to suffer revenue losses of almost 60 percent in 2020. Between March and May 2020, total restaurant sales were down more than $94 billion from expected levels. Ninety percent of independent concert venues are at risk of permanently closing down in a few months without additional relief. We can't tell people working in all these industries -- there's no way -- where there's no way they are even close -- where the businesses are not even close to being 100 percent in the near future, that they're just on their own.
That's why we need to pass an expanded employment benefit that continues after July, and we should tie that expanded benefit to the unemployment rate as Senator Schumer and Senator Wyden have designed, so it steps the benefit level down as the economy heals.
That makes sense. Nobody here wants to be in a place where the unemployment benefit is disincentivizing people from working, and that's why they step it down. But it needs to stay in place until this economy heals. It’s the wrong approach for the country, and for working people in this country to send them over the cliff right now. And it will be the wrong approach to send people over the cliff in six months or even in two years if the unemployment rate is still elevated. We need to expect -- we need to extend expanded unemployment benefits, and we need to do it until the economy recovers.
It's the right thing for workers and families who are wondering how they’re going to get through one of the most difficult challenges of their lives. It's the right thing to do for the broader economy to come back as strongly as it can as we work toward a vaccine.
So I want to thank my colleagues again for their tremendous leadership. I hope that we'll be able to work on this in a bipartisan way, as we did before, and that we'll be able to pass these extensions for the American people.