Senate Cuts Weekly Unemployment Boost in Stimulus Bill

by Maurie Backman | Updated July 25, 2021 - First published on March 6, 2021

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Jobless workers will now get a lower boost each week, but an extra few weeks of payments.

Senate lawmakers met yesterday and again today to hash out the details of the $1.9 trillion coronavirus relief bill they're hoping to sign into law as quickly as possible. The Senate, after much debate, was finally able to pass the bill along party lines this afternoon. With extended unemployment benefits set to expire for millions of Americans by March 14, it's really down to the wire to avoid a gap in payments for the millions who have been out of work for months and rely on those benefits for income. But one last-minute change to the relief bill is apt to impact the jobless a lot.

A smaller weekly boost

When President Joe Biden unveiled the details of his sweeping $1.9 trillion relief bill, it included a $400 weekly boost to unemployment benefits through the end of September. The House version of that bill, which was voted on last week, moved that timeline up so that boosted benefits would expire on Aug. 29. This is something some lawmakers have vehemently opposed due to the fact that Congress is typically in recess during August and wouldn't be around to vote on an extension if necessary.

Now, there's been a big change to the Senate bill that jobless workers may not be initially thrilled to learn about. Instead of a $400 weekly boost to unemployment benefits, a $300 weekly boost is on the table. That's the same boost workers have been getting under the most recent relief package that was signed into law in late December.

At first glance, this isn't the best of news. However, there are a few additional changes to the bill that soften the blow. For one thing, lawmakers are now calling for unemployed workers to receive boosted benefits through late September rather than having them expire in late August. Secondly, the new proposal makes the first $10,200 in benefits tax free for jobless workers.

Generally, jobless workers who opt to have federal taxes withheld from their unemployment benefits lose 10% of that money. By exempting $10,200 per worker from those taxes, jobless workers will effectively get an extra $1,000 in their bank accounts. This can help compensate for the lower weekly boost that's now looking to make its way into the final bill.

Racing against the clock

Lawmakers are hoping to sign their relief bill into law quickly to avoid a gap in jobless benefits. But the reality is that even if that happens in the next few days, it may take a few weeks for state unemployment agencies to incorporate the new rules into their (often outdated) systems. As such, jobless workers could still see a temporary gap in benefits, even if lawmakers are able to move quickly.

As of now, there are several differences between the House relief bill that was voted on last week and the Senate bill that passed earlier today, including lowered income thresholds for stimulus check eligibility. Lawmakers will need to work these out before sending final legislation for the president to sign off on, and only once that happens will a third round of stimulus checks go out to the public.

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