Not extending unemployment plus-up would be devastating, says expert

Stephanie Kelton, a professor of economics at Stony Brook University, said Monday it would be devastating if the $600 weekly unemployment benefits are cut in the next coronavirus relief plan. 

“It doesn’t take an economics degree to understand that this life line that was provided, this plus-up that you referred to, the $600 additional per week for unemployed people, has … helped enormously for tens and millions of Americans,” Kelton said on The Hill.TV’s “Rising.”

Kelton said the $600 additional checks for unemployed Americans helped millions of people who would have otherwise fallen into poverty or missed rent and mortgage payments. 

“And the idea that we’re going to cut that significantly, now while we are still in crisis, is simply going to mean millions of Americans missing that rent payment, missing that mortgage payment, not being able to feed their children, not being able to stay current on their bills,” Kelton added. “And once people start missing payments and defaulting on credit card payments, then you have the capacity for this thing to spill over into other parts of the economy, into the financial system and then things can get even uglier than they already are.” 

Senate Republicans are proposing to reduce the expanded $600 weekly unemployment benefit as part of their forthcoming coronavirus relief plan. Treasury Secretary Steve Mnuchin said the plan will transition to payments equal to roughly 70 percent of an individual’s previous wages.