Kudlow: $600-per-week boost to unemployment benefits won’t ‘survive the next round of talks’

White House economic adviser Larry Kudlow said Tuesday that he doesn’t think that the $600-per-week boost to unemployment benefits will be extended in subsequent coronavirus relief legislation, suggesting that a future package would instead include alternatives to encourage people to go back to work.

“I frankly do not believe the $600 plus up will survive the next round of talks, but I think we’ll have substitutes to deal with that issue,” Kudlow, the director of President Trump’s National Economic Council, said in an interview on Fox News.

The $2.2 trillion coronavirus relief package Trump signed on March 27 provides a $600 per week increase to unemployment benefits through the end of July to help the millions of Americans who abruptly lost their jobs due to the coronavirus. The benefits were increased by a flat amount so that states could quickly administer the change.

Democrats are largely supportive of the increased benefits, with House Democrats passing a bill earlier this month that would extend the $600 weekly boost through January 2021. But Republicans argue that the increase is creating a disincentive for people to go back to work, since some people are receiving more in unemployment benefits than they were in wages before they lost their jobs.

Some Republican lawmakers, such as Sen. Rob Portman (Ohio) and Rep. Kevin Brady (Texas), have floated the idea of a “back to work bonus,” in which people who reenter the workforce could keep some portion of their unemployment benefits for some amount of time. 

Kudlow said that this idea is something that the White House is “looking at very carefully.”

“The trouble with the $600 plus up, and maybe we needed it in that emergency period, but frankly it’s a major disincentive to go back to work and we don’t want that, we want people to go back to work,” he said.

Kudlow also that a payroll tax holiday for employees, which Trump supports, would also incentivize work because it would increase people’s after-tax incomes.

Kudlow isn’t the only administration official to express concerns with the $600 per week boost to unemployment benefits. Treasury Secretary Steven Mnuchin said in an interview with The Hill last week that policymakers “need to fix the quirk” with the enhanced benefits that allows some people to get more in benefits than they were making pre-unemployment.