Andrew Kelly/Reuters
People gather at the entrance of the Department of Labor offices in the New York City borough of Brooklyn on March 20, which had closed to the public due to the coronavirus outbreak.
Senate lawmakers and the White House have reached an agreement on a $2 trillion stimulus bill to bolster the US economy during the coronavirus pandemic.
The proposed relief package, which still needs to pass in the House of Representatives before being signed into law by President Donald Trump, includes about $500 billion in loans and other help to companies and state and local governments, $350 billion to small businesses, and $150 billion to hospitals and healthcare providers, Bloomberg reported.
While the final text of the bill has not been finalized, one of its core tenets is expanding unemployment benefits.
"Every American worker who is laid off will have their salary remunerated by the federal government so they can pay their bills," Senate Minority Leader Chuck Schumer said.
The US has already seen a historic spike in people applying for unemployment benefits as the pandemic results in mass layoffs. For the week ending March 14, jobless claims jumped by 70,000 to 281,000. This Thursday, the Labor Department will be publishing the number of new jobless claims for the week ending March 21, and it's poised to be historically bad news for American workers. Goldman Sachs estimates the number could be a record 2.25 million, more than three times the previous record high of nearly 700,000 set in 1982. The Economic Policy Institute (EPI) estimates that 3 million total jobs could be lost by the summer due to the pandemic.
Here's how the proposed bill would affect unemployment insurance.
An extra $600 per week for up to 4 months, and provisions for self-employed and contract workers
The package would increase the amount each unemployment claimant receives per week by $600, according to Vox. In January, the average unemployment insurance check was $385 per week, as Vox noted, so an additional $600 is a huge jump.
Claimants will be eligible to receive these higher benefit amounts for up to four months.
The bill also includes a Pandemic Unemployment Assistance program, which provides up to 39 weeks - or about five-and-a-half months - of unemployment benefits to those who typically aren't eligible, including self-employed and contract workers, according to the American Action Forum.
The compromise on the stimulus package was announced in the early hours of Wednesday morning, but the full text with specifics was not expected to be released until later in the morning. The Senate could vote on the bill in the early afternoon, The Washington Post reported.
REUTERS/Mike Segar/File Photo
A worker looks out of a nearly empty restaurant in New Rochelle, New York, on March 11, 2020.
The new coronavirus bill was not the first to address unemployment insurance in response to the pandemic. On March 18, Congress passed and Trump signed into law the Families First Coronavirus Response Act, which expanded unemployment benefits and gave grants to states for processing and paying unemployment claims.
The federal government also previously issued guidance to states to allow more flexibility with granting unemployment benefits to employees who can't go to work because their workplace was shut down, to workers who are quarantined, and to those who leave work due to a risk of exposure or infection or to care for a family member.
The novel coronavirus, which has infected more than 436,000 worldwide and killed more than 19,600, has also dealt a huge blow to the economy and will likely cause a global recession.
Get the latest coronavirus analysis and research from Business Insider Intelligence on how COVID-19 is impacting businesses.
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