Senate Democrats to reduce jobless aid boost in Covid relief bill but extend it another month

• Senate Democrats have agreed to a change in their $1.9 trillion coronavirus relief plan to reduce the additional federal unemployment insurance payment to $300 per week but extend it through September rather than August.
• The proposal would also make the first $10,200 in unemployment insurance benefits nontaxable.
• Democrats aim to get the bill through the Senate this weekend, then pass in the House and to President Joe Biden's desk before unemployment aid programs expire March 14.

Senate Democrats have agreed to cut the weekly unemployment insurance supplement in their $1.9 trillion coronavirus relief bill but extend it for a longer period of time, CNBC confirmed Friday.

The party plans to make the change Friday during a marathon of votes on amendments known as a vote-a-rama. Sen. Tom Carper, D-Del., will propose the plan.

The Senate would maintain the federal jobless benefit supplement at the current $300 per week level, rather than increase it to $400 as a House-passed bill did. The change would keep the policy in place through September, rather than end it on Aug. 29 as the House plan did.

The proposal would also make the first $10,200 in unemployment insurance untaxed. The provision aims to prevent surprise tax bills for beneficiaries.

The change to unemployment aid programs marks the latest concession from Senate Democratic leaders to moderate lawmakers, after they agreed to limit the number of people who would get $1,400 direct payments. The party has to appease all 50 members of its caucus to win a simple majority vote, the baseline needed under budget reconciliation, in the chamber split evenly by party.

The revision to unemployment policy will also appeal to senators led by Democrat Ron Wyden of Oregon, who worried about millions of Americans suddenly losing financial support when the jobless benefit programs expired in August. Provisions providing a boost to unemployment benefits and extending eligibility for them lapsed once last summer. Congress did not renew them until December.

Wyden has called to tie the jobless aid to economic conditions so that it does not expire before the economy recovers. In opposing the relief bill, some Republicans have contended a $400 per week unemployment boost would discourage people from returning to work. They made the same argument when lawmakers approved a $600 per week supplement last year, but some research suggests the policy would not have a major effect on people deciding to seek jobs.

Democrats aim to approve their latest rescue package before March 14, the day when the current $300 per week unemployment benefit expires.

Senate Democrats hope to pass the bill by this weekend. Republicans can drag out the process, as they face no limit on the number of amendments they can offer to the plan.

The House aims to approve the Senate version of the plan by next week and send it to President Joe Biden to sign into law.

— CNBC's Ylan Mui contributed to this report

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