Negotiations could be ongoing for unemployment relief: Washington policy analyst

Ed Mills, Raymond James Washington policy analyst, joins "Closing Bell" to discuss the second stimulus bill that will provide unemployment relief and more PPP. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Senate Majority Leader Mitch McConnell revealed on Monday the Senate’s Health, Economic Assistance, Liability Protection and Schools, or HEALS, Act, a $1 trillion package proposal for the next round of coronavirus relief.

The proposal outlines a second round of $1,200 economic impact payments; legislation to shield entities such as businesses, doctors and schools from certain lawsuits; and funding to Paycheck Protection Program loans, schools, coronavirus testing and vaccine development efforts.

One major section of the HEALS Act proposes a drop in enhanced unemployment benefits from the current $600 per week to a new $200 weekly boost, on top of state-administered aid, until the end of September.

According to a CNBC analysis of Labor Department data, this would cut the average worker’s unemployment benefit by 43% to about $521 in total benefits per week, accounting for both state and federal aid.

That amount could range widely depending on the state; with the $200 weekly boost, new benefits under the proposal could reach an average high of $697 per week in Washington or as low as $244 per week in Oklahoma.

By October, the federal boost will be replaced with a payment that, when combined with regular state benefits, will recover 70% of the worker’s previous wages. The replacement rate will be calculated either by a formula specified in the bill or by a state proposing an alternative method and receiving approval from the Secretary of Labor, meaning the method of calculation could vary by state. Boosts will be capped at $500 per week.

The 70% replacement calculation has raised concerns among Democratic leaders and policy experts who believe state unemployment systems will be unable to handle making such targeted payments to such a large volume of recipients. Roughly 32 million Americans are currently receiving jobless benefits — about five times the level of the Great Recession.

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