Democrats are unlikely to extend federal unemployment benefits after they expire in 2 weeks


House Democrats are unlikely to include an extension of federal unemployment benefits in their planned $3.5 trillion spending package, according to House Budget Chair John Yarmuth.

"I haven't heard any interest in extending [enhanced unemployment insurance]," the Kentucky Democrat told Insider. "It's not been part of the discussion."

All pandemic aid programs for those experiencing joblessness are slated to expire at the federal level in two weeks. That includes Pandemic Unemployment Assistance for gig workers and freelancers, along with another federal initiative providing payments to people who maxed out state benefits. A recent analysis from the left-leaning Century Foundation projected 7.5 million people would lose all unemployment aid after Sept. 6, the expiration date.

Yarmuth's remarks serve as a candid assessment of a UI extension's odds among House Democrats. Senate Democrats are also unlikely to pursue an extension due to resistance from moderates in their ranks.

Sen. Joe Manchin of West Virginia told Insider earlier this month he didn't support extending enhanced unemployment insurance. 

"I'm done with extensions. The economy is coming back," he said. Other moderates including Sen. Angus King of Maine also indicated recently he was reluctant to back it.

Democrats are using an arduous process known as reconciliation to secure passage of a $3.5 trillion spending plan to bypass Republican opposition, but it requires that Democrats don't break ranks.

The Biden administration recently told states they could use leftover aid money from the $1.9 trillion stimulus law to extend jobless benefits on their own.

While some have blamed the COVID-19 unemployment benefits for sluggish job growth in recent months, a July analysis found that people did not immediately return to work in some states that cut the federal unemployment insurance early. 

Economists say that the risk of getting infected along with school closures and a lack of childcare are among the factors impeding people's ability to return to work.

​​New research in August found that ending unemployment benefits early led to significantly less spending — a nearly $2 billion drop across the states that cut the benefits in June. And as federal benefits are cut starting in September, researchers predict the rollback could lead to $8 billion less in spending throughout September and October.