If Congress doesn’t act to extend an extra $600 in weekly benefits for unemployed Californians, state legislators say they’re ready to jump in to prevent benefits from plunging during the pandemic.
The expanded federal unemployment benefits, which began in April, are set to expire Friday. That will reduce the average jobless payment in California to about $338 a week.
The House passed a coronavirus relief bill in May that would extend the $600 weekly checks through Jan. 31, but the GOP-led Senate has yet to act. Republicans released a package late Monday that proposes to cut the aid to $200 a week.
Democratic legislative leaders unveiled an outline of their proposal Monday to extend the $600 payments as part of a $100 billion stimulus plan designed to ease the damage the pandemic is causing to Californians and the state’s economy.
“Millions of Californians are suffering in this economic downturn, and Republicans in Washington, D.C., don’t seem to care,” Assembly Speaker Anthony Rendon, D-Lakewood (Los Angeles County), said in a statement.
Legislators said that they intend to fill any gaps in the $600 unemployment benefit if Congress approves a smaller amount, and that they want to extend the payments to undocumented immigrants who have lost their jobs.
Legislative leaders said the additional benefit is crucial to prevent an economic collapse and ensure working families can keep their housing and pay for groceries and other necessities.
Many lawmakers said the stimulus plan would shorten the recession and spur job growth. Without aggressive intervention, they warn, the long-term impacts of the pandemic could be far worse.
Assemblyman Phil Ting, a San Francisco Democrat who chairs the budget committee, was part of a group of legislators who helped craft the outline over the last four months.
“We’re hearing from so many people that they’re one unemployment check away from getting evicted, from losing their home,” he said. “If we can forestall financial disaster for them, there’s a huge long-term benefit for those families, but also for the state.”
He called the bill “a huge economic stabilizer.”
The outline of Democratic legislators’ proposal calls for immediately expanding a host of safety-net programs for people and small businesses, though it provides few details about the cost or scope. Among the proposals:
• Expand the earned-income tax credit, an assistance program for low-income filers.
• Help schools cover the costs of reopening for in-person education, and provide more funding to expand broadband access in underserved communities for students being taught online.
• Protect renters from eviction and give support to struggling homeowners and landlords. Legislators are already considering measures to extend a freeze on evictions and foreclosures.
• Expand tax breaks for small businesses, and expand a program that allows them to delay paying sales taxes.
• Create incentives for California companies to manufacture masks and other protective and testing equipment.
Legislators said they estimate the stimulus package could total $100 billion. They outlined a host of unconventional accounting moves that could bring in the extra money, many of which involve borrowing against expected future revenue.
One maneuver would allow California to sell tax vouchers, which would allow companies to prepay their taxes for future years at a discount.
The plan also calls for borrowing money from several sources. For example, legislators said the state could borrow and repay debt with revenue from utility fees, transportation funds or cap-and-trade auctions.
In many ways, the outline is more of a wish list than a detailed plan, but it will help set the tone as legislators negotiate with Gov. Gavin Newsom. They have little time to get a major deal done — the Legislature is scheduled to adjourn for the year Aug. 31, though Newsom could call lawmakers back for a special session.
The governor declined to comment immediately on the plan released Monday.
“I would be remiss to comment until I have a chance to review the details,” Newsom said at a news conference. “We have to include a framework of bringing people along as we reopen our economy.”
Legislators said they also want to create jobs by increasing spending on infrastructure projects. Their plan calls for issuing bonds more quickly to accelerate road repairs.
The plan also calls for funding projects to combat climate change and pollution. Legislators said they want to create green jobs by investing in wildfire prevention efforts, clean drinking-water systems, new recycling facilities and charging stations for electric cars.
“As the old adage goes, don’t let a crisis go to waste,” Assemblyman Kevin Mullin, D-South San Francisco, said in a statement. “Now is the time to take decisive action to stimulate the California economy by investing in infrastructure with an eye toward a cleaner economy.”