North Carolina would do away with the $300-per-week supplemental benefits for the unemployed provided by the federal government during the pandemic in legislation approved Thursday by the state House.
The roughly 245,000 people in North Carolina currently qualified for unemployment benefits are receiving the Federal Pandemic Unemployment Compensation on top of their other state or federal aid. The program is set to expire nationwide in early September, but about two dozen states already have decided to cut off the supplement early.
Many Republican legislators and governors say the benefits are serving as a disincentive for the unemployed to return to the workforce, especially when their overall benefits exceed their pre-pandemic pay at work.
GOP legislators in North Carolina say employers tell them they can't fill vacancies despite the lure of higher wage offerings and bonuses, harming major industries like manufacturing and restaurants and hotels. Under the bill, the extra benefits would expire 30 days after the bill became law.
"We want to make sure our economy is not lagging behind," said Rep. Jason Saine, a Lincoln County Republican shepherding the measure, pointing out that Tennessee, Georgia and South Carolina have already decided to withdraw from the supplemental program. "I do believe this is a way to move our state forward and get back to work."
Democrats said eliminating the benefits would harm people still struggling to cover their rent because of lost wages, and overall employment, while improving, remains below pre-pandemic levels.
"This is precisely the wrong time to cut that assistance," said Rep. Brandon Lofton, a Mecklenburg County Democrat. "We're taking money out of the people's pockets during a recovery."
Still, seven Democrats joined all Republicans present in voting 71-36 for the measure, which also contained previous changes already approved by the chamber in a separate bill.
Speaker Tim Moore sweetened the bill with an amendment that would spend $250 million in federal COVID-19 relief aid on eliminating the individual waiting list for government subsidies for child care. Paying for day care is considered a major stumbling for mothers to return to work.
"I can think of nothing that signal more the commitment of this House to ensuring that everyone who is able to work is able to do so," Moore said.
The measure next returns to the Senate, which passed a separate measure this week that would keep distributing the supplemental benefits but also create bonuses using those federal funds for people who return to work within 60 days of its enactment. But the initiative — offering bonuses of $1,500 or $800 — would need approval by Congress should those federal dollars be used.
Senate leader Phil Berger said later Thursday he didn't know yet whether fellow Republicans in his chamber were interested in ending the program, rather than just repurposing some of the money.
The House measure revives a pair of provisions that the chamber approved in April but has stalled in the Senate. One item would allow recipients of federal Paycheck Protection Program loans to treat those proceeds as business expenses that could be deducted from their state income taxes in 2020 and 2021. The other provision would exempt the first $10,200 of unemployment benefits from a person's 2020 income taxes.
Senators have frowned on the tax adjustments, but instead last week pitched a grant program for businesses and nonprofits who received pandemic aid.
Any bill receiving final approval would go to Democratic Gov. Roy Cooper, who has shown little sign of wanting to do away with the benefits. But he issued an executive order last month telling the Division of Employment Benefits to talk with federal officials about ways to use federal funds as incentives for jobless workers who find employment.
