By Victor Reklaitis, MarketWatch
‘It’s something we’re looking at very carefully.’
Larry Kudlow, White House economist
The line above came Tuesday from top White House economist Larry Kudlow, as he talked with Fox News about the Trump administration’s interest in Sen. Rob Portman’s proposal of providing $450 a week for individuals returning to work.
“Sen. Portman has a good idea. He understands incentives and disincentives,” Kudlow said, adding that the CARES Act’s $600 supplemental unemployment benefit may have been needed initially, but it’s now a “major disincentive to go back to work.”
The Republican Portman, Ohio’s junior senator, said last week that “instead of keeping in place the additional $600 of the federal benefit for people on unemployment between now and July 31st,” Washington should “shift some of those federal dollars to a back-to-work bonus.”
Kudlow on Tuesday said the “$600 plus-up” will not “survive the next round of talks,” referring to negotiations between the GOP and Democrats over another coronavirus aid package. The Democrat-run House is aiming to extend that $600 supplemental unemployment benefit to January 2021 and has included it in its $3 trillion HEROES Act.
President Donald Trump continues to support to a payroll-tax holiday that “would increase after-tax income by 7.6%,” Kudlow also said.
U.S. stocks /zigman2/quotes/210599714/realtime SPX +1.34% /zigman2/quotes/210598065/realtime DJIA +2.13% are trading well below their February peaks after the coronavirus pandemic forced the shutdown of businesses and travel, but they have rallied from their March lows thanks in part to optimism around Washington’s aid efforts. The Dow Jones Industrial Average and S&P 500 were sharply higher on Tuesday.