With the lame duck session of Congress beginning, federal policymakers are reviving stimulus negotiations that stalled before the election. Differences between the sides remain significant, with House Democrats insisting on over $2 trillion in new spending while Senate Republicans propose around $500 billion in additional aid. It’s uncertain whether negotiators will reach an agreement before the end of the year. But if they do, lawmakers should avoid more one-size-fits-all federal policy, especially since economic conditions have improved significantly in many states. They should try a little federalism instead.
A key set of issues involves whether to revive $600-per-week federal unemployment bonuses that expired in July, as well as extend other temporary unemployment benefits scheduled to expire in late December. For example, Democrats insist on reviving $600 bonuses in all states, while Republicans have offered $300 add-ons in all states instead. But neither of those approaches makes much sense in the real world, where state recoveries vary widely.
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