EDITORIAL: Biden won’t extend jobless bonus — or will he?

Many Democrats continue to insist that paying people more to sit on the couch than to work is in no way connected to the difficulty that many employers have today finding new hires. But small and large companies operating in the real world received a modicum of good news this week when the White House announced there would be no extension of the federal unemployment bonus that is set to expire Sept. 6.

The only question is whether President Joe Biden will have the will to follow through. His track record indicates that’s no sure thing.

“The temporary $300 boost in benefits will expire on September 6th, as planned,” Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh wrote in a letter to Congress on Thursday. “As President Biden has said, the boost was always intended to be temporary and it is appropriate for that benefit boost to expire.”

Ms. Yellen and Mr. Walsh cited the improving economy as a reason to move forward from what was supposed to be temporary help during an unprecedented pandemic. The U.S. jobless rate is 5.4 percent, and the governors of many states — though not Nevada — have already refused to provide the added benefit as an incentive to get more workers back on the job. A paper published by JPMorgan Chase &Co. Institute estimated that, thanks to the $300-a-week supplement, 48 percent of jobless workers made more from unemployment than from their previous paychecks.

Despite the administration’s announcement, there will be pressure on the president to reverse course and extend the added unemployment stipend. There is a large progressive contingent who would seek to make permanent the emergency welfare measures implemented to help Americans survive business lockdowns and job losses. Witness what happened with the eviction moratorium when Mr. Biden caved to his left flank after assuring landlords that the CDC eviction ban would run its course as scheduled.

Some observers doubt the president will pull a similar el-foldo this time. “There’s almost nobody talking about extending the benefits,” Andrew Stettner, a senior fellow at The Century Foundation, a progressive think tank, told CNBC. We’ll see. The administration has already tipped its concern about potential criticism by telling states they may use the billions they’ve received from federal taxpayers under the guise of virus relief to continue padding unemployment checks.

Gov. Steve Sisolak may have such a move in mind given that Nevada’s jobless rate sits above the national number and some casinos remain closed or below regular staffing levels. But the longer such market distortions remain in place, the more difficult the road to full recovery.