Political divisions have arisen over the call to extend a novel coronavirus-inspired federal unemployment benefit past its scheduled July 31 expiration, with leftist academics and think tanks arguing millions will be imperiled without it and right-leaning economists saying any economic recovery will be slower if it remains.

At issue is the portion of the Coronavirus Aid, Relief and Economic Security (or CARES) Act passed in March that added an extra $600 weekly benefit to whatever state payment was issued to those filing for COVID-19-related unemployment compensation.

But that had a sunset provision at the end of July and a debate has arisen over whether to continue it.

Arindrajit Dube, an economics professor at the University of Massachusetts Amherst, used Twitter to call letting the federal payments lapse a “terrible idea,” CNBC reported.

The $600 is on top of a weekly state benefit that averages $378, CNBC said.

Heidi Shierholz of the left-leaning Economic Policy Institute argued in a June 18 blog post for not only extending the benefit, but also expanding other programs such as the Supplemental Nutrition Assistance Program, or SNAP – commonly referred to as food stamps.

“Further, the across-the-board $600 increase in weekly unemployment benefits, which was one of the most effective parts of the CARES Act on both humanitarian and economic grounds, should be extended well past its expiration in late July,” she wrote.

The Urban Institute in an April 23 blog post argued for extending the benefits or recipients would fall off an “income cliff.”

CNBC noted that critics of extending the benefit point out that the program is ripe for fraud and that 40% of the recipients could earn more unemployed than by working, which creates an incentive to remain out of the labor force.

The Congressional Budget Office, in a June 4 letter to Sen. Chuck Grassley, R-Iowa, said that if the benefit was extended to Jan. 31, five out of six recipients would receive more by remaining unemployed that if they worked.

It also said the country’s economic output would be greater without the extension than with it.

CNBC quoted Matt Weidinger at the right-leaning American Enterprise Institute who studies unemployment insurance as saying the benefit was added as an incentive to get people to remain home to slow the spread of “once-in-a-lifetime” public health issue. With states ending or at least easing restrictions, Congress would have to come up with a justification for continuing it.

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