Billionaire Tilman Fertitta on Tuesday called on Washington politicians to extend the enhanced unemployment benefits that were put in place due to the coronavirus pandemic, contending the extra payments are still needed to support the U.S. economy.
“Even though it could cost me some of the employees I want back, let’s keep the economy going,” Feritta, chairman and CEO of restaurant giant Landry’s, said on CNBC’s “Power Lunch.” “It took us 12 years to get it where it is, and this administration has made a lot of good calls. Let’s do it for at least another 90 days.”
The $2.2 trillion CARES Act, signed into law in March, included a temporary increase to unemployment insurance of $600 per week. But that provision is set to expire at the end of July, absent government action to extend it.
Fertitta, whose business empire includes more than 600 restaurants and Golden Nugget casinos, said he believes the additional weekly payments have been a driving force behind the strong rebound in consumer spending as U.S. states relax coronavirus restrictions.
Retail sales in May rose 17.7% compared with the prior month, a rebound that exceeded estimates from economists.
“I think one of the reasons you’re getting these spikes in retail sales and restaurants and grocery stores still, wherever people can spend money, is because of the $600 check,” said Fertitta, who also owns the NBA’s Houston Rockets.
Spending at restaurants and casinos, in particular, will “taper off quicker than you would think” if the extra benefits expire, he said.
Fertitta acknowledged concerns held by some Washington lawmakers, who contend the extra payments may serve as a disincentive for people to return to work because they actually make more money on unemployment than they did while working.
Some politicians have offered plans to combat that. For example, Sen. Rob Portman, an Ohio Republican, has a proposal that would pay people who return to work an extra $450 a week. Larry Kudlow, top White House economic advisor, has said the Trump administration is considering some sort of back-to-work “bonus.”
House Democrats have passed a relief package that would extend the $600 weekly unemployment payments into early next year, but the bill was a nonstarter in the Republican-controlled Senate.
Fertitta said he thinks the benefits of extending the enhanced unemployment insurance are greater than any potential downsides. There are too many people who remain unemployed — about 21 million as of May — that cutting off the benefits would curtail consumer spending, he contended.
“Most people want to come back to work because they’ve been sitting at home for three months, and they were losing their minds,” Fertitta said.
“If a few people get caught in the web and it’s a good deal for them because they’re coming back to work and they’re giving it up, it’s OK,” Fertitta said. But for the millions who remain unemployed, “let’s keep the stimulus going … to keep spending the money.”