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Expiring Unemployment Programs Could Leave Millions Out in the Cold

Michael Rainey
·3 min read

Two federally funded unemployment programs are scheduled to expire at the end of December, threatening about 13 million people with a loss of benefits in the new year. The loss of income support could leave millions at risk of eviction and hunger, Ben Casselman of The New York Times writes Wednesday, while creating an additional drag on an economy that is already slowing as it recovers from one of the most severe economic shocks on record.

The emergency aid programs were created by Congress through the Cares Act in March. The Pandemic Unemployment Assistance program provides aid to workers who are usually left out of the system, including gig workers and the self-employed. It allows for 46 weeks of benefits, administered through state employment offices, covering February 2, 2020, to December 26, 2020. There were 9.3 million people participating in the program as of the middle of October (though experts say the number is likely inflated to some degree by double counting and other administrative errors).

The second program, Pandemic Emergency Unemployment Compensation, provides a 13-week extension of support for workers who have exhausted their state benefits. The program, which will expire at the end of the year, has seen a big jump in participation in recent weeks as people hit the time limit on their state benefits, which typically last for 26 weeks. The number of long-term unemployed – which is usually defined as out of work for more than 26 weeks – rose to 3.6 million in October, an increase of more than 1 million.

Savings depletion: Many unemployed workers saw an income boost in the spring and early summer, as $1,200 relief checks and enhanced unemployment benefits hit their bank accounts. The Cares Act created a third program, called Federal Pandemic Unemployment Compensation, which provided an additional $600 per week in jobless benefits for all unemployed workers, but it expired on July 25. The Trump administration provided a few weeks of additional payments at about half that level, but that effort has also come to an end. As a result, unemployed households have started drawing down their savings and now face an income deficit that will become more severe as the emergency aid programs come to an end.

“The safety net still has kind of held up until now, and I think we have been maybe lulled into a sense of complacency,” Andrew Stettner of the Century Foundation told Casselman. “We’re just putting people in this really precarious financial position where the damage of unemployment can just hit really hard.”

Relief bill stuck in neutral: Congressional leaders and the White House have been negotiating another coronavirus stimulus bill that would include new funds for unemployment benefits for months now, but real progress remains elusive. House Speaker Nancy Pelosi (D-CA) is still pushing for a relief package worth more than $2 trillion, but Senate Republicans have signaled that they won’t go anywhere near that high, and instead are focused on a smaller bill totaling closer to $500 billion. The White House, which before the election said it would support a $1.9 trillion bill, appears to have left the playing field entirely as the administration turns all of its attention to contesting the election (“Trump's public schedules show little interest in work,” a CNN headline said Wednesday).

Speaking about the stimulus bill Tuesday, Senate Majority Leader Mitch McConnell (R-KY) leader said he saw no signs of progress: “We need to think about, if we’re going to come up with a bipartisan package here, about what size is appropriate. It seems to me that snag that hung us up for months is still there. I don’t think the current situation demands a multitrillion-dollar package. So I think it should be highly targeted, very similar to what I put on the floor both in October and September.”

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