Democrats and Republicans have still not been able to agree on a second stimulus package. Their failure to come up with another stimulus package has hurt the country’s economy, as Politico reported. This news comes almost a month after lawmakers in Congress allowed the additional $600 per week in unemployment benefits to expire, which has led to many workers seeking jobless aid amidst the ongoing coronavirus pandemic.
Politico reported that there are two specific reasons why the economy is hurting right now. The first reason ties back to those aforementioned enhanced unemployment benefits, which were provided under the CARES Act and which expired at the end of July. Additionally, the program that provided more than $500 billion in small business loans to keep workers employed also expired. The CARES Act’s enhanced unemployment benefits added around $25 billion into the economy during the four months that it was in place (from March to the end of July). Now that those benefits have expired, that figure is now closer to $10 billion, according to former U.S. Treasury economist Ernie Tedeschi.
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The economist said that this would have “devastating individual implications for the families that receive that payment and also going to have economic implications for America as a whole.” Tedeschi added, “When you have $60 billion less going to families that means that there’s going to be something close to that less in spending.” Since many Americans have less money to spend on groceries, gas, and other necessities due to this lapse in unemployment benefits, there has been a negative impact on the labor market. According to Nick Bunker, an economic research developer at Indeed Hiring Lab, businesses that have been affected by this lack of consumption have subsequently started to hire fewer workers. Listings for jobs related to beauty and retail have all been falling as of late. Bunker said, “Really the last few weeks we’ve started to see a significant slowdown in the trend in job postings.”
Americans have been calling on Congress to take action amidst the ongoing coronavirus pandemic. As of right now, Congress is on recess until after Labor Day. But, lawmakers have expressed that they are open to continuing negotiations. Speaker of the House Nancy Pelosi told CNN on Sunday, “We all want the negotiations to continue, but not just what the administration wants, but what the country needs.”
