About 12 million Americans are at risk of losing unemployment benefits the day after Christmas because two critical programs in the CARES Act will expire. According to a report from the progressive think tank The Century Foundation, that is about half of the 21 million people currently collecting unemployment insurance, published on Thursday. The group also estimates that about 4.4 million more workers have already exhausted their benefits. Over 16 million people will “be heading into 2021 with little or no aid available to them,” the report reads.
In March, Congress passed the CARES Act, which included the Pandemic Unemployment Assistance (PAU) and Pandemic Emergency Unemployment Compensation (PEUC) programs. The PAU was established to help gig workers and freelancers who would not usually qualify for unemployment reports CNBC. The PEUC program provided 13 more weeks of unemployment insurance (UI) for those running through state benefits.
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Congress would have to pass new legislation in the next few weeks to extend both programs. However, that seems unlikely as talks between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin stalled after the election. Senate Majority Leader Mitch McConnell adjourned the Senate until after Thanksgiving. On Thursday, staff for Pelosi, Senate Minority Leader Chuck Schumer, McConnell, and House Minority Leader Kevin McCarthy met to discuss coronavirus relief; sources told Fortune. McConnell has stood by his support for a small “highly targeted” bill rather than a massive $2.2 trillion package like one Democrats have supported.
The talks could also be held up while Congress awaits the Georgia Senate run-off election results on Jan. 5, which will decide if Republicans hold the Senate majority. In the interim, here’s a look at the state of unemployment insurance if nothing is done between now and Christmas.
TCF estimates millions of households won’t be able to afford basic needs without help
In its report, TCF report authors Andrew Stettner and Elizabeth Pancotti spelled out the importance of unemployment insurance for millions of Americans and its larger impact on its economy. “Without unemployment benefits and with savings badly depleted, families will be at high risk for food insecurity and loss of their homes, and many may be unable to pay for health care during some of the darkest days of the pandemic,” the two wrote. “The nation’s entire economy will suffer. While there are major political challenges to reaching a stimulus relief deal before the holidays, jobless workers cannot wait until January. The stakes are simply too high.”
The authors also pointed out that the hard cutoffs for the programs mean that even if you received less than 13 weeks of PEUC assistance or less than 39 weeks of PUA assistance by the time the programs end, you will still not receive 13 or 39 weeks of assistance. They noted that previous relief programs, like the 2009 American Recovery and Reinvestment Act, had “soft” cutoffs, so people would receive full benefits, even if the program ended.
The $600 federal unemployment program expired in July
While the CARES Act’s $1,200 stimulus check grabbed plenty of headlines after the bill was signed, it also included a $600 enhanced federal unemployment program. This program expired at the end of July. Each state has different unemployment programs, but the federal program was set to be in addition to the state benefits. As CNET points out, people laid off or furloughed are eligible for unemployment benefits from your home state. The CARES Act also extended state unemployment benefits to a maximum of 39 weeks instead of 26.
A Trump executive memo used FEMA funds to send $300 in unemployment benefits for six weeks
In August, President Donald Trump made a big deal out of an executive memo he signed that ordered FEMA funds to be used for an extra $300 weekly unemployment benefit for just six weeks, retroactively to Aug. 1, called the Lost Wages Assistance Program. Trump also asked states to provide an extra $100 a week to bring the benefits to $400, but this was optional for states. Every state except South Dakota applied for the assistance. Arizona started on Aug. 17 ad almost there are only a few states left still providing the $300 weekly benefit. Those are New Jersey, Nevada, Hawaii, Wisconsin, Alaska, Virginia, Arkansas, and Kansas.
Democrats’ HEROES Act included an extension of the federal unemployment program
There still has not been a major coronavirus relief package passed since the CARES Act. Since then, House Democrats have passed two different versions of the HEROES Act. The first cost over $3 trillion, but another one was passed this fall that cost over $2 trillion. Neither package was taken up by the Senate. The May version of the HEROES Act proposed extending the $600 enhanced benefit, PAU, and PEUC programs until Jan. 31, 2021. The version passed in the fall extended the programs through Jan. 31 and retroactively began the program to Sept. 6.
The two sides discussed unemployment insurance during recent talks
Talks between Democrats, Republicans, and the White House have stalled since the end of the election. Trump has not mentioned the stimulus talks himself, instead of focusing on an attempt to overturn the election results despite no evidence of widespread voter fraud. On Thursday, Schumer claimed Republicans agreed to COVID relief talks, but Republicans said they merely agreed to meet about renewing the government funding bill by the Dec. 11 deadline, reports Politico. The two sides did discuss some COVID relief programs, including unemployment assistance. They did not specifically talk about a big COVID relief deal. Politico suggests the existing CARES programs could be renewed in the government spending bill.
Long-term unemployment continues to climb during the pandemic
As the coronavirus continues to spread and the number of cases spikes, more Americans are expected to face unemployment. As CNBC notes, the long-term unemployment numbers were climbing even before the recent spikes. According to the Bureau of Labor Statistics data, workers without employment for 27 weeks or more climbed from 19.1% to 32.5% in October. TCF’s report warned that there are “simply not enough jobs being created to support all of the workers running out of aid before the end of 2020.” About 3.6 million Americans are among the long-term unemployed.
“Long-term unemployment doesn’t count into the unemployment rate,” Michael Evermore of the National Employment Project told The Guardian. “We’ve seen in the last two months the two biggest increases in long-term unemployment in history.” The 6.9% unemployment rate the Trump Administration points to show success does not include the long-term unemployed.
