Bleak outlook for millions facing aid cutoff
Biden calls on Congress to approve bipartisan COVID-19 relief package
INDIANAPOLIS – Tina Morton recently faced a choice: Pay bills or buy a birthday gift for a child? Derrisa Green is falling further behind on rent. Sylvia Soliz had her electricity cut off.
Unemployment has forced aching decisions on millions of Americans and their families during a rampaging viral pandemic that has closed shops and restaurants, paralyzed travel and left millions jobless for months. Now, their predicaments could become bleaker if Congress fails to extend two unemployment programs that are set to expire on the day after Christmas.
“That’s really scary, because what are we going to do when we lose the unemployment money?”
Derrisa Green
If no agreement is reached on Capitol Hill, more than 9 million people will lose federal jobless aid that averages about $320 a week that typically serves as their only source of income.
An end to their unemployment benefits would force Green, 39, and her husband to keep missing rent payments on their home in Dyer, Indiana, near Chicago. They have eight children. Green’s husband is a self-employed truck driver whose business disappeared when the pandemic erupted in the spring. Only in October did pick up occasional work.
He now receives about $235 a week in unemployment aid. Even so, “all of our bills are late,” Green said. They’ve received several shutoff notices from utilities before managing to pay just before service was to be cut off.
“That’s really scary,” Green said, “because what are we going to do when we lose the unemployment money?”
The U.S. recorded 228,000 additional confirmed coronavirus cases Friday, passing the previous high mark of more than 217,000 cases set one day earlier. The seven-day rolling average of COVID-19 attributable deaths in the U.S. has passed 2,000 for the first time since spring, rising to 2,011. There were 2,607 deaths reported in the U.S. on Friday.
The end of jobless aid is approaching at a perilous time. Job growth slowed sharply in November, and the resurgence of viral cases appears to be out of control across the country.
Even with the prospect of an effective vaccine being widely distributed in coming months, economists say the picture will worsen before it improves. Many foresee a net loss of jobs in December for the first time since April.
On Friday, President-elect Joe Biden called on Congress to approve a bipartisan $908 billion package that would establish a $300-a-week jobless benefit as well as send aid to states and localities, help schools and universities, revive subsidies for businesses and support transit systems and airlines. Details are still being worked out, but the outlines of a final bill could emerge soon.
More than 20 million people are receiving unemployment benefits. More than half are beneficiaries of two programs that were part of rescue aid legislation Congress enacted in March. One program made self-employed and contract workers eligible for jobless aid for the first time and provided 39 weeks of support. The other program supplied 13 weeks of extended benefits to the 26 weeks that most states provide.
About 9.1 million who are receiving aid from those programs will be cut off Dec. 26, according to a report from the Century Foundation. An additional 4.4 million are expected to exhaust all 39 weeks by year’s end. If Congress agrees to provide more weeks of aid and to revive both programs, those beneficiaries could keep receiving aid next year.
A cutoff of jobless benefits now, with so many millions of Americans still receiving the aid, would be unusually early compared with previous recessions. After the Great Recession of 2008-2009, the government extended unemployment benefits to 99 weeks, and the additional aid lasted through 2013. When that program ended, about 1.3 million people lost benefits, a small fraction of the number who would lose aid this time.
Other government protections will also expire at the end of this year, including a federal moratorium on evictions for renters. A suspension of payments on federal student loans will expire at the end of January.
“I am very afraid of people facing homelessness – that’s our top concern,” said Andrew Stettner, a senior fellow at the Century Foundation. “It’s a terrible unforced policy error to make. It will slow the recovery that we’re having by cutting off these benefits so early.”
About one in six renters in the U.S. is behind on rent, according to a survey from the Census Bureau. And 12% of adults say their families didn’t have enough to eat at some point in the past week, the survey found. That’s up from just 3.7% in 2019, according to the leftleaning Center on Budget and Policy Priorities.
A wrenching set of choices has confronted Keli Paaske, who lives in the Kansas City area. Since being furloughed in the spring from her sales job at a company that makes fire doors, Paaske, 56, cut back her grocery budget. She thought she’d be called back once the virus waned. But when her boss phoned in August, it was with a different message: Her job was eliminated.
Paaske had hesitated to spend $360 needed to euthanize her 15-year old dog, who had a brain tumor, before going through with it. Without unemployment aid, Paaske isn’t sure how she would manage. She may seek financial help from her parents, who are in their 80s, something she has resisted doing.