Congress must extend unemployment benefits
As painful as the COVID19 recession has been for many Americans, the abrupt downturn could have been far worse. And perhaps the smartest action taken by the federal government so far has been those expanded unemployment payments made possible by the Coronavirus Aid, Response and Economic Security (CARES) Act. In Maryland, for example, the payout has been exceptional (if not always easily navigated by applicants). State officials estimate that from March 9 to June 20, unemployment payments in Maryland totaled $3.3 billion of which $1.3 billion comes from Pandemic Unemployment Assistance for folks who wouldn’t have otherwise qualified for any form of assistance. Another $46 million went to people who had already exhausted their normal 13 weeks of benefits.
That’s a major reason why the record high unemployment rate in the United States of 13.3% doesn’t really feel quite as disastrous as that number suggests. Families have been kept afloat, landlords have been kept in business, grocery stores and other essential merchants are doing a brisk trade, and even the stock market, while an imperfect economic barometer, is roughly where it was valued last August. In other words, of all the failings of Washington during the pandemic from its initial laxity to its bizarrely muddled message on testing and mask-wearing, the CARES Act, and particularly those $600 unemployment booster checks, have been one thing that Democrats and Republicans did not get wrong.
Now, here’s the problem: The bottom of that is about to fall away.
First up are those $600 expanded benefits checks. They are due to stop coming on July 31. And while clearly that benefit can’t be maintained forever (at least not without the means to pay for it), ending them in a month looks like a terrible idea. The number of new cases overall has been rising since midJune with states like Arizona, Florida and Texas becoming the latest hot spots. And it’s not just new cases, positivity rates and hospitalizations are up as well. And that’s caused some states to impose new restrictions to improve social distancing. Yet, even with those orders, some project U.S. COVID-19 deaths will rise significantly in July.
That worsening health outlook combined with the loss of unemployment insurance income for millions of Americans could prove a disastrous 1-2 punch. Given that reality, Congress ought to be moving forward with some sort of extension to reassure Americans (and the markets) that the federal government still has the economy’s back.
No doubt there are some individuals who are, in fact, bringing home more money with more generous unemployment benefits than they did when they were working. But so what? This isn’t forever, and we don’t hear Congress making the same complaints about far greater (and usually more permanent) windfalls when it hands out lucrative tax avoidance schemes to billionaires. And unlike the super rich, Expanded unemployment benefits represent a safety net that’s working right now. July is not the month to drop it.