The worsening viral outbreak coincides with the impending expiration of two federal unemployment programs at year’s end that could eliminate benefits for 9.1 million people, according to a report from The Century Foundation. Congress has so far failed to agree on any new stimulus package for jobless individuals and struggling businesses. The cutoff of aid will sharply reduce income for the unemployed, force a further reduction in their spending and perhaps weaken the economy.
First-time jobless claims fall to 751,000 as GDP soars 33.1%
The expiration of benefits will make it harder for the unemployed to make rent payments, afford food or keep up with utility bills. Most economists agree that because unemployed people tend to quickly spend their benefits, such aid is effective in boosting the economy.
Cutting off benefits with several million people still unemployed would be unusually early compared with previous recessions. In 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 fraction of the number who would lose their aid at the end of this year.
In March and April, when the pandemic erupted in the United States, tens of millions of people applied for jobless aid. Though many of them have been rehired or have landed new jobs, those who haven’t found work began exhausting their six months of state aid as early as September.
Democrats and Republicans on Capitol Hill continue to be at odds over the passage of a $3 trillion stimulus relief bill, which President-elect Joe Biden is supporting.
In its weekly internal report, the White House Coronavirus Task Force warned of an “aggressive, unrelenting” spread of the coronavirus across the country “without evidence of improvement but rather, further deterioration,” a senior administration official said Tuesday. The official, who spoke on condition of anonymity to discuss private deliberations, said the task force concluded existing efforts to slow the spread “are inadequate and must be increased to flatten the curve” and that Thanksgiving travel and gatherings could “amplify transmission considerably.”
On Tuesday, Senate Majority Leader Mitch McConnell said, “The next few days will tell us a lot about whether Congress can pull off the bipartisan, bicameral appropriations process that I believe both sides would like to deliver.”
Top government officials are hoping to secure overall funding totals for a massive 12-bill spending package, which would prevent a government shutdown Dec. 11, by the end of the week.
“Our colleagues on the committee and their counterparts in the House need to continue their bicameral discussions and settle on top-line dollar amounts for each separate bill,” McConnell said Tuesday on the Senate floor. “I hope they will be able to reach this broad agreement by the end of this very week.”
The relief bill was passed by the Democratic-controlled House earlier this year. It would provide $3 trillion in relief for state and local governments, direct cash payments to individuals, assistance for renters and more. It was not taken up in the Republican-controlled Senate. Negotiations on a relief package between Congress and the White House stalled before the election.