The expiration of the $600 in extra unemployment benefits at the end of July is leaving lawmakers at odds over how much and how long to extend them.
The $2.2 trillion CARES Act that Congress passed in March provided an additional $600 in weekly benefits, on top of state unemployment benefits, and helped prop up the economy. The provision for Pandemic Unemployment Assistance, and one that offered a moratorium on evictions from federally backed housing, also expired last week, putting at least 12 million renters under threat of eviction and adding hardship to the more than 30 million Americans who are unemployed.
The HEROES Act passed by the House in May would extend supplemental unemployment benefits through Jan. 31, 2021, among other provisions in the far-ranging $3 trillion stimulus package. However, Senate Majority Leader Mitch McConnell, R-Kentucky, and the Trump administration pronounced the bill dead on arrival and never took it up for debate. Last week, Senate Republicans and the Trump administration agreed on their own $1 trillion stimulus package, known as the HEALS Act. It would scale back the supplemental benefits to $200 per week through September. They also proposed to extend the $600 supplemental benefits for another week while negotiating with Democrats, but House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., rejected the short-term fix. '
Negotiations are continuing this week on Capitol Hill. One possibility floated by Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows, who are negotiating with Pelosi and Schumer, is limiting the benefits to 70 percent of what a worker earned before becoming unemployed in order to encourage workers to return to their jobs once they become available.
Meanwhile, millions of unemployed people around the country are worried about how they will pay their bills now that they have to rely only on what their state unemployment agencies are providing, if they are paying anything at all. State unemployment agencies have been overwhelmed since this spring with the surge in unemployment claims. Many of the offices have antiquated technology and limited staffing, frustrating those who have unsuccessfully tried to file their claims or contact the offices to find out why their claims and benefits aren’t being paid.
Last Friday, a group of Senate Democrats hosted several unemployed workers during a conference call with reporters where they described the difficulties they are facing.
“What $600 per week means for me as an independent contractor out of business is roughly that I have my own health insurance, rent and groceries covered,” said Hannah Silver, a volunteer with the advocacy group Families Forward Oregon who started her own architectural design consulting firm last August. “That is it. Baseline health care, shelter and food for one person — the absolute basics of living. I am not going on vacation, pocketing into savings, or online shopping. I am a single person, fairly healthy, but still incur other costs, should I need to see a doctor, take my pets to the veterinarian, assist friends or family, etc. This $600 per week is a lifeline for those of us whose dreams to run a small business or be our own bosses are taking hard pivots right now in order to survive.”
She said she has been calling the unemployment office for hours every day before she finally started receiving benefits recently. “How on Earth can we be getting back to work when we’re spending all of our time just trying to get through to the unemployment office?” she asked. Now that she has finally started getting some money coming in so she could transition her firm to an online environment, the benefits are being cut off.
Katie Krupp, a medical educator from Ohio who lost her job amid state budget cuts, has seen the extra $600 in unemployment benefits as a lifeline. “The UI benefits have allowed me to stay current with my bills and stay financially stable,” she said. “Without them, I would not be able to keep my home and important possessions. This proposal will hurt real people who are struggling, and I’m sharing my story to draw attention to this issue and the urgent need to extend this critical assistance.”
She has had difficulty changing fields by applying for jobs in areas like customer service because of lack of experience, and the restaurant and retail industries pose their own challenges. “The other types of jobs I see available are in stores or restaurants, and I don’t feel safe working in those areas because I am at high risk of developing severe complications if I were to contract the virus,” she said. “The extra $600 has helped me pay my bills, including my mortgage and stay financially stable. Without it, I fear I will lose my home along with many other possessions. ... I am asking them for the extra $600 to be extended until the health crisis is over and it is safe for us to return to work.”
One problem that many of the unemployed will be facing is that unemployment benefits are taxable. Unless the state is withholding taxes from the assistance payments, which often doesn’t happen, those who are unemployed this year will be facing heavy tax bills next year. By then, they may be employed again and perhaps in a better position to pay off this year’s mounting bills, although the challenges will still be substantial in recovering from their losses during the pandemic.
Molly Lynch of Henderson, Nevada, a member of the advocacy group MomsRising, has found the supplemental unemployment benefits to be a big help for her family during the pandemic after she and her partner lost their jobs. She needed to care for her young daughter and her mother, who has chronic lung disease. She and her partner waited for months to receive any benefits. He began receiving benefits in June, but so far she has not. Their bank accounts had been closed and they struggled to pay for food while their landlord threatened them with eviction despite the eviction moratorium. Their stove stopped working and she has a baby on the way.
“In June, our application was processed and we started receiving benefits,” she said. “The $600 per week boost has been a huge relief — a lifeline for my small, growing family. The unemployment boost allowed us to meet our basic needs and even catch up on a few bills. As we think about that last $600 check, we’re faced with impossible decisions. Should we try to catch up on our electric bill, which we’re $900 behind on? Should we stock up on food? What about diapers? It’s so hard planning for a baby who will be here in just three months while we try to hang on financially and protect our health.”
Sharmah Wardlaw of Atlanta, who is also a member of MomsRising, has seen her life upended since the pandemic started. “Before the pandemic, I had a really great, stable life with my daughter, who is in college,” she said. “I had worked as a concierge at a local convention center for 16 years. Then, the pandemic came. Since then, our lives have become way more difficult.”
She has limited mobility, and her daughter’s school closed, forcing her to educate her daughter from home. They don’t have a car and were relying on public transportation. However, that has changed since the pandemic, and they have been forced to walk or rely on rideshares. The extra benefits have helped with rent and utilities. She was told by the convention center when it laid her off in March that she would probably be on layoff status through August and September, but then she received a follow-up letter recently saying she would be permanently laid off in September.
“I’m trying to figure out what I’m going to do the next few months,” she said. “Even though Congress put forth that extra money, I only received $500 of that money. Since hotels and the hospitality industry that I work in are not opening up anytime soon, and I don’t have any other skills, with my health and mobility issues, it’s going to be a little bit difficult. I don’t have any health insurance, so I have not been able to go to any of my doctor’s appointments these past four months. I feel OK, but I know that I have to figure something out.”
She is praying that Congress will extend the unemployment benefits. “Otherwise we don’t know what we’re going to do,” she said.
