Lawmakers continue to negotiate over what federal unemployment policy will look like, and what they decide will determine the level of financial suffering for millions of Americans this winter.
The simplest question is whether to extend the current federal benefit programs for the long-term jobless and gig workers, who aren’t usually covered by state unemployment systems. If those programs are allowed to expire at the end of December, nearly 12 million beneficiaries will lose that income.
The second question is whether to give the unemployed extra money. In March, Congress added $600 per week for both state and federal benefits recipients. But that lapsed at the end of July, and politicians are deciding what, if any, extra money to provide going forward.
A bipartisan compromise proposal that’s gained momentum in Congress this week would preserve the federal benefits for the long-term jobless and gig workers for four more months while reviving the former supplement, though at $300 instead of $600. These benefits are part of a broader package that includes small business aid, money for state governments and a clampdown on coronavirus lawsuits.
House Speaker Nancy Pelosi (D-Calif.) suggested Friday that the package could be tacked onto a broader funding bill that Congress has to pass by Dec. 11 to prevent a partial government shutdown.
The senators and representatives who worked on the benefits deal over Thanksgiving have not introduced it as legislation or even summarized it in any detail. They simply announced Tuesday that they had agreed on overall numbers for categories of relief, with the unemployment provisions coming in at $180 billion.
Sen. Joe Manchin (D-W.Va.) said that figure accounts for 18 weeks of the federal unemployment programs plus the extra $300. “That includes gig workers and people that basically we covered under the first CARES Act,” Manchin said.
The Congressional Budget Office has not scored the proposal, but Marc Goldwein, an expert with the nonprofit Committee for a Responsible Federal Budget, said that number sounded “about right.”
Still, there are trickier questions that Congress may wish to address. In the past, when the legislature has reauthorized a federal unemployment benefit that it previously allowed to lapse, beneficiaries received lump-sum payments accounting for the missed weeks. Manchin said this proposal would be retroactive only to the first of December.
And the proposal apparently leaves out more support for people who have been unemployed so long that they will soon or have already run out of the standard six months of state benefits plus the three months of extra federal benefits. In response to the last economic crisis ― the Great Recession of 2007-2009 ― the combination of state benefits and ad-hoc federal extensions added up to nearly two years of aid.
The number of workers currently unemployed for at least six months ― the threshold for being considered “long-term unemployed” ― has risen sharply to 3.9 million, or 36.9% of the unemployed population, the Labor Department reported on Friday. Many of these workers are people whose past jobs either can’t or shouldn’t exist with a highly contagious and deadly virus going around.
Senate Democrats are pushing for extra weeks and have said that, instead of having an arbitrary deadline, federal benefits should remain in place so long as the unemployment rate exceeds 5.5%. It’s currently 6.7% and has been falling, though job growth has slowed and the rate could rise again in the coming months.
“Around 4.4 million workers will have already run out of benefits by the end of the year, regardless of their surrounding economic situation, and millions more will exhaust them next year if Congress does not add additional weeks of eligibility” to federal programs, a group of Senate Democrats led by Ron Wyden (D-Ore.) said in a letter to Senate leadership this week.
“Many workers need additional weeks of eligibility in these programs because demand for their services or industry has cratered during the pandemic,” the letter said.
Many unemployed workers are closely following the developments on Capitol Hill.
Wendy Dean of Naples, Florida, receives $494 every two weeks from one of the federal programs that’s expiring this month.
Dean lost her job as a dental assistant in March and she can’t take a new job if it’s not safe. She has lupus and rheumatoid arthritis, meaning she’s at high risk for severe illness if she catches COVID-19.
The 48-year-old has obsessively followed news of another possible relief deal as she searches for a new place to live with her teenage daughters, since their landlord wants them out. For months, lawmakers have said a deal is within easy reach if only the other side would drop its foolish demands. Dean has given up hope of receiving significant back benefits, but an extra $300 per week would help a lot ― if it happens.
“It’s like teasing your kid you’re going to take them to Disney World,” she said.
Dean noted that she and her daughters used to have annual passes to Disney World. Not anymore. She said she accidentally dropped an egg carton last week and broke down in tears.
“I got really upset over $2.50,” she said. “I have this black cloud over me.”