More than 7.5 million Americans will lose their federal unemployment payments over the weekend, despite signs the economic recovery is slowing and long-term unemployment is persistent.
In the American Rescue Plan passed in March, the last of the massive coronavirus relief bills, Congress extended enhanced benefits for unemployed workers until September 6. The program had been put in place early in the pandemic, as wide-reaching social lockdowns aimed at stopping spread of the virus similarly shut down the economy, making millions unemployed overnight.
Other programs followed, including a moratorium on evictions and foreclosures, additional funding for medical institutions, and even stimulus checks mailed to all Americans. However, after the mass vaccination program began in the spring of 2021, cases declined to historic lows and the economy began to grow again, the federal government, as well as many state and local governments decided to begin allowing those social programs to expire, some
several months in advance
Unfortunately, a new wave of COVID-19 broke out, driven by the Delta variant of the virus, and the economy has not returned to the pre-pandemic “normal” as experts expected. Despite some second-guessing by administration officials, the course has largely remained as it was laid out in the spring.
“But we have work to do to beat back the Delta variant and build an inclusive economy,” Labor Secretary Marty Walsh said in a
. “Rising infection rates in some states hit the food and retail sectors hard, where workers of color and women are disproportionately represented.
AP Photo / Elaine Thompson
the Washington Post
, which cited sources in the administration, a wide swath of the federal government have raised alarm about the danger posed by allowing the unemployment program to expire, including the White House National Economic Council, the White House Council of Economic Advisers, the Office of Management and Budget, and the US Department of Labor.
Despite their fears, they said US President Joe Biden personally believes it is “appropriate” for the emergency programs to end. However, he has
appealed to states
with high unemployment rates to continue to use available federal funds to pay out boosted unemployment checks.
“I think he made a decision based on where things stand and our economic recovery at this point in time,” White House spokesperson Jen
Psaki told reporters
on Monday. She added that other programs, like the Child Tax Credit, were still available to Americans.
A senior congressional Democratic aide told the Post that “at the White House staff level, there’s a ton of support for focusing on at least trying to extend additional weeks for gig-workers and self-employed workers. But they’re not trying.”
The fretful agencies’ fears were reinforced on Friday by a
new jobs report
by the Bureau of Labor Statistics showing the US economy only added 235,000 jobs last month, or less than one-quarter the growth has seen the month prior. Further, the report notes that the number of long-term unemployed – or people who haven’t had a job for six months or more – declined by 246,000 but remains at 3.2 million, a historic high.
While the unemployment rate itself has declined to 5.2%, or 8.4 million overall, the workforce itself is smaller than before, and there are 5.7 million people not considered a part of it because they’ve been unemployed for too long, but are nonetheless looking for a job, the report also notes. Further, of those unemployed, 5.6 million said they were unable to work because of Covid-related business closures.
The danger to unemployed workers is more severe now than it was in prior months because the Supreme Court shut down the nationwide eviction moratorium put in place by the US Centers for Disease Control and Prevention (CDC) as a way to stop the unnecessary spread of the virus. The high court ruled last week that the CDC had overstepped its legal bounds, and on Thursday, the Biden administration formally
dropped its opposition
to the decision.
AP Photo / John Minchillo
allowing forbearance on mortgages expired on July 31 without renewal, although the Consumer Finance Protection Bureau has given homeowners behind on their payments
to avoid or mitigate a default.
that 6.7 million American renters are behind on their rent, and without the ban in place, between 750,000 and 1.3 million of them will be kicked out of their homes before the year is out. In addition, 1.75 million homeowners are behind on their mortgage payments.
However, a moratorium on student loan payments that was set to expire in September was
given extra life
last month when the Department of Education extended it until January 31, 2022.
“If all of these people are going to lose their benefits and nobody is going to put up a fight for it, at the very least the administration needs to turn to the cause of unemployment insurance reform and making the program work as it should,” Judy Conti, director of government affairs at the National Employment Law Project told the Post.
“This is the biggest benefits cliff in American history,” she added.