Congressional negotiators expect the lapsed $600 a week federal unemployment benefits to be retroactively paid from July 31 onward after lawmakers find agreement on extending them.
As Democrats and Republicans duke it out over the size of the unemployment benefits in the coming months, the program is expected to expire temporarily, until approximately the end of August for most jobless individuals. The length of the lapse in benefits will vary depending on when Congress passes the next relief package and each state’s ability to adjust to the expected changes made to the benefits program.
Multiple congressional aides told the Washington Examiner that they expect the unemployment benefits to lapse until approximately two weeks after the next coronavirus relief package is passed. The aid will likely be retroactively applied for all benefits owed from the end of July, the aides said. The benefits were similarly retroactively distributed when the program was first created by the $2.3 trillion CARES Act relief package passed in March.
The jobless benefits expiring means the weekly income of over 25 million unemployed workers will be reduced by more than two-thirds in many states over the coming weeks.
This lack of benefits could leave many workers scrambling to find the money to pay their bills while Congress continues to negotiate a deal.
”People on unemployment are really concerned, they’re pissed off, and they can’t believe this is happening,” said Kelly Ross, policy director at the AFL-CIO, the largest federation of unions in the United States.
“People are going to suffer, that’s the reality, they’re going to have difficulty paying their mortgage, rent, utilities and other expenses. This delay will also lead to more people losing their jobs and housing in the middle of a pandemic,” said Ross.
Some economists said that although the benefits expiring will be a strain on many, most people are saving much more now than they were before the pandemic, and thus, incomes have risen. The higher savings, along with the existing state unemployment benefits, will give many who are unemployed or partially employed a financial cushion in the coming weeks, said Marc Goldwein, the senior policy director for the Committee for a Responsible Federal Budget, a group that advocates for deficit reduction.
“If people know the benefits will be coming retroactively, they can plan for that by negotiating rent with their landlord, delay doctors appointments, and use credit cards for payments,” said Goldwein.
Goldwein added that those unemployed will be able to hold out on their savings and state unemployment benefits at least for a few weeks, but if the federal benefits don’t return after that, it will become a struggle for most.
There is significant disagreement on how to help those without jobs in the coming months.
The AFL-CIO and other liberal organizations support the $3 trillion Heroes Act that House Democrats approved in May, which would guarantee the $600-a-week benefits into next year. Senate Majority Leader Mitch McConnell has dismissed the bill.
The GOP’s coronavirus relief bill, released earlier this week, the HEALS Act, provides for lowering the unemployment benefits to approximately $200 per week. Republicans argue that the $600 amount is too generous and raises people’s incomes significantly above the median salary.
It is true that a majority would receive more money from the benefits, if they’re extended as is at $600 a week, than from work, according to the Congressional Budget Office. But economists generally say that the bigger problem for hiring is that firms aren’t interested, rather than workers holding out over wages, according to a University of Chicago survey.
