About 12 million unemployed workers were on the verge of losing their unemployment benefit on December 26, due to the expiration of two pandemic-crisis programs. But there was a bailout on Monday when Congress approved a $ 900 billion stimulus package that would extend those programs, in addition to adding $ 300 in extra weekly jobless pay.
Now the timeline for this lifeline is up in the air for several reasons, including that of President Donald Trump last minute demand for changes to the invoice.
Although on Tuesday evening Trump issued complaints on various issues in the bill, his most timely complaints were directed toward the $ 600 direct incentive payments which he described as “ridiculously low.” Trump also commented on one tax credit for business meals, which said it should be extended for more than the two years stipulated by law.
However, Mr. Trump did not address the issue of unemployment benefits. The stimulus bill would extend two major pandemic programs for 11 weeks, in addition to recharging regular state benefits with an extra $ 300 in weekly unemployment benefits. While the new round of aid will certainly provide a welcome relief, it is only half of the extra $ 600 in aid received by unemployed workers at the start of the pandemic and due in July. At the same time, the number of people applying for unemployment benefits it remains at a high level, showing that coronavirus continues to affect the economy.
“Many workers are worried because they have entered the hole during their unemployment; they have accumulated debts,” said Andrew Stettner, a left-leaning unemployment expert at the Century Foundation. “Some of the research shows that the average unemployment rate has a negative net worth.”
The extra $ 300 a week, as well as extra weeks of unemployment, will probably not be enough for many unemployed workers to get out of debt, Stettner added, but it would probably help many meet their basic needs, at least until programs in mid-March.
Kenneth Elliott, a 50-year-old hail driver in West Palm Beach, Florida, has been out of work since March. Between April and July, he was able to earn the additional $ 600 a week to cover his expenses. But since August, he has been living on just $ 275 a week in state unemployment benefits, “something you can’t survive,” he told MoneyWatch recently.
Several months ago, Elliott gave up his own apartment and moved in with a friend to try to save on housing costs, he told CBS MoneyWatch. But the $ 275 still doesn’t cover all of his expenses, which include medical insurance, car insurance and the phone bill, so he’s been lagging behind in rent.
“I’ve been lucky enough to have a very understanding landlord who tries to work with me, but I don’t know how far he will go,” Elliott said. “I’m going down the thread.”
A month of waiting?
Democrats are now trying to change the stimulus bill, after Mr. Trump’s instant, of facing stimulus checks at $ 2,000 per person, out of the $ 600 currently in the legislative text. This effort will delay the stimulus package, meaning unemployed Americans could wait longer to get an extra $ 300 in weekly unemployment benefits.
But even before Mr. Trump made his objections, it was likely that many states would have required up to three or four weeks to start paying the extra $ 300 in weekly benefits, Stettner said. These benefits would come from the Federal Pandemic Unemployment Compensation (FPUC) program, which was created by the coronavirus aid, aid and economic security (CARES) law in March, but expired in July. To get those $ 300 payments, states would first have to re-launch this program after a long gap.
Unemployment programs are managed independently by each state and unemployed workers seek help through their state labor departments. Depending on the efficiency of computer systems and the workforce of their state, unemployed workers may experience very different waiting times to receive benefits. Some states may be able to ship $ 300 FPUC benefits quickly, but others may see longer delays.
For example, eight out of ten unemployed workers in Wyoming receive their unemployment benefits within 14 days of being considered eligible for benefits, according to the Century Foundation. But only 2 out of 10 unemployed people in Kentucky receive their first payments within two weeks.
Gap in profits
The delay in the stimulus bill could also create a gap in current benefits paid to unemployed workers.
Approximately 12 million receive unemployment benefits through two programs that expire on December 26: the Pandemic Unemployment Assistance (PUA) program, which covers contract workers and the self-employed, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides weeks of assistance for those who have been left without the usual state unemployment benefits.
The stimulus bill passed by Congress on Monday aimed to prevent a cliff of benefits for unemployed workers, who are currently part of those programs, by extending those programs until March 14. Both programs currently pay regular state unemployment benefits, which average more than $ 300 a week.
“It’s very certain that now there will be a delay for people” participating in these programs that will expire soon, Stettner said. “At most, they will miss a week of profits.”
However, the benefits would be paid retroactively once Mr. Trump signs a bill. Unemployed workers should continue to apply for their benefits, even if there is a gap to make sure they receive pay, Stettner noted.
“It’s going to impact people, so it’s important that this happens,” Stettner added. “People will blame the states because that’s what they know, but that’s an out-of-place guilt. Congress lasted forever, and now the president is delaying it even further.”