CORONAVIRUS

Evictions Loom, Economy Teeters As Congress Struggles To Reach Relief Deal

Negotiations over another economic stimulus package are inching forward but lawmakers still remain far apart on many issues, including jobless benefits.

Tiffany Allen of Knoxville, Tennessee, said she had never missed rent before she lost her job in March. Last month she got a note from her landlord saying she owed nearly $3,000 and that she’d better vacate the apartment within 30 days.  

“When you have no control over any aspect of your life, it is horrifying,” Allen said in an interview. 

Her unemployment benefit, which had amounted to $648 per week after taxes, has shrunk to just $108 per week thanks to last week’s expiration of a $600 federal supplement that Congress created in March. 

Congressional negotiations over another economic stimulus package are inching forward, but lawmakers still remain far apart on numerous issues, including unemployment benefits, aid to states and localities, education funding, liability protections and food assistance.

Democrats on Wednesday seemed more pessimistic than usual about the status of talks, which have occurred daily on Capitol Hill for nearly two weeks. They’ve reported offering concessions and said they would keep trying to reach a deal.

“There is light at the end of the tunnel, but how long that tunnel is remains to be seen,” House Speaker Nancy Pelosi (D-Calif.) told reporters after a two-hour session on Wednesday.

Congressional leaders are sounding more pessimistic about reaching a deal on another round of coronavirus relief. (Photo by A
Congressional leaders are sounding more pessimistic about reaching a deal on another round of coronavirus relief. (Photo by Alex Wong/Getty Images)

Top White House officials who are negotiating with congressional Democrats on behalf of President Donald Trump might be even more gloomy about chances of reaching an agreement anytime soon. They said they’ve offered even bigger concessions than their counterparts.

“I’ve become extremely doubtful that we’ll be able to make a deal if it goes well beyond Friday,” White House chief of staff Mark Meadows, a former conservative congressman, told reporters on Wednesday. “Just because we’ve been spending so much time together that if you’re not making progress, there’s no sense to continue.”

House Democrats passed a $3 trillion relief bill earlier this year that Republicans consider a non-starter. GOP leadership proposed a more narrow $1 trillion package, but they have struggled to get most of their members on board. 

Both sides still don’t agree on how and at what level to extend the added $600 federal unemployment benefits Congress created in March in response to the coronavirus outbreak. The benefits expired last month. Democrats would like to renew them at the same level until the end of the year; Republicans do not. Some want to reduce the weekly benefits, while others prefer letting them lapse permanently, claiming that they disincentivize people from working. 

“If you’re looking for a total consensus among Republican senators, you’re not going to find it,” Senate Majority Leader Mitch McConnell (R-Ky.) said Tuesday at a weekly press conference when asked about unemployment benefits.

Several Republicans have offered proposals that would extend jobless benefits but also gradually reduce them across the span of several months. It’s unclear how much support they have in the GOP conference, but they at least move the ball closer to Democrats’ demands for more generous federal assistance to those struggling without jobs or ability to pay rent.

Republican Sens. Mitt Romney of Utah, Susan Collins of Maine, and Martha McSally of Arizona introduced an amendment on Wednesday that would extend added federal benefits up to $500 per week in August followed by $400 per week in September. From October until December, states would provide jobless benefits at 80% of a worker’s previous wages (or a flat $300 per week if states aren’t able to implement such a formula in time).

Democrats generally oppose requiring states to implement complicated wage formulas because they lack the resources to do so quickly. That’s why they want to just extend the $600 payments.

Sen. Lindsey Graham (R-S.C.) also floated a proposal on Tuesday that would extend federal unemployment benefits at $500 per week during both August and September. In October, added federal benefits would be capped at 100% of one’s previous wages.

But the Senate has yet to vote on either proposal, and it’s unclear if it ever will due to tepid support among Republicans. Both sides are awaiting the results of negotiations that almost certainly will drag into next week, forcing lawmakers to cancel part of their annual August recess.

The lapse of the federal supplement for more than 25 million unemployed Americans will rattle the economy, which is already vulnerable. Nearly a third of furloughed workers recalled to their jobs since March have been laid off again, according to a recent survey. The disappearance of the extra $600 represents a sizable hit to consumer spending, which makes up 70% of the economy. A major payroll processing firm said its data suggest hiring has already slowed dramatically, after a promising start to the pandemic recovery in May and June.

Trump, meanwhile, has threatened to sign executive orders seeking to extend unemployment insurance benefits and the moratorium on evictions on his own. It’s not clear how those would be legal.

Tiffany Allen, for her part, does not live in the kind of federally subsidized property to which the lapsed eviction moratorium had applied, though as many as 19 million households do.  

Allen said that until March she worked for a hotel chain as a traveling quality assurance analyst, a job that paid her as an independent contractor. Independent contractors are not normally eligible for unemployment insurance, but when it added the $600 enhancement Congress also created a special pandemic unemployment assistance program to make sure more workers get paid. 

It took states a few weeks to get the special benefits up and running, and Allen fell behind on rent while waiting for her first payment, which landed in late April. Both regular benefits and the pandemic assistance came with the extra $600. 

Now that the supplement is gone, Allen is left with Tennessee’s minimum pandemic benefit ― $120 per week before taxes. Allen, 44, said she takes care of an adult daughter who has disabilities. Since her layoff, she said she’s applied for retail jobs and been told she’s overqualified. 

“I never needed government assistance until the entire world shut down,” she said in an email. “I have been able to support my family with my employment, but as of now, I’m looking at being homeless with a disabled dependent.”