Millions Will Lose Unemployment Aid This December Unless Congress Acts Fast

Nearly 12 million workers will lose federal unemployment benefits on Dec. 26 if lawmakers fail to reach a reauthorization deal.

At the outset of the coronavirus pandemic in March, Congress sprang into action with new unemployment programs and boosted benefits an unprecedented $600 per week. But lawmakers thought the pandemic would be under control in a matter of months, and the extra money lapsed in July.

Now, even as COVID-19 infections spread wildly, all the other enhanced unemployment programs are set to end. The looming expiration is part of an epic year-end abyss, with an eviction moratorium, student debt forbearance and a host of tax breaks all disappearing down the hole at the same time.

According to an estimate from The Century Foundation, a progressive think tank that has closely tracked unemployment claims this year, more than 7 million workers stand to lose the Pandemic Unemployment Assistance benefits Congress created for Uber drivers and other gig workers without traditional payrolls who normally don’t qualify for such aid.

Another 4.6 million workers will lose Pandemic Emergency Unemployment Compensation, which was created to help the long-term unemployed who had already exhausted the 26 weeks of regular benefits most states provide. While 18 states have extended benefit programs that could cover nearly 3 million of those workers, come Dec. 26 those programs will lose federal funding and put further strain on state budgets.

“Without unemployment benefits and with savings badly depleted, families will be at high risk for food insecurity and loss of their homes, and many may be unable to pay for health care during some of the darkest days of the pandemic,” The Century Foundation’s Andrew Stettner and Elizabeth Pancotti wrote in their analysis. “The nation’s entire economy will suffer.”

For months, House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steve Mnuchin tried to negotiate a coronavirus relief deal that would include an extension of unemployment benefits, another round of direct payments to households, and assistance for the financially-strapped state and local governments. Those negotiations collapsed shortly before the Nov. 3 election, and now it’s not clear if anyone in Washington is even trying to reach an agreement.

President-elect Joe Biden said Monday that Congress ought to pass a comprehensive bill like the $2 trillion measure Democrats pushed through the House in October. But Senate Majority Leader Mitch McConnell (R-Ky.) has called that bill a nonstarter.

With Senate Republicans opposed to a large spending bill, McConnell has stayed out of the negotiations, instead offering up votes on a series of individual proposals, such as a $500 billion measure that would give the unemployed an extra $300 per week. Democrats say McConnell’s piecemeal approach is inadequate to the massive needs in the country.

“Cases and hospitalizations are skyrocketing, which will cause the economy to further decline over the next few months,” Sen. Ron Wyden (D-Ore.) said in a statement. “In the face of mass death and economic devastation, Mitch McConnell is doing nothing to provide relief to American families.”

On Tuesday, Pelosi demanded McConnell negotiate. “For the sake of the country, we ask that you come to the table and work with us to produce an agreement that meets America’s needs in this critical time,” the speaker said in a letter.

Congress has a rich tradition of waiting until the last minute before Christmas to reauthorize extended unemployment benefits, having done so repeatedly in the aftermath of the Great Recession. In 2013, Congress finally let the benefits expire ― stranding 1.3 million workers.

Thanks to unrelenting waves of layoffs this year, plus the expanded eligibility criteria, vastly more workers would be left hanging if Congress drops benefits in December. Some of the 7 million receiving gig worker benefits may be able to resume working right away, since they weren’t laid off from a formal job. But with the weather turning cold, coronavirus cases skyrocketing and states imposing new restrictions on commerce, it will probably be harder to make money than it was over the summer.

Lawmakers could address the expiring provisions of the Coronavirus Aid, Relief, and Economic Security Act it passed in March (known as the CARES measure), as well as potentially other relief measures, in a funding bill that Congress needs to pass by Dec. 11 in order to avoid a partial shutdown of the federal government. The idea of tying coronavirus stimulus to annual appropriations bills has support among rank-and-file members on both sides of the aisle. But it again would require a deal among top congressional leaders that has proved elusive so far.

“I thought it might be a good idea if the leadership would follow ― if we could reach an agreement ... and wrap it all in one, you create critical mass. We’re not there yet,” Senate Appropriations Chairman Richard Shelby (R-Ala.) cautioned in an interview on Tuesday.

Sen. Chris Van Hollen (D-Md.), another appropriator, agreed. If the benefits included in the CARES Act are allowed to expire, he said, “That would be a very bad day for the country.”

The bill would still need to be signed by President Donald Trump to become law even if Congress can somehow get it to his desk. The lame-duck president has been completely consumed with baseless election conspiracies following his loss in the 2020 race. He’s hardly been seen in public since the election and has held few official events.

“He said he wanted to go big (with a relief bill) after the election,” Van Hollen said of Trump. “Obviously, that’s a total wildcard at this point.”