Congress responded to the spreading COVID-19 pandemic in March with astonishing speed (by congressional standards), enacting three bipartisan-backed measures in quick succession to increase coronavirus testing, extend sick leave to more workers and, most dramatically, inject more than $2 trillion into the collapsing U.S. economy.
Senate Majority Leader Mitch McConnell, R-Ky., has shown no such urgency since then. And now, one of the most important elements of the third measure, the Coronavirus Aid, Relief and Economic Security Act, is about to expire, slashing benefits to millions of laid-off Americans even though unemployment is worse now than in the depths of the Great Recession. The CARES Act increased unemployment benefits by $600 a week, but that support is set to end this week.
Lawmakers are reportedly considering a temporary extension of the benefits to give them more time to work out a deal on a new relief package, something they should already have negotiated. They are so far apart that McConnell laughed Tuesday when asked whether Congress could pass a bill by the end of the month.
Of course, the situation is the furthest thing from funny. The list of needs that Congress has to address is long, starting with a persistent shortage of COVID-19 tests. The most immediate concern, though, is the looming drop in unemployment benefits. It arguably made sense in March to limit the duration of the $600 add-on; what we’ve seen, however, is a stubbornly resilient pandemic that surged after the stay-home orders were lifted. In mid-July, more than a million people were still filing new unemployment claims weekly and more than 17 million Americans were still without jobs.
Nevertheless, some Republican lawmakers are resisting renewing the $600 in additional benefits, favoring some combination of a smaller add-on, a tax credit for employers or a bonus for people who return to work. Their concern, buttressed by anecdotes from employers, is that the more generous benefits are deterring people from coming off the dole. Ordinarily, states’ unemployment insurance programs cover only 30% to 50% of a person’s lost wages. With the extra $600 per week, however, more than two-thirds of laid-off workers received as much as or more than they’d made on the job. (Full disclosure: Many unionized Los Angeles Times journalists who were furloughed during the pandemic have been receiving the increased unemployment benefits.)
That concern might make sense on the surface, but it ignores reality. For starters, states typically bar people from collecting unemployment when they have a viable job offer. But as a number of states have acknowledged, returning to a job that increases the risk of contracting COVID-19 isn’t a viable option for many Americans.
More important, the economy is still severely hobbled — not just by the restrictions that states and cities have put in place, but also the widespread fear of dying from a disease that has no proven treatments or vaccine. Millions of people are unemployed because there aren’t enough jobs, not because the benefits are keeping them too comfortable.
Besides, unemployment benefits don’t come with many of the things that a job can provide, including a degree of financial security, health insurance and retirement benefits.
The extra $600 a week has prevented greater suffering and economic harm. Among other things, it has helped avert the large-scale upheaval in the housing market that many analysts expected. As of July 20, 91% of tenants had paid part or all of their monthly rent, according to the National Multifamily Housing Council, which tracks larger apartment buildings. That’s only a 2% increase in missed rental payments compared with last July, when the economy was humming and the pandemic hadn’t started.
It’s hard to imagine that sort of stability continuing if the extra $600 evaporates. Nearly half of tenant households were paying more than a third of their income on rent before the pandemic. As the economic fallout continues, too few households have the financial cushion to keep paying the rent without a full paycheck or significant government assistance.
And that’s just rent. For those who qualified and received unemployment checks, the extra money helped people buy groceries, pay their utilities and continue to spend on other essentials, like prescriptions and transportation. In other words, the federal dollars rippled through the economy, helping many more people than just the unemployed and their families.
The most important task facing this country is to beat the virus. In the meantime, Congress needs to do what it can to reduce hardship and keep economic activity going. The extra benefits are a tonic not just for families in financial duress, but for the economy as a whole. Lawmakers should keep them in place until the pandemic is under control once and for all.