The U.S. economy appears to be headed for an iceberg in just over a week, thanks in part to a dumb technicality that Congress accidentally overlooked while passing its coronavirus relief legislation in March.
In theory, the $600 per week federal unemployment benefits that have been a crucial lifeline to families throughout the crisis were supposed to expire on July 31. That was the date most journalists, Capitol Hill staffers, and lawmakers initially marked in their brains as the deadline for passing another round of pandemic aid so that people who are out of work don’t see a sudden, massive drop in their income.
But it turns out everybody circled the wrong day. The problem is that July 31 is a Friday, and states pay unemployment benefits based on weeks that end on a Saturday or Sunday. As a result, the last week of this month won’t actually be covered by the $600 top off. The extra cash will disappear after July 26 in every single state.
Outlets like USA Today and CBS have been reporting this point since at least late June, but it has failed to spur quicker action on Capitol Hill. Making matters worse, once Congress does finally act to renew the payments, it will likely take states at least a couple of weeks to reprogram their ancient computer systems to deliver whatever new benefit Congress settles on, as Michele Evermore, the lead expert on unemployment insurance at the National Employment Law Project, has explained. If negotiations push past Aug. 1, it is possible that some families could go a month without federal help.
I asked Evermore if there was any way for states to fix this issue on their own, perhaps by moving their benefit weeks back by a day, which in my head sounded like a sort of common-sense solution. She said it would be essentially impossible, both for legal and technical reasons. “The benefit-week issue is one of the harder things to fix,” she said. “In most states, it’s in statute, and even where it is not, that kind of core program change is a nightmare.”
While this issue appears to have been the product of a congressional flub, the Department of Labor actually spelled it out very clearly in a document issued way back on April 4. Somehow, it slipped through the cracks.
Despite the overall success Washington has had getting aid to the jobless through this crisis, many Americans still appear to be suffering. More people are reporting trouble getting enough to eat. Households have been skipping loan payments, and many are worried that the U.S. may be on the verge of a housing crisis this summer as eviction moratoria are lifted. Cutting people off from aid will only make those problems worse, while pushing the wider economy into a deeper hole. There were about 32 million individuals on the unemployment rolls, according to the government’s most recent count. If the $600 boost disappears completely, they will still receive normal state benefits. But on average, their incomes could be cut by more than half.
Not that Republicans seem to care. Much of the party is still seemingly convinced that the $600 unemployment boost is preventing people from going back to work—a claim for which there is absolutely no evidence, and that is becoming ever more preposterous as states shut businesses like bars back down to deal with the resurgent coronavirus outbreaks. And while the White House has signaled that it would be willing to compromise on the issue by extending benefits at a lower rate—perhaps somewhere between $200 and $400 a week—there are still no real negotiations between the two parties in Congress. Instead, Senate Majority Leader Mitch McConnell has said he is planning to present a plan to his Republican colleagues next Monday, and only afterward share it with Democrats. (A source with Senate Democrats confirmed they’ve still received “zero outreach” from McConnell.) By the time the two sides can agree to something, there’s a good chance that these crucial benefits will have lapsed for at least a while. “Senator McConnell’s months-long refusal to engage in bipartisan talks on the next phase of federal relief legislation has created needless uncertainty and pain for millions of families who are still reeling from the public health and economic crises,” Minority Leader Chuck Schumer said in a statement.
So that’s where we are. The economy is en route to its date with the abyss. And all Democrats can do at the moment is beg the GOP to veer away.
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