Key Federal Help Sunsets As Congress Debates New Coronavirus Aid Package | KERA News

Key Federal Help Sunsets As Congress Debates New Coronavirus Aid Package

Jul 29, 2020

As COVID-19 began wrecking the American economy this spring, Congress rushed to authorize trillions of dollars in aid to cushion the economic impact. Now, some of the key protections meant to keep Americans from financial calamity are expiring. 

Last week, a partial federal eviction freeze meant to help keep renters in their homes expired. Also, a federal $600 per week boost to unemployment checks expires on Friday, although unemployed Texans saw the last of that money last week because of the way Texas delivers its benefits. 

That’s as unemployment continues to be higher than it’s been in decades. In Texas, the unemployment rate in June was more than double the February unemployment rate. Nearly 1.5 million Texans received unemployment checks the week of July 11, the most recent date for which data is available, and hundreds of thousands of Texans applied for unemployment benefits over the last month. 

Initial studies show these and other benefits have helped a lot of people navigate the massive economic hit tied to the pandemic, though the measures have excluded or been less effective in protecting some vulnerable populations like people who are undocumented

Nonetheless, researchers say  poverty rates have remained relatively stable due to the combination of cash payouts, expanded unemployment benefits, protections from evictions and foreclosures, help for small businesses and other elements in the massive bills that Congress passed.

But some of those protections are ending, and the coronavirus isn’t going away.

This week, Senate Republicans rolled out their plan for the next round of federal coronavirus relief. It’s a $1 trillion package, significantly smaller than the $3 trillion proposal that House Democrats have already passed, which leaves a lot of ground for lawmakers to cover if they are going to find a compromise as Americans continue to struggle with the pandemic’s economic toll.

One key area of disagreement: How much the federal government should boost unemployment insurance. 

Starting in May, the CARES Act started giving unemployed workers an extra $600 dollars a week on top of the money that state unemployment programs give to people, which typically replace only about half of a worker’s pay before they lost wages. Now, that’s ending, leaving millions of unemployed people with a lot less cash coming in.

Republicans have argued that it was too generous, because it left some workers making more money while unemployed than when they were employed. 

“This is one area where we found that we did make a mistake, because we actually added a $600-a-week benefit from the federal government,” said Texas Senator John Cornyn. “And some people, we found out, in some wage brackets, were actually making more money not to work than to work.”

Though there hasn’t been much research to support that claim, the GOP package would authorize a significantly smaller unemployment boost going forward. It also leaves out ane extension of eviction protections for renters.

Democrats say low-wage workers aren’t choosing not to work, but that there just aren’t as many jobs. Their proposal re-authorizes the full $600 per week unemployment boost as well as other CARES Act provisions like the eviction moratorium. It also expands safety net measures by including assistance for people struggling to pay student loans, hazard pay for essential workers, and funding for state and local governments. Plus, would authorize rental assistance, which could help not just tenants but also landlords. 

“Rental assistance is key, because during a pandemic the last thing you want to do have people have to face issues like homelessness or really be mobile and have to move because all of those things can increase your risk of exposure,” said Congressman Marc Veasey from Fort Worth.

The dueling proposals are essentially opening bids in a negotiation between Republicans and Democrats, so it’s unclear what’ll make it into the final aid package to help out a struggling nation.

Got at tip? Christopher Connelly is KERA's One Crisis Away Reporter, exploring life on the financial edge. Email Christopher at cconnelly@kera.org.You can follow Christopher on Twitter @hithisischris.

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