Millions of Americans Will Soon Lose $600 a Week in Extra Unemployment Benefits — What Happens Now?
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Millions of Americans are about to lose their extra federal unemployment benefits.
In two weeks, jobless people in the United States will no longer be able to claim the additional $600 a week on top of what they get from their state, which averaged about $372 a week at the end of February.
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The funding, which is part of the $2.2 trillion Coronavirus Aid Response and Economic Security Act, or CARES Act, was introduced at the end of March as the pandemic took hold in the country. Its deadline comes at a precarious time for the U.S. economy, whose recovery is threatened by a recent spike in COVID-19 cases and subsequently stalled or reversed reopenings.
Lawmakers in Washington, D.C., have hit a standstill in discussions surrounding another relief package to protect American workers and businesses. While Democrats have sought an extension to the Federal Pandemic Unemployment Compensation program, Republicans and the Trump administration seek to impose a limit on the amount of money that jobless Americans can collect from the government. (Because some Americans take home more from the benefits than they did when they were employed, a number of critics have argued that the weekly payments have created a disincentive to return to work.)
If policymakers fail to enact an extension, the program will expire on July 31 as scheduled. In May, the House of Representatives passed the proposed $3 trillion Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act, as a followup to the CARES Act. It would authorize another round of direct payments for millions of U.S. households. The bill, however, faces a tough bout in the Senate.
On the other hand, the White House has expressed support for another stimulus measure to bolster the economy. The new round of payments would be less than the benefits provided in the CARES Act, which alloted $1,200 to eligible Americans, $2,400 for married couples and an additional $500 for each child under the age of 17.
Separately, the CARES Act introduced the Pandemic Unemployment Assistance program, with funding available through the end of the year. It affords benefits to individuals who don’t normally qualify for state benefits, including gig workers, freelancers, independent contractors and small business owners.
Employers and workers continue to grapple with an economic downturn and face an uncertain future caused by the health crisis. In the first three months of the year, the country’s gross domestic product — which represents the output of U.S. goods and services — contracted at a seasonally adjusted annual rate of 5%. What’s more, nonfarm payrolls improved by 4.8 million in June and the unemployment rate declined to 11.1%, but the number of permanent job losers still surged by 588,000 to 2.9 million.
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