No matter what Congress does, 12 million jobless Americans will temporarily lose unemployment benefits

No matter what Congress does, 12 million jobless Americans will temporarily lose unemployment benefits

The clock is ticking on Capitol Hill as discussions between Republicans and Democratic lawmakers regarding a second stimulus package roll on in Washington. But no matter what actions they take, some 12 million Americans will see a lapse in their unemployment benefits soon.

These Americans include gig workers, independent contractors and self-employed workers, as well as jobless Americans who will exhaust the maximum number of weeks that an individual can receive jobless benefits in their state. In pre-pandemic times, gig workers, freelancers and self-employed workers were ineligible for unemployment benefits. 

But through a CARES Act program known as Pandemic Unemployment Assistance, these workers became eligible for the $600 a week in federal unemployment benefits, which expired in July. They were also eligible for state unemployment benefits that were calculated based on the average weekly unemployment benefits in their state.

That’s set to expire on Dec. 31 but because state workforce agencies typically pay out unemployment benefits on Saturday, some 7.3 million Americans who have received benefits through the PUA program will be receiving their last checks on Dec. 26 — just one day after Christmas, according to a report by Andrew Stettner and Elizabeth Pancotti from the liberal-leaning Century Foundation.

Another 4.65 million Americans will also see their benefits drop to zero on the same day. These Americans were approved for an additional 13 weeks of unemployment benefits through another CARES Act program, Pandemic Emergency Unemployment Compensation, after exhausting the number of weeks they were granted by their states. 

California’s Employment Development Department alerted some 3 million Californians that they should not expect to receive further benefits after Dec. 26, “unless the U.S. Congress takes further action to extend them.” Alerts sent out to claimants by email, text and mail also informed Californians of food and cash assistance programs.

In New York, some 1.4 million workers will stop receiving unemployment benefits entirely on Dec. 26, the Century Foundation report found.

Unlike stimulus checks, which lawmakers are considering including in a second stimulus package and could be sent out relatively quickly — though at half the size of the checks that went out in April — state workforce agencies need time to recalibrate their backend systems to implement any new changes. 

For instance, when President Donald Trump authorized the Federal Emergency Management Agency to use disaster relief funds to pay out $300 extra a week to some unemployed Americans, it took some state workforce agencies months to make the necessary changes to their systems. 

However, if Congress were to authorize a second round of stimulus checks, the Treasury Department would essentially just have to “push a button and [the stimulus checks] would be in people’s bank accounts, they’ll have that money before the end of the year,” said Claudia Sahm, a former Federal Reserve economist.

That’s because the Treasury Department, during the first round of stimulus checks, already complied a “master file” of every Americans’ information who was eligible for a check, Sahm said, based on conversations she has had with officials at the department.

A bipartisan stimulus package proposal calls for a 16-week extension of the two CARES Act programs that are set to expire on Dec. 26. It also calls for $300 a week in enhanced unemployment benefits that jobless Americans would receive on top of their state unemployment benefits for 16 weeks, beginning at the end of this month.

Senate Majority Leader Mitch McConnell said Friday that he’s “even more optimistic now than I was last night that a bipartisan, bicameral framework for a major rescue package is very close at hand.”

On Thursday, the Kentucky Republican said it was “highly likely” that lawmakers would have to work over the weekend to finalize a stimulus package.

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