Congress Holds The Economy In Its Hands As Millions Face 'Income Cliff'
More than 25 million Americans are about to lose most of their income thanks to the looming expiration of the $600-per-week expanded federal unemployment benefits.
Congress created the extra benefits in March so that people who lost their jobs because of the coronavirus pandemic would be able to stay home and not feel desperate to go out and make money, as social distancing remains the best way to fight the contagion.
But lawmakers set the benefits to expire on July 31 ― a policy choice that will result in an across-the-board collapse of incomes and reverberate through the economy if it is not renewed. Many workers will receive their final federal checks next week with rent and mortgage payments coming due.
Jami Janes of Meadow Vista, California, worked as a server in a restaurant before the pandemic shut things down in March. She said 10 weeks lapsed between when she filed for unemployment and when she started receiving the extra $600, a major boost to the $269 she gets in state benefits.
“I could pay my rent, I could pay the electricity,” Janes, 53, said in an interview. “It’s not like we’re rolling around in money.”
If Congress drops the benefits, Janes will still receive her state benefits. But they won’t cover her expenses, so she’ll have to pull out her credit cards and cross her fingers.
“I will just start to live off the credit, which really sucks,” Janes said. “I just got out of debt last year.”
As state and local governments started shutting down schools and businesses earlier this year, Congress passed a $2 trillion relief package that included the unemployment benefits, bailouts for businesses big and small, plus direct rebate payments to most households.
State benefits average about $360. Democrats pushed for the extra $600 to try to make up the difference between the average unemployment benefit and the average weekly wage.
The Committee for a Responsible Federal Budget estimated that business closures and job...
