Home General Whatever Congress does on stimulus, millions of workers are already screwed

Whatever Congress does on stimulus, millions of workers are already screwed

Whatever Congress does on stimulus, millions of workers are already screwed

Even if Congress gets its act together soon on a new stimulus bill — as is now expected following months of failed negotiations — it has already run out the clock, so much so that millions of unemployed workers will likely still be harmed. It turns out governance via extreme procrastination is not an ideal approach.

After months of a will-they-or-won’t-they dance that’s left workers, businesses, and much of the economy in limbo, lawmakers yet again have a potential deal: a $748 billion proposal to help boost the economy as the Covid-19 pandemic rages on. While it may have some shortcomings — Democrats dropped state and local government aid from the main bill in exchange for Republicans dropping corporate liability protections — it’s not the worst deal in the world, and it does have new payments for the unemployed.

But there is a hiccup: Even if a bill passes, millions of workers will likely face a lag in receiving those payments while the regulators and states responsible for distributing them iron out the new process.

An estimated 4 million workers have likely already had their benefits run out, some of them for months, after they maxed out the number of weekly payments to them established by the CARES Act, the first stimulus package. However long it takes to get a new system up and running is how long they’ll have to wait before they get another check. Other programs expanded by the CARES Act are set to expire in December, and given the bureaucratic intricacies of the 50-state unemployment insurance system, the transition will probably be a messy one.

“These things are on a timer, and once the timer goes off, resetting that timer is not easy,” said Elizabeth Pancotti, a policy adviser at the advocacy group Employ America.

The cliff workers face now is different from the one they faced at the end of July, when $600 in weekly expanded unemployment payments from the federal government ended.

At that time, the unemployed had been collecting an extra $2,400 a month thanks to the CARES Act, which allowed some of them to boost their savings and kept the poverty rate from skyrocketing. But the United States is now months into the pandemic, and for many, any savings made possible by those extra benefits have dried up. It’s one thing to save for a few months of an emergency; it’s another thing to do it for a year.

Waiting to the last minute to make a last-ditch attempt to help people isn’t great

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2.2 trillion stimulus package President Donald Trump signed into law in late March, had a number of supports for unemployed workers.

It tacked on an extra $600 per week in federal unemployment benefits on top of state unemployment payments through the end of July. It also created a new program called Pandemic Unemployment Assistance, which expanded unemployment insurance to freelancers, gig workers, contractors, and the self-employed; and created Pandemic Emergency Unemployment Compensation, which adds on an additional 13 weeks of regular state unemployment insurance up to 39 weeks. Both of those are set to end in late December.

In designing these programs, Congress made a lot of assumptions about how the US would handle the pandemic — mainly, that it would do a better job than it did of getting the virus under control so that people could get back to work. But nine months later, America still has 10 million fewer jobs than it did pre-pandemic, and as the coronavirus continues to spread, many places across the country are facing shutdowns once again, threatening further job losses.

The latest stimulus plan on the table from Congress would tack on an additional $300 in weekly federal payments for 16 weeks (basically cutting the former $600 in half) and extend the programs set to expire at the end of December for 16 weeks as well. That’s good, but experts warn that given how close lawmakers are cutting it, unemployed people inevitably will have to wait for weeks before they’re able to collect the money owed to them.

If and when a new bill gets passed and signed into law, it’s up to the Department of Labor to issue guidance and regulations laying out how states should implement the law, and that process takes time. Pancotti said exactly how long will vary by program, but she estimates it could take two to eight weeks for checks to start going out.

There was a similar situation when the CARES Act was passed in March: It took states a long time to get their systems for new and expanded unemployment programs up and running, leaving workers frustrated with the system. The same thing happened with the Lost Wages Assistance program President Trump put in place via executive order over the summer to temporarily give some workers a boost.

“If we get a bill at the end of the week, next week is Christmas,” Pancotti said. In other words, this time around, the delays could be worse, because lots of people needed to get these systems set up aren’t going to be in the office.

Some help is obviously better than no help, but the delays in getting people assistance, especially this far into the pandemic, could prove catastrophic to many workers. Pancotti estimates that 4 million workers have already used up their weeks of benefits for 2020, and some of these workers have been without benefits for months. The longer they go without getting assistance, the worse the situation will become. And even for people on the programs that are continuing through December, there could very well be lapses as states rejigger their administrative systems to account for things like the fact that weekly payments were cut in half.

Even though workers will receive back pay to whenever the law is put in place, having to wait could be disastrous for many.

“We’re going to see a wave of evictions, poverty, suicide — this is already a tough time of year for mental health. People may end up going without medicine, exacerbating chronic health conditions, possibly filling up high-interest credit cards, getting payday loans or going to pawn shops,” Michele Evermore, a senior policy analyst at the National Employment Law Project, recently told CNBC.

Workers can turn to Extended Benefits, which are always part of the unemployment system, and basically extend regular state benefits for six to 20 weeks based on economic conditions in their state — basically, when the employment situation is particularly bad. People on that program won’t get kicked off if Congress fails to pass new stimulus, and Pancotti estimates that about 3 million people on extended CARES Act benefits could flow into that scheme. Still, it could get messy, and in many states, Extended Benefits are no longer in place.

Washington doesn’t have to work this way. Neither does the unemployment system.

2020 has revealed a lot of America’s flaws, including how it treats workers — both those who kept their jobs and those who lost them — as well as the degree to which the US unemployment system is deeply problematic in its design.

It operates under a hybrid federal-state setup that in many cases just doesn’t work. The federal government sets minimum parameters and provides some funding. Meanwhile, states are left to their own devices when it comes to how to design their unemployment systems, how generous to be with benefits, what parameters to put in place, and which resources to put into their programs.

So for workers, how lucky they are in navigating the unemployment process and receiving payments — even in normal times — depends on the state they live in. On top of that, unemployment insurance is chronically underfunded and unattended, so problems mount for years.

There is a lot of blame to be cast for the current unemployment situation. Senate Majority Leader Mitch McConnell has for months been a major roadblock to more stimulus, and the refusal to compromise on certain issues — like whether states and cities should be given federal aid — has proven desperately costly to millions of Americans.

But this isn’t just about procrastination on Capitol Hill. If and when a new law is put in place, there will be additional, unnecessary delays due to the number of bureaucratic hurdles there are to get over, ones that are often ungenerous to the neediest workers and intentionally difficult to navigate.

More people notice the issues with unemployment in bad times. But once times are “good” again, they move on, and the political will to fix anything dissipates. There are ways to fix the unemployment system so that it works better in good times and in bad. Some of that might entail making expanded federal benefits permanent and putting in more automatic triggers to help workers in times of economic stress. If the unemployment system were different now, it wouldn’t be the week before Christmas with workers in trouble no matter what Congress decides to do.

This article is auto-generated by Algorithm Source: www.vox.com

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