Coronavirus stimulus: A new deal remains uncertain as extra unemployment benefits run out
Most of the additional unemployment benefits under the President's Memorandum have now expired, leaving millions of Americans with less income. Another incentive could be more beneficial, but the chances of reaching an agreement before the election are reduced.
At least 26 states have paid out all funds available under the Lost Wages Assistance (LWA) program, with the remainder paying out the previous weeks by September 5 - when the program has actually expired.
"We were technically out of money weeks ago," Michele Evermore, senior policy analyst with the National Employment Law Project, told Yahoo Money. "So the states that pay only pay for the old weeks."
At least 26 states have disbursed all funds available under the Lost Wages Assistance (LWA) program. (David Foster / Yahoo Finance)
The funds depleted come from the fact that more than 26 million Americans remain in need of unemployment benefits and 870,000 unemployed applied for initial benefits last week, a staggering level six months after the coronavirus pandemic.
At the same time, the economic negotiations have been in a stalemate for almost two months as the two parties could not agree on the price of the deal or some provisions. House spokeswoman Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin confirmed on Thursday that they will resume talks soon. However, it remains unclear whether progress will be made, especially before the elections.
"The chances of a deal are already slim," Sarah Binder, professor of political science at George Washington University and senior fellow at the Brookings Institute, told Yahoo Money.
"Spotty, cumbersome and slow"
The LWA program provided a total of six weeks of additional unemployment benefits for the majority of states and was unevenly distributed across the country. People in some states were given $ 300 while others were given $ 400. South Dakotans received no additional benefits after their governor refused to participate in the program.
"The White House believes they solved the problem with this lost wage aid, which was spotty, cumbersome and slow," Evermore said. "It is unlikely that Congress will act before the elections."
U.S. President Donald Trump signs executive orders to extend economic relief from the coronavirus during a press conference in Bedminster, New Jersey on August 8, 2020. (Photo by JIM WATSON / AFP via Getty Images)
While the program effectively lasted six weeks, no other law has been passed to replace it in the near future. The latest Republican proposal, which was rejected in the Senate, provided for increased unemployment benefits of $ 300 a week through the end of the year.
Read more: Coronavirus Stimulus Reviews: What Stops a Second Round Payment?
There's also a $ 1.5 trillion middle ground proposal put forward by a non-partisan group welcomed by the White House. The plan would provide $ 120 billion in unemployment benefits, with workers receiving an additional $ 450 per week for eight weeks starting in mid-October. Up to $ 600 per week would follow through January 2021 so as not to exceed 100% of a person's previous wage.
But the proposal received little attention after initial White House support.
"There is no sign that the president is working to convince Senate Republicans to approve a deal that includes his demand for more cash payments or Mnuchin's support for a package near $ 1.5 trillion "said Binder.
"This is an emergency right there"
Legislators will soon adjourn and campaign before the upcoming elections. Congress is slated to be suspended on October 2nd, but the leadership is likely to stay in Washington to negotiate a stimulus package.
"Legislators are keen to be back in their counties and states in the run-up to the election," said Binder. "But any deal to combat pandemics is negotiated by party leaders and the White House, which means that ordinary lawmakers have limited involvement in negotiating details of an agreement."
Read More: Here's What You Need To Know About Eligibility for Unemployment Benefit
Another 870,000 Americans filed seasonally adjusted new jobless claims last week. (David Foster / Yahoo Finance)
Pelosi told the House Democratic Caucus that the House would remain in session until a stimulus deal was reached. House Majority Leader Steny Hoyer (D-MD) said leadership could stay in session while lawmakers could be called back with 24 hours to vote on a deal.
"The prospect of user interface expansion is dwindling daily," said Evermore. “People just don't hear from people who are really in pain. They just kind of think that because the unemployment rate has gone down, everything is fine now. "
While the unemployment rate has fallen from its high of 14.7% in April, the August rate of 8.4% is the highest since 2012. The unemployment rate for blacks has not recovered at the same pace and is 13% in August at 5, 8% in April before the US pandemic
"It's 13% of black workers," said Evermore. "This is insane. This is an emergency right there."
The Yahoo Money sister site Cashay has a weekly newsletter.
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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Coronavirus stimulus: The wave of US states has run out of additional unemployment benefits as negotiations stall
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