The clock is ticking for Congress to avoid the so-called COVID cliff by extending a slew of coronavirus-related protections for housing and unemployment that are set to expire at the end of the month.
Expanded support for jobless workers, a nationwide eviction ban and emergency paid sick leave are all set to cut off on Dec. 31, leaving millions on the verge of financial peril at the start of 2021.
Economists and advocacy groups are warning that a lapse in protections, even for a few weeks, is now largely unavoidable with just weeks before the deadline. A brief gap would cause significant economic damage, and the inaction in Congress is causing increased anxiety for the most vulnerable Americans at a time of record coronavirus cases, hospitalizations and deaths.
“We essentially are going to make a choice over the next two weeks over whether we want to have a double-dip recession or not,” said Joe Brusuelas, chief economist at audit and tax firm RSM.
The looming expiration of crucial relief programs comes as the U.S. braces for what may be the most daunting stretch of the pandemic yet. Employment growth, economic activity and consumer confidence have fallen as COVID-19 surges through the country, risking another stretch of job losses and retraction.
The weakening economy and a dismal November jobs report have reinvigorated bipartisan negotiations over another round of coronavirus relief on Capitol Hill.
Extending at least some of the aid passed in March through the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act is expected to be a pillar of any eventual deal.
The CARES Act added $600 to weekly state unemployment insurance payouts, extended jobless aid to workers who don’t qualify for the traditional program and provided another 13 weeks of support to workers who exhausted their state benefits. The bill also provided more federal funding for states to extend jobless benefits and fund work-sharing programs that subsidize wages for struggling businesses.
While the $600 boost ended on July 31, the balance of CARES Act unemployment aid is set to expire at the end of December. Roughly 12 million people would lose their unemployment benefits by the day after Christmas, according to a study from The Century Foundation and Employ America, two progressive policy groups.
But extending unemployment benefits is not as simple as flipping a switch, warned Michele Evermore, senior policy analyst at the National Employment Law Project.
Millions of Americans who are eligible for benefits beyond the Dec. 31 deadline will likely go without jobless aid for at least a brief period due to the amount of time needed to update antiquated state unemployment claim systems.
Evermore said it’s essential for Congress to approve an extension as soon as possible so that struggling households avoid making dangerous decisions in the face of adversity, such as maxing out credit cards, taking high-interest loans or forgoing food.
“If it’s just a matter of knowing that they will eventually get a benefit whenever it gets programmed into the system, at least you’re mitigating some of the really horrific harms,” she said.
Those leaning on unemployment insurance to make it through the pandemic may also be facing homelessness when 2021 begins. A national eviction ban imposed by the Centers for Disease Control and Prevention is set to expire on Dec. 31, and renters who’ve benefited from the protection will be obligated to pay missed rent and other fees that accrued during the year.
“The moratorium is protecting a significant number of tenants from eviction, and in that way it remains a critical pandemic mitigation strategy,” said Emily Benfer, a law professor at Wake Forest University who has studied the link between evictions and COVID-19.
Roughly 14 million households are facing eviction if the CDC ban is allowed to lapse, according to federal data analyzed by the investment bank Stout Risius Ross. More than 33 percent of U.S. households fear they will be evicted or foreclosed on within two months, and roughly 8 percent have either missed or expect to miss a rent or mortgage payment, according to a Census Bureau survey conducted Nov. 11-23.
“The individuals, children, and the adults facing eviction will not only be at increased risk of contracting and even dying of COVID-19, they will also be at extreme risk of the associated health harms,” Benfer said.
“And on top of that, they will be relegated to second-class status in that they’ll be pushed to the outskirts of the rental market, they’ll be precluded from seeking employment, from obtaining a mortgage or a car loan, and set on a negative downward trajectory that could alter their futures for the worse.”
With just three weeks until the end of the year, Congress has a narrow timeline to strike a deal and deliver relief. Ongoing negotiations over another government funding deal, the likely legislative vehicle for more coronavirus relief, have also taken time and energy that could go toward an aid package.
Some crucial coronavirus relief programs have already been or could still be renewed through administration action. The Education Department last week extended by one month a freeze on student loan payments and interest accrual through Jan. 31, and the Federal Housing Finance Agency extended a foreclosure ban on all homes with federally backed mortgages through the end of January.
For other programs, however, there’s no replacement for legislation.
“When you have this type of crisis, you have to be prepared to directly address it, overwhelm it and sustain the policy response for longer than anyone wants,” Brusuelas said.
“We’re still 10 million jobs short of full employment. Any idea put forward that you should cut people off the rolls to get them back to work under these kinds of conditions is intellectually dishonest.”