You May Lose Your Unemployment Benefits in April if Congress Fails to Act

• Author: Bryan Miller
• Posted: 2024-08-05

As the Covid-19 cases surged and parts of the country went into pandemic lockdowns, tens of millions of Americans were pushed to the unemployment lines, and millions began receiving unemployment benefits under the federal stimulus bill. According to economists, the jobless workers soon increased their spending above pre-pandemic levels after receiving the weekly payments worth roughly 4% of the national income. According to a new study, these workers stand to lose the unemployment benefits by mid-April.

More Than 11 Million People are Counting on Congress

According to a new Century Foundation report, more than 11 million Americans could lose their unemployment benefits between March and April without more Covid-19 relief if Congress does not pass an extension. More precisely, about four million workers will lose their benefits on March 14, and the payments of more than seven million more will expire over the subsequent four weeks.
The report asserts that only 734,000 workers would receive the extended benefits in April.

Biden's Hope

Last month, President Joe Biden proposed a $1.9 trillion relief package to continue the emergency unemployment payments and boost the benefits from $300 to $400 per week. Of course, the current cliff hanger is a lot bigger than the one American workers faced in December last year, but Biden's proposal could avert it.

According to the report, continuing the benefits means churning out $9.6 billion each week to the families. The report further urges the legislators to act fast to allow the states enough time to prepare for the fresh guidelines so that the benefits don't get disrupted.

According to a proposal issued by Democrats, the $400-a-week aid would last until August 29. The Democrats are looking to pass the legislation without the Republican votes through reconciliation, a special budget measure.

The Benefits Cliff

Last year's $900 billion package successfully extended the Pandemic Emergency Unemployment Compensation and the Pandemic Unemployment Assistance; they were expected to lapse after Christmas. Today, these two programs were extended through March 14, and the Americans who don't deplete their allocation by then can continue collecting the benefits until April 11.

The Century Foundation analysis says that more than 10 million workers will lose their unemployment benefits by mid-April; what's worse is that they won't even quality for aid through other programs.

Opponents Say That the Stimulus Plan Is Damaging

Although Biden's stimulus plan seems proper, at least on the surface, some opponents believe that it could ultimately damage the economy. They argue that the benefits could offer people an incentive to stay out of work.

Even so, economic studies that sought to investigate the likelihood of a disincentive during spring and summer didn't find evidence that unemployment benefits had the effect. At the time, the American workers were being paid $600 per week, and the jobs were scarce. Generally, economists maintain that they're yet to see how additional benefits would affect the workers in the current U.S economy.

Actually, experts have noted that the enhanced benefits have played a huge role in reducing the risk of foreclosure, eviction and debt default. According to a previous report by the National Multifamily Housing Council, many renters have been able to stay current on their payments, thanks to the support programs being provided to the citizens by the government.

The Economic Challenge Still Lingers

The pandemic has damaged the entire economy; the damage is so wide that there's a chance we are overlooking how unevenly households are suffering. Although it's almost a year since Americans started feeling the Covid-19 crisis, many are still struggling to survive. About 11.2% of the adults, which is more than 24 million people, are currently living in households where there isn't enough to eat.

Moreover, over 82 million adults are living in households that have experienced minor or major difficulties in paying for the everyday household expenses during the Covid-19 pandemic, according to the Census Household Pulse Survey that was released on Wednesday. To make matters worse, almost 62 million adults are expecting to lose their employment income in the coming weeks.

According to experts, many workers got a lot more from unemployment than they had been making from their jobs before the pandemic began, since they were being paid too little to begin with. The average unemployed worker received as high as 134% of their earnings before the virus from the unemployment insurance and about 20% received more than twice the amount of money they were making before the pandemic. As it seems, therefore, things may go from bad to worse if Biden's proposal doesn't sail through.