At midnight, a government-sponsored financial lifeline for millions of Americans is set to officially expire.
The aid — part of the massive CARES Act signed into law in late March — provided $600 in additional weekly unemployment benefits as the country’s labor force buckles against the backdrop of the coronavirus pandemic. The deadline comes on the same week that the country reported another uptick in the number of jobless claims, marking the 19th week in a row of more than a million applications for unemployment.
Congressional leaders and the White House failed to strike a deal last night, and the Senate has adjourned for the weekend — almost guaranteeing that the subsidy will not receive an extension before tonight’s deadline. Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows are expected to speak by phone this weekend with House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer, but the two parties still appear to be far from reaching an agreement.
Early this week, Senate Majority Leader Mitch McConnell introduced the HEALS Act (or Health, Economic Assistance, Liability Protection and Schools Act) that would include another $1,200 in direct payments to eligible individuals. However, the measure seeks to reduce the enhanced unemployment benefits to $200 per week — a suggestion that has been rejected by Democrats, who insist that the $600 weekly payment be kept in the bill’s fine print.
Congress’ struggle to find common ground comes the same week that the Labor Department shared that more than 1.43 million people filed for jobless claims in the week ended July 25. What’s more, the Commerce Department reported that the U.S. GDP dropped at a 32.9% annualized rate in the second quarter — a 9.5% fall from the prior year’s quarter and the steepest in records dating back to 1947.
When the pandemic swept the country four months ago, state and local officials imposed lockdowns and stay-at-home orders that led businesses to temporarily close their doors and curtailed production as well as consumer spending. Although many regions have launched into their reopening plans, a surge in new COVID-19 infections — particularly in Arizona, California, Florida and Texas — have resulted in reinforced restrictions. Stores and offices that had just begun to rehire their workers were forced to shut down again, pushing more Americans back to unemployment.