A wide range of economists have expressed fears that Congress would leave the city without first working on a new coronavirus relief package that they say is critical to the country’s recovery, and to millions dependent on government help.
More than 28 million Americans on some form of unemployment insurance lost a crucial source of income after a $ 600 weekly boost to those benefits last month.
Those households now have much less money to cover basic expenses, including payments for rent and housing that they can no longer forgive after the expiration of federal bans on evictions and foreclosures.
While it may take weeks to see the effects of the lapse in aid, especially progressive economists are raising alarms about the possible toll on unemployed Americans and those who depend on it.
‘Let’s get money back in the economy. Let’s get it back in the pockets of working people in this country. They will pay their bills, they will spend it, and they will keep a roof over their family’s heads and feed themselves, ”said Michelle Holder, an economics professor at John Jay College.
Democrats, who are trying to increase pressure on Republicans to budget, have made similar arguments.
“We can not wait until September 30,” Speaker said Nancy PelosiNancy PelosiSusan Collins asks Postmaster General to address delays in ‘critical email’. Trump says he would sign the USPS for legislation, but will not seek changes to help send e-mails about the money: Senate leaves until September without coronavirus relief agreement | Weekly unemployment claims fall below 1 million for the first time since March Trump says no Post Office funding means Democrats ‘may not have universal post-in-votes’ MORE (D-Calif.) Said this week of talks on a new package for coronavirus relief, “because people will die.”
Legislators, however, feel a little pressure to relocate from their positions.
Democrats have offered to reduce the price tag on their legislation by more than $ 3 trillion to the $ 2 trillion neighborhood, but the White House has refused to go above $ 1 trillion.
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The White House, for its part, also does not seem to feel the heat. Markets are high and unemployment fell to 10.2 percent in July. Trump is taking executive action aimed at extending some of the incentives, and he and his allies have used their bully pulpit to put the blame on Democrats.
If the delivery is in support of impact, the first hard evidence may come in the August report for jobs. But it will not be released until Sept. 4. Consumer data and income data for August will not come until 1 October.
Prospects and evictions can also take months to process, but missed rent payments have been steadily rising since the start of the pandemic, according to data from insurance company LeaseLock.
That data suggests the upcoming problems, say economists who claim it is a mistake for the government to take a break.
“People do not agree on a probable recovery. I do not share the optimism about a rapid recovery that some conservative politicians seem to have, ‘said Glenn Hubbard, former chairman of the White House Council of Economic Advisers under George W. Bush, during a Friday panel appearance. .
Hubbard added that he was “mystified” that lawmakers were unable to strike a deal, seeing the threats to the economy.
While markets are high, this is in part because they are pricing in a new relief package, assuming Congress continues.
Instead, the Senate left Washington, DC, on Thursday. Both rooms will only return after Labor Day.
Alix Gould-Werth, director of family economic security policy at the Washington Center for Equitable Growth, a progressive think tank, said there is a danger that if people cut costs less, the pandemic of unemployment will spread.
“Unemployment, just like the virus, is a contagious thing,” she said.
The deep partisan divisions over unemployment benefits have made a deal unbearable. While Democrats have called for expanding the week’s impetus of $ 600 with declines scaling to the unemployment rate, Republicans have ruled out anything that unemployed workers could earn more than they did at their previous jobs.
The impetus of the CARES law on unemployment benefits increased the weekly unemployment insurance benefit above the average weekly wage in 38 states, but several studies show that the dynamics did not discourage the unemployed from looking for jobs.
“It’s important that this does not become a permanent feature of the unemployment insurance system,” said Michael Strain, director of economic policy studies at the law-abiding American Enterprise Institute.
“But there are a lot of numbers between zero and 600 that we can do as a short term.”
Success in further aid to state and local governments could also weigh heavily on the future of public sector workers. The sharp decline in tax revenues and the rising costs of the pandemic could force state and local governments to cut back on essential services and workers who carry them out to keep their budgets balanced. State and local governments have already forgotten 1.5 million workers since the pandemic began, according to the Department of Labor, and the toll is likely to increase without further help.
Democrats have proposed giving hundreds of millions of dollars to state and local governments, an unpopular prospect among Republicans who see it as a bailout for irresponsible local officials. It appears to be a particular sticking point for Trump, who has repeatedly shot herself against it.
“Many state and local governments are mismanaged and they are likely to be concerned about the federal government that mismanages states and local governments,” Strain said.
“But even the best-managed states are suffering revenue losses this year and next,” he added.