The clock is ticking for tens of millions of Americans receiving unemployment who will see their $600 enhanced benefit end next week.
The CARES Act passed in March gave out-of-work Americans an additional $600 per week in unemployment benefits, but the policy is set to expire "on or before July 31." Because states typically pay out unemployment benefits on a weekly cycle that ends on a Saturday or Sunday, that means states will apply the $600 extra payments for time worked until July 25 or 26, rather than the very last day of the month which is a Friday.
If Congress doesn't act to extend those benefits by the deadline of July 25 or 26, experts say it could take several weeks to reauthorize any new aid that comes out of the next relief package.
"What's going to happen is on [July] 25, states will stop paying the $600 and will have to turn that function off in their computer system," says Michele Evermore, senior policy analyst at the National Employment Law Project.
"To get it started back up again, it may take a while to reprogram. I've been told that even in states with modernized systems, it could still take weeks."
Jobless Americans will remember the strain of applying for and receiving unemployment assistance in the early weeks of the pandemic, when more than 10 million claims overwhelmed outdated systems in the last two weeks of March alone. According to data compiled by Andrew Stettner, a senior fellow at The Century Foundation, just 57% of claims — 18.8 million out of 33 million — had been paid nationwide by the end of May.
While the enhanced benefit effectively expires July 25 or 26, depending on the state, Senate Majority Leader Mitch McConnell said Monday that discussions about the next coronavirus relief bill are expected to be "coming to a head sometime within the next three weeks, beginning next week," CNN reports.
Some say continuing to look at the end of July as the final deadline for a decision to be made could leave millions in limbo waiting for a new round of federal aid to kick in.
"If Congress passes a new package next week, it's far more likely that people will get the continued benefit more fluidly and without interruption," Evermore says.
Though the $600 weekly benefit was signed into law March 27, it took roughly a full month for all 50 U.S. states and the District of Columbia to start paying out the benefit.
Evermore, who spent 10 years working in the Senate, says, "In general [the Senate does] tend to take negotiations right until whatever the deadline is to pass something, so I'm not super optimistic Congress will pass an extension on unemployment insurance next week. Not unless they get a whole lot more phone calls [from constituents]. I think if more people realized the benefit really does end on [July] 25, not [July] 31, people would start contacting their Representatives and maybe that would force more action."
The $600 unemployment enhancement has been credited with helping keep 10 million Americans out of poverty this year, and several economists say it's one of the most meaningful ways to keep Americans afloat during the deepening recession. Critics of the policy, however, say that it discourages returning to work for the roughly two-thirds of people who earn more on unemployment than they did from previous wages.
The House passed the $3 trillion HEROES Act in May to extend the benefit until January 2021, but it is unlikely to pass in the Senate when it reconvenes July 20.
"My concern is that Congress knew this expiration date was coming — they passed the bill themselves," says Edgar Ndjatou, the executive director at Workplace Fairness. "I'm finding it hard to believe it has to take more time."
A gap in enhanced assistance "could mean a lot to a family that's barely surviving," he adds, especially as cases of the coronavirus continue to rise in the U.S.
"I think it's important that Congress takes swift action to extend the benefits for another duration of time and include extra protection for workers. It's disturbing, the rise in cases. Workers are more apprehensive about going back to work. In some industries they have no choice. We really have to make sure this bill is as comprehensive as possible."
Without a Congressional reauthorization, state-administered aid averages $333 per week nationwide but ranges from a low of $101 in Oklahoma to $531 in Massachusetts. That means the average unemployed American will see their benefit drop by roughly two-thirds come August. As of late June, 33 million Americans were receiving unemployment benefits.
"I'm really concerned about claimants who may not realize that there isn't a $600 check the last week in July," Evermore adds. "If people budget the way I do, I'm worried people are counting on that money to pay rent." Nearly one-third of households didn't make their housing payment for the month of July.
This article has been updated to clarify that the final enhanced $600 unemployment payment will be made for the workweek ending July 25 or 26.
CNBC Make It is NOW STREAMING on Peacock. Find our original programming in the Channels section.
Don't miss:
