About 12 million Americans will lose unemployment benefits in December when CARES Act provisions lapse, absent an extension, according to a new analysis, CNBC reported.
Unemployment benefits will terminate for more than half of current recipients at the end of the year, coinciding with a lapse in federal protections for renters and a resumption in student loan payments.
That intersection may spell financial catastrophe for jobless workers without action from Congress or the White House, according to economists.
Meanwhile, Americans had already been reporting higher levels of food insecurity and trouble paying bills, and poverty levels have been steadily increasing in recent months.
“It’s a tremendous amount of risk for families who are affected,” Ernie Tedeschi, an economist at Evercore ISI and a former Treasury Department official, said of expiring aid programs. “[Unemployment benefits] are their last economic line of defense. And it’ll be gone on Dec. 31 unless Congress extends it.”
Further, the economic recovery under way seems to be losing steam, signaled in part by slowing job growth and retail sales. Rising Covid-19 infections, hospitalizations and deaths have led state officials to reimpose some shutdown measures, putting more people out of work.
Federal lawmakers passed the $2.2 trillion CARES Act in March, the largest-ever financial relief package in the U.S., in the early days of the coronavirus pandemic.
The law beefed up jobless benefits in several ways. But those provisions were temporary.
Roughly 12 million workers will lose their benefits at the end of December, when key programs are scheduled to expire, according to an analysis published Wednesday by the Century Foundation. Another 4 million-plus will have already run out of their allotted benefits by then.
The lapsing programs include: Pandemic Unemployment Assistance for the self-employed, gig workers and others ineligible for traditional state unemployment insurance; and one paying about three extra months of benefits to workers who run out of state aid, which typically last up to six months.
Some states with elevated unemployment rates will continue paying aid via extended benefit programs into 2021, CNBC added.
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