Hot U.S. Jobs Market Eases Sting of Expiring Pandemic Relief

(Bloomberg) -- The strengthening U.S. economy is relieving pressure on President Joe Biden and congressional Democrats to extend a series of assistance programs that kept Americans afloat during the pandemic, including enhanced unemployment benefits due to expire in just four weeks.

By the end of September, extra food benefits are also set to conclude. And on Oct. 3, a ban on evictions will end, if it isn’t struck down sooner by courts.

On Friday, the Biden administration solved one cliff that had been looming at the end of September, announcing a final extension through January of a measure allowing students to miss loan payments without accruing interest. The hot U.S. jobs market is meanwhile eroding support for enhanced unemployment benefits in particular, which look almost certain to end as scheduled on Sept. 6.

Tens of millions of Americans have depended on relief from evictions and student-loan payments and on extended and expanded unemployment benefits, along with nutritional assistance during the pandemic, and some Democrats fear that a sudden end to the programs could still cast many families -- and the broader U.S. economy -- into chaos. Black and other minority families may be especially vulnerable; the African-American unemployment rate is 8.2%, well above the overall jobless rate of 5.4%.

The patchwork nature of the programs may also leave people more susceptible to falling through cracks as they expire. Other than student loans, however, Democrats have yet to coalesce around any plan for extended help, including its components and duration.

“I am very worried,” said Senator Bernie Sanders of the looming cliff for assistance. “Obviously we have got to do everything that we can to maintain a strong safety net.”

House Democrats failed to agree on a last-minute extension of an eviction moratorium at the end of July following a request from the White House, leading to protests and finger-pointing within the party after it briefly lapsed. The Biden administration issued a new moratorium on Tuesday.

Some lawmakers are urging an extension of most or all of the programs, while others want to wait and monitor the trajectory of the economy and the surge in the pandemic caused by the delta variant of coronavirus. Friday’s better-than-expected jobs report is likely to encourage those who want to scale back federal assistance; payrolls climbed by more than 900,000 for a second straight month.

Little Support

Two Senate Democrats, Tom Carper of Delaware and Jeanne Shaheen of New Hampshire, said even before the employment figures that expanded jobless benefits, at least, would come to an end.

“I think we’re going to allow the $300 weekly supplement to expire,” Carper said. Asked whether there’s appetite for another extension, Shaheen said, “I can tell you in New Hampshire that there’s not.”

On a unilateral basis, the Biden administration can likely only extend the pause on student loan payments. Congress would have to act on unemployment benefits and food stamps, and the Supreme Court has signaled further extensions of the evictions ban will also require legislation.

With just four weeks before the current enhanced unemployment benefits run out, lawmakers look unlikely to act. The House isn’t scheduled to return to Washington until Sept. 20, and the Senate has given no sign of passing legislation before it leaves for its summer recess next week.

‘Temporary Boost’

“There’s no vehicle that’s going to get it done by Sept. 6,” said Andrew Stettner, a senior fellow at the Century Foundation. He estimated in a study published Aug. 5, before July’s jobs report, that 7.5 million Americans would lose all their unemployment benefits on Labor Day and 3 million would lose the additional $300 a week.

Biden has indicated he supports letting unemployment benefits return to normal, saying in early June that the extra $300 a week was only intended to be a “temporary boost.”

But there’s particular concern about the fate of Black Americans. They don’t enjoy the same labor market as their White counterparts, said Elaine Waxman, a senior fellow at the Urban Institute, and there is no evidence they’ll be hired back at the same pace or enjoy similar wage gains.

Black, Hispanic and Asian Americans are all projected to have higher poverty rates in 2021 than White, non-Hispanic people, according to a recent Urban Institute study.

National Economic Council Director Brian Deese said in June that Biden supports maintaining pandemic relief programs for gig workers and freelancers beyond their expiration for salaried workers, a focus of several senators including Finance Committee Chairman Ron Wyden, an Oregon Democrat.

White House Press Secretary Jen Psaki said Thursday the administration’s views on the expiring unemployment programs hadn’t changed.

Poverty Impact

The pandemic benefits programs helped notably: The overall projected poverty rate of 7.7% is much lower than the 13.9% rate in 2018. Stimulus checks made the biggest difference, the study found, keeping 12.4 million people out of poverty, if other programs are held constant.

Expanded unemployment insurance lowered the number of people in poverty by 6.7 million, while a boost in benefits under the Supplemental Nutrition Assistance Program reduced poverty by 7.9 million people, the study showed.

“On SNAP, for instance, I could make the argument that that new level should continue because it’s what’s necessary to actually feed families,” said Senator Chris Murphy, a Connecticut Democrat. But whether any other programs should be extended depends on the course of the delta variant, he said, adding that safety nets like expanded unemployment insurance and the eviction moratorium should not be made permanent.

The eviction ban has protected an estimated 11 million Americans who fell behind on payments. But most of the $47 billion appropriated by Congress to help them catch up remains mired in bureaucracy as states struggle to distribute the money. While an additional 60 days will help, some advocates worry that the new eviction moratorium will only delay the inevitable in some areas.

“We really can’t afford to take our foot off the gas right now,” said Lindsay Owens, a former adviser to Massachusetts Senator Elizabeth Warren and Congressional Progressive Caucus Chairwoman Pramila Jayapal who is executive director of Groundwork Collaborative, a liberal research group.

“This is going to be at odds with getting back to the strong economy that we know we can have,” she said, warning that the impact of a cutoff of the programs may be most serious in high-poverty states where “the pandemic is raging.”

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