Plan to slash $600 lifeline threatens misery for millions of Americans

For millions of unemployed Americans dealing with the worst economic crisis since the Great Depression a $600 payment each week from the government has been a vital lifeline, allowing them to keep their homes and put food on the table despite losing their jobs.

But now many of those hit hard by the economic disaster caused by the coronavirus pandemic are bracing for a steep drop in income this week as Republican party infighting delays a replacement for an expansion to weekly unemployment benefits, meaning many could have that vital lifeline cut or taken away.

The Senate majority leader, Mitch McConnell, said on Wednesday that the Democrats’ proposal to continue the program, which expires on Friday, through the end of the year was “completely unhinged”, while members of his own party criticized its proposed replacement.

Hanging in the balance of these 11th-hour negotiations are the financial livelihoods of 30 million unemployed Americans and their families, many of whom have struggled to get timely, accurate payments because of the country’s archaic unemployment infrastructure.

Jamie, a 68-year-old pilates instructor in Florida, immediately filed for unemployment when she lost her job in the first week of March. For six weeks, the unemployment office didn’t acknowledge her application so she sought the help of Coast to Coast Legal Aid of South Florida, an advocacy group.

“I hadn’t had any benefits for three months,” she said. “So, I was with zero, zero, zero, zero, zero until Legal Aid stepped in to help.”

Jamie, who did not want her last name to be used, moved out of her apartment because she couldn’t pay rent, and has been living with a relative.

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In late May, she received the benefits she was entitled to, but on Wednesday her check was inexplicably less than it should have been.

“We live in a rich country that has all the resources. I think we should not have to live this way because of the pandemic,” she said. “There are other countries that are not having this problem.”

Debates about whether to renew the $600 expansion have been muddled by Republicans, and also by anecdotal news stories which claim, without data, that the money is “disincentivizing” people from going back to work. An estimated 40% to 68% of workers make more from the expansion, which is paid on top of state benefits, than they did in their jobs, but economists have found this has not deterred people from seeking work.

Those benefiting the most from the expansion are low-wage workers – the expanded benefit is equivalent to $15 an hour – and the people of color and women overrepresented in sectors with the highest unemployment rates. The Congressional Budget Office said of the 19 million workers receiving unemployment insurance in July, 47% are people of color and 53% are women.

No one has said the $600 boost is the perfect solution, but experts say a replacement must be manageable for overwhelmed state unemployment offices.

On Monday, Republicans proposed scaling back the payments to $200 a week until October. Then, states would be expected to implement a system which gives individuals 70% wage replacement, capped at $500, until the end of the year.

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It could take state agencies eight to 20 weeks to implement the wage replacement scheme, according to a memo from the National Association of State Workforce Agencies, obtained by Bloomberg.

Rebecca Dixon, executive director of the National Employment Law Project, said “nothing could be more ill-conceived” than slashing the $600 benefit.

“They are asking these already underresourced and vastly overworked agencies to engage in truly extreme amounts of reprogramming of computers, taking away from current benefit delivery, for a program that lapses on December 31, 2020,” Dixon said.

Democrats, who want to extend the program until economic conditions improve, said the proposal was “totally inadequate”. At least two Republican senators have also denounced the scheme.

Republicans in Congress are also at odds with the White House about other elements of the $1tn stimulus proposal, including Donald Trump’s wish to include funding for the FBI building.

Donald Trump at the White House on Wednesday.

Donald Trump at the White House on Wednesday. Photograph: Jim Watson/AFP/Getty Images

Trump said at the White House on Tuesday that he was still negotiating with Republicans over parts of the bill he opposed. “It’s sort of semi-irrelevant because the Democrats come with their needs and asks and the Republicans go with theirs,” Trump said.

Some Republicans have suggested that because of the divisions, they might have to pass more narrow legislation to address disagreements piece by piece.

In the background of these disagreements is the ongoing crisis in overwhelmed state unemployment agencies.

The legal aid attorney who helped Jamie collect unemployment, Laurie Yadoff, said though Florida’s unemployment system is working better than it did when the pandemic began, there are still many unresolved problems.

Yadoff represents about 150 people in Florida’s Broward county, just north of Miami. Her clients include people in their 80s working through the pandemic because social security doesn’t cover all their needs and people collecting as little as $54 a week in state unemployment.

She said the problems her clients face include waiting hours to speak with a representative at the unemployment office, not receiving the full payments they qualify for and simply not having their claims processed. As of Monday, 82,000 Florida resident’s claims were under review, according to its unemployment office.

Yadoff said most of her clients “just received their money either sometime at the end of May, perhaps in June, some are still getting money in July for the first time and I think some people haven’t received it yet.”

Those who have received their checks are paying back overdue rent and utility bills, paying off credit card debt and stocking up on food after going months without income.

This, said her client Jamie, is what’s missing from the discussions in Washington.

“We’re not the primary priority, we’re secondary,” Jamie said. “First comes the business, first comes this, first comes that. Other places said: take care of the people first, we’ll figure the rest out.”



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