With more than 40 million people unemployed in the United States after the COVID-19 pandemic invaded the country and with the cases showing no signs of slowing down, the upcoming expiration of several CARES Act programs have caused people to worry about their financial futures. Will the coronavirus stimulus package continue to keep those citizens afloat?
There were many programs enveloped into Congress’ CARES Act, such as the one time $1,200 stimulus checks, the paycheck protection program, economic injury disaster loans, and emergency grants. By late June, many of these programs were beginning to phase out, as deadlines loomed that were set initially in March—before the world knew how long the pandemic could last. For example, the Paycheck Protection Program provided eight weeks of payroll, rent, and utility costs for businesses that successfully applied, and many were running out of the assistance sometime in June.
The CARES Act passed significant provisions for those who have lost their jobs. The act included a new program called Pandemic Unemployment Assistance—which provides unemployment benefits to people who wouldn’t usually qualify for regular unemployment insurance, such as self-employed workers. The Pandemic Emergency Unemployment Compensation extended unemployment benefits for 13 extra weeks. Lastly, the Pandemic Additional Compensation program provided unemployed people with an extra $600 a week from the federal government.
The Pandemic Additional Compensation program will expire on July 25 and leave the millions of Americans receiving financial assistance with only the typical unemployment payment provided by their state. The amount varies by where you live, but USA Today reported that weekly state benefits average around $370.
That average payment is well below the national average cost of living— $67,690 a year, or roughly $1,300 a week.
Michele Evermore, a senior policy analyst at the National Employment Law Project, told CNBC that July 31 was an “arbitrary pick.”
“In late March, we all thought this was going to pass in a few months,” Evermore said. Now, “I really don’t think we’re going to be back to business as usual for a quite while.”
The HEROES Act, recently passed in the House of Representatives, would extend that $600 weekly benefit until early 2021. However, USA Today reports that it seems unlikely that the Republican-led Senate will approve it because many senators believe it encourages Americans to stay unemployed. Goldman Sachs told USA Today that it thinks the Senate will extend the payment but at $300 a week.
According to CNBC, the Pandemic Additional Compensation program and the Pandemic Emergency Unemployment Compensation program are both slated to end on or before Dec. 31, 2020. As of now, neither will extend into the new year.
Additionally, the CARES Act gave many renters living in apartments or single-family homes a 120-day grace period to pay their rent. That ends July 25 for residents in apartments and Aug. 31 for those in single-family homes. Homeowners are allowed to suspend federally-backed mortgage payments for up to a year.
On July 27, it was reported that Republican senators had released a new $1 trillion package, though that’s much less than the Democrat House members’ proposed $3 trillion program. Both bills call for another $1,200 check for a single person and $2,400 for couples. Treasury Secretary Steve Mnuchin has said he wants the legislation to be completed by the end of the month.