As 1.4 Million More Lose Jobs and Income Cliff Looms, Trump's Senate Allies Eye Unemployment Benefit Cuts While Still Overlooking PPP's Failures
WASHINGTON, D.C. – The U.S. economy slipped further into recession as 1.4 million more workers entered the unemployment ranks this week – marking the 18th straight week that over a million workers filed initial claims for jobless benefits. With the CARES Act’s enhanced benefits set to expire in most states at the end of the week, millions of families face an income cliff and great uncertainty. Yet despite 75% public support for extending them, the President’s allies in Congress are taking a hard line that any extension must include deep benefit cuts – threatening to slash over 20 million workers’ income by half. Meanwhile, Congress is refusing to address the flaws in the Trump SBA’s poorly designed and executed Paycheck Protection Program that allowed for over 110,000 small businesses to shutter, especially in communities of color.
“Yet another week of horrific job loss and small business closures, but somehow the lesson the President and his allies in Congress have learned is that it’s time to do even less,” said Kyle Herrig, president of Accountable.US. “They think massive layoffs in a pandemic can be reversed by leaving workers with even less money to feed their families and avoid eviction. What don’t they understand about there being millions more people out of work than there are jobs available amid our worsening health crisis? Trump’s allies want to rein in one of the CARES Act’s most successful efforts to help struggling people through this crisis, yet allow the broken PPP program to continue to abandon thousands of small businesses, especially in communities of color. Continuing to take two steps backward for every step forward will never get the economy any closer to recovery.”
WHERE TO START ON THE ROAD TO RECOVERY: In addition to immediately extending the CARES Act’s enhanced unemployment benefits, Congress must turn the page on the Small Business Administration’s poorly designed and managed program. Rather than repeating the Trump administration’s mistakes, any new effort to help small businesses must be transparent, data-driven, and aligned with the needs of the communities that need help the most.
Leader McConnell may have had a good laugh at the prospect of passing another relief bill before enhanced unemployment benefits expire, but there’s nothing funny about his decision to “take a pause” on negotiations over two months ago.
It’s Clear More — Not Less — Needs to Be Done as The Trump Recession Gets Worse for Millions of Americans:
- CBS News, 7/21: In less than a week, the extra $600 in federal weekly unemployment benefits Americans have been collecting during the recession will come to an end for about 25 million out-of-work adults — a plunge off an “income cliff” that could imperil their ability to pay rent and other bills.
- Wall Street Journal, 7/21: As $600-a-Week Jobless Aid Nears End, Congress Faces a Quandary. Jason Furman, who was a top economic adviser to President Barack Obama, estimates that if the $600 payments are ended, economic output would be reduced by 2.5% in the second half of the year and two million jobs would be lost.
- CBS News, 7/21: 1 in 10 Americans don’t have enough food, double the rate before pandemic. Black and Hispanic adults are experiencing worse hardship than Whites, however, with the report finding that about 1 in 5 adults of color saying they have struggled to afford food, while almost one-third and one-quarter of Black and Hispanic adults, respectively, are behind on their rent.
- Vox, 7/21: “The jobs aren’t there”: Why cutting off enhanced unemployment benefits would leave workers in the lurch. According to an analysis by the Economic Policy Institute, as many as 11.9 million workers have zero chance of returning to their prior jobs as temporary job losses become permanent ones.
- CNBC, 7/21: Employment recovery going backward in states hit hard by virus, small business data shows. Nationally, employees going to work at small- and medium-sized businesses was down more than 23% compared with its pre-crisis levels for the seven-day period ending July 19, according to Homebase.