As the new year approaches, government relief programs are set to expire
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We got a whole cornucopia of economic indicators today ahead of the Thanksgiving holiday. Some of those numbers are worth being thankful for: Durable goods orders were a little stronger than expected, along with new home sales and consumer spending.
Other indicators were not so great. There were more initial jobless claims than expected. All in all, more than 20 million Americans filed continuing claims for unemployment during the first week of November.
And starting about a month from today, those Americans will be hurtling over a fiscal cliff that is going to play havoc with their personal economies.
Between Christmas Day and the end of the year, a whole slew of government relief programs put into place to help Americans through the pandemic are coming to an end, with no extension in sight.
Those programs include the government’s Pandemic Unemployment Assistance, meant for people who don’t qualify for regular unemployment insurance such as gig workers and part-timers, and Pandemic Emergency Unemployment Compensation, which keeps benefits going after people use up all of their regular state unemployment insurance.
An estimate by The Century Foundation found that when those programs expire, the economy will lose about two-and-a-half billion dollars a week. And 12 million Americans will lose their benefits.
In normal times, that would force them to rely on non-cash relief. But some of those programs are going away too.
Ever since May, the Agriculture Department’s been running its Farmers to Families Food Box Program, where farmers package up meat, dairy and vegetables for distribution to people who are facing food insecurity during the pandemic. So far it’s delivered around 120 million boxes — roughly $4 billion worth of food.
But that program’s set to expire at the end of the year, too.
In the meantime, food insecurity isn’t going anywhere. It affected around 35 million people before the pandemic, according to the USDA. The nonprofit Feeding America found that the COVID-19 crisis could make that number rise to more than 50 million.
Right now, landlords nationwide cannot evict people who haven’t been able to pay their rent during this crisis — thanks to an eviction moratorium put in place by the Centers for Disease Control and Prevention. That moratorium ends on Dec. 31.
Some estimates have found that between 7 and 14 million people will be at risk of eviction when that happens. The National Low Income Housing Coalition estimates that the cost of evicting these people and the toll on social services could end up being $130 billion.
Some cities and states have their own eviction bans in place, but others have let theirs expire.
Student loans and more
Throughout the pandemic, people with federal student loans haven’t had to make payments. And interest hasn’t been accruing on those loans. All of that ends on Dec. 31, putting tens of millions of people on the hook for payments.
A couple other deadlines are coming up at the end of the year. Expanded tax credits for small businesses, so they can provide their employees with paid sick leave, will expire. And state and local governments have until the end of the year to spend federal money earmarked for COVID-19 expenses.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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