Extra unemployment aid expires as virus threatens new states

As public health officials warned Friday that the coronavirus posed new risks to parts of the Midwest and South, enhanced federal aid that helped avert financial ruin for millions of unemployed Americans was set to expire — leaving only threadbare safety nets offered by individual states to catch them.

Early in the pandemic, with the economy cratering, the federal government added $600 to weekly unemployment checks. That increase ends this week, and with Congress still haggling over next steps, most states will not be able to offer nearly as much while they wrestle with diminishing unemployment trust funds.

The extra federal aid helped keep Wally Wendt and his family afloat.

Wendt, 54, of Everett, Washington, was laid off from the fitness company where he worked for 31 years. The extra benefits helped him pay for a loan to put a new roof on his house that he took out before the virus struck.

The money also helps his daughter, who was laid off from a restaurant job. With the boost, she’s able to afford diapers, formula, rent and utilities. If it ends, Wendt said, his daughter and her two children might move in with him.

“The politicians need to get their ducks in a row.” Wendt said. “The pressure’s not on them, it’s on all of us blue-collar workers who are struggling to make a living.”

The regular benefits often leave recipients with poverty-level incomes, but at least they’re sure to continue.

Every state offers assistance for at least some unemployed workers based on a portion of their previous earnings. The maximum amounts vary widely, from $235 a week in Mississippi to $1,234 in Massachusetts. The length of time benefits are available ranges from as few as six weeks in Georgia to up to 28 weeks in Montana. Most states normally cut people off after 26 weeks.

Aside from the pandemic's economic damage, the virus itself threatens to overwhelm parts of the country that have been relatively unscathed so far.

White House coronavirus response coordinator Dr. Deborah Birx warned in a television interview that the surge of cases in the South and Southwest could make its way north.

“What started out very much as a Southern and Western epidemic is starting to move up the East Coast, into Tennessee, Arkansas, up into Missouri, up across Colorado,” Birx told NBC’s “Today” show. She implored people to wear masks, wash hands and keep at least 6 feet apart.

Birx said that health professionals have “called out the next set of cities” where they see early warning signs because if those cities make changes now they “won’t become a Phoenix.” Arizona's sprawling capital city has suffered a severe outbreak, though Birx said Friday the federal government was seeing encouraging declines in positive test results there and in San Antonio.

Meanwhile, lawmakers in Washington were negotiating a new coronavirus relief bill as state and local governments, schools, businesses and others pushed for a new dose of aid. Congressional Democrats have sought to keep the extra $600 in unemployment checks rolling. The Republicans who control the U.S. Senate have proposed benefits worth 70% of what people made before.

The $600 weekly bonus is set to expire July 31, though this is the last week recipients will get the extra funds.

Initially, Congress extended benefit periods by 13 weeks, and some gig workers and freelancers — usually ineligible for unemployment payments — could start getting them. The extra time and benefits for people who would not normally qualify remain, even if the $600 is not renewed.

Critics noted that the boosted benefits meant many workers were receiving more for not working than they did working — a possible disincentive for returning to the job. Supporters cast that as an acknowledgement that wages were too low, and said the extra money was a chance for workers to build up a cushion in case they remained unemployed after benefits expire.

The federal government is making interest-free loans to states that deplete their unemployment insurance trust funds, and 10 states have received them so far. But paying the U.S. back after a crisis can keep states from building up reserves. Pennsylvania just finished paying off its loans from the Great Recession.

Hawaii is one state that is preserving part of the boost, increasing unemployment checks by $100 a week for the rest of the year. To pay for it, the tourism-dependent state is using nearly one-fifth of its main pot of federal coronavirus aid.

Georgia is allowing people to earn more from part-time jobs while still receiving unemployment benefits. In most places, however, similar measures have not taken hold.

The New Hampshire Legislature, controlled by Democrats, approved a bill to increase the maximum payment by $100 weekly, to $527. Republican Gov. Chris Sununu vetoed it, saying that some of the details could have jeopardized federal funding.

In Arizona, Democrats have also pushed for increasing the maximum benefit by $100. No change has been made, but this week Gov. Doug Ducey, a Republican, wrote a letter to the state’s congressional delegation asking them to support putting more federal money in the state’s unemployment trust fund. He also said workers laid off because of the pandemic should bring home at least as much as the did when they were working.

“It is by no fault of their own that certain businesses have a higher risk of transmission," he wrote, "and therefore are being required to close by the government.”