Letter to President Donald Trump, President of the United States - Reps. Kildee, Davis Lead 75 Members of Congress Urging Trump Administration to Extend Unemployment Benefits
Dear Mr. President,
We write to express our strong support for extending the unemployment supports established through the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. These benefits are critical to continuing to support hardworking American families and businesses impacted by the coronavirus.
Throughout the pandemic so far, over 288,000 Americans have lost their lives and over 10 million Americans remain unemployed. According to the U.S. Bureau of Labor Statistics, the country's unemployment rate stands at 6.7 percent-- far above 3.6 percent in January 2020, before the coronavirus spread within the United States. Furthermore, long-term unemployment continues to increase: over one third of those unemployed in November were jobless for at least six months.
The coronavirus pandemic--and the subsequent health and economic crisis it created--is far from over. We are in the midst of a third wave of coronavirus cases, with the majority of states experiencing unchecked community spread. In November, Federal Reserve Chairman Jerome Powell said that the recent rise in COVID-19 cases poses a great risk to our economic recovery.
Unfortunately, the Federal Pandemic Unemployment Compensation (FPUC) expired at the end of July. FPUC was a $600 per week supplemental federal unemployment benefit that served as a lifeline to millions of Americans during the pandemic. However, the House of Representatives passed two relief bills--The Heroes Act in May and an updated version of The Heroes Act in October--to extend critical unemployment provisions. Now, we are staring down another unemployment benefit cliff. Many federal unemployment supports will expire at the end of the year, absent further action.
Without expeditious action, the following direct benefits to workers and supports for employers will expire at the end of the year:
Up to 13 weeks of Pandemic Emergency Unemployment Compensation (PEUC), which provides additional benefits for those who have exhausted state unemployment;
Up to 39 weeks of Pandemic Unemployment Assistance (PUA), which provides workers who are not eligible for state unemployment insurance, including self-employed and gig workers, unemployment benefits;
Full federal funding for up to 20 weeks Extended Benefits (EB), which states trigger onto at high unemployment rates;
Interest-free loans to states to keep their unemployment trust fund solvent and delay unemployment tax increases to employers;
Full federal funding for Short-Time Compensation or Workshare programs, which allow employers to temporarily reduce their employees' hours without having to let them go;
Full federal funding for the cost of waiving the "waiting week" for unemployment benefits; and
50 percent federal funding for the cost of unemployment insurance paid to employees of nonprofits and local governmental entities that enter into reimbursable arrangements with state unemployment programs, instead of paying per-worker unemployment taxes.
The impending unemployment benefit cliff will negatively impact American workers, businesses and the economy at large. The Century Foundation estimates that more than half of the workers who are currently relying on unemployment insurance to survive will be cut off at the end of December.
This means that millions of Americans will no longer be able to afford paying rent, putting food on the table and covering health care expenses. Because workers receiving unemployment insurance inject that money straight into their local economy, the businesses that rely on these customers will also suffer losses if these benefits expire. This will have a ripple effect throughout the economy at large, slowing consumer spending.
Additionally, without federal support for unemployment insurance or interest-free loans to cover state unemployment trust funds, employers in many states will face increased unemployment taxes. According to the Tax Foundation, 27 states have a tax that automatically triggers when the unemployment trust fund falls below a certain level.
Therefore, it is essential that we provide vital unemployment benefits to workers across the country, especially before the unemployment provisions in the FFCRA and the CARES Act expire at the end of December. Cutting off enhanced unemployment benefits while the economy is still in crisis would ignore the millions of Americans who are still suffering. We hope that you will support this measure as soon as possible.