Rep. Alexandria Ocasio-Cortez (D-New York) has unveiled a bill to extend additional unemployment aid after lawmakers allowed the program to expire on Labor Day, leaving millions of unemployed people in the lurch.
The bill would extend the benefits that were first introduced during stimulus talks last year until February 1 of next year and would make payments retroactive to September 6, when the benefits expired.
“I’ve been very disappointed on both sides of the aisle that we’ve just allowed pandemic unemployment assistance to completely lapse, when we are clearly not fully recovered from the cost effects of the pandemic,” Ocasio-Cortez said during a town hall Tuesday. “I simply just could not allow us to let this happen without at least trying.”
The checks, which sent hundreds of dollars to unemployed people each week, were critical in keeping people afloat during the pandemic. A Census Bureau report released Tuesday found that the unemployment checks kept 5.5 million Americans out of poverty in 2020, with the stimulus checks lifting another 11.7 million out of poverty.
Democrats and progressive groups have been pushing for an extension of the unemployment aid. In August, over 100 House Democrats sent a letter to House leaders urging them to take up a bill to reinstate the $600 unemployment checks that were being sent out last year.
“We owe it to people waiting to get back to work across the country not only to extend unemployment benefits to help them pay their bills, but to tie these benefits to economic conditions so workers are not held hostage by another cliff like this one,” the lawmakers wrote.
In April, 38 Democrats and progressives wrote a letter to President Joe Biden calling on him to include permanent unemployment benefits in his infrastructure package, but that call was left unheeded. Meanwhile,the reconciliation bill focuses on job creation but does little to help unemployed workers directly. When the checks expired early this month, there was negligible action from Democratic leadership, who were preoccupied with details surrounding the bipartisan infrastructure and reconciliation bills. People like Biden and House Speaker Nancy Pelosi (D-California) were mum about the issue, allowing the benefits to expire for the estimated 7.5 million people who were receiving them.
Republicans have been staunchly against the additional unemployment aid, despite the aid’s vast impact on poverty reduction and economic recovery and growth.
“The negative economic impacts of these incentive effects have always been exaggerated,” the Economic Policy Institute’s Josh Bivens wrote in June, “but these effects become truly trivial during times when the economy’s growth is clearly constrained.” Bivens argued that unemployment benefits are massively helpful to the economy, with every dollar spent on unemployment aid returning to the economy by up to double the amount. According to his report, the only reason the economy hasn’t seen further growth as a result of unemployment aid being distributed, is that the checks were relatively stingy and small.
Still, Republicans and some conservative Democrats have latched onto a false narrative about unemployment aid. Governors in 26 states, all but one of whom are Republicans, cut off the unemployment checks early this summer, promoting the fallacious claim that there was a worker shortage. However, data from the Labor Department demonstrated that cutting off the unemployment aid didn’t accelerate the rate of employment; if anything, it created a slight lag.
“Allowing unemployment benefits to expire does not force people back to work,” Ocasio-Cortez said Tuesday. Referring to the bill, she continued, “Even if the majority of the caucus is not on board, we are going to do our best to make that effort.”
Ocasio-Cortez will likely face opposition from the usual conservative Democrats like West Virginia’s Sen. Joe Manchin. Manchin in August told Business Insider that he wouldn’t support extending unemployment benefits. “I’m done with extensions,” he said. “The economy is coming back.”
While Manchin is correct in one way — the economy has been booming for the wealthy — he’s incorrect on one crucial point: Growth for the middle class is still stalling, and poverty only decreased last year because of government aid in the form of stimulus payments, social security and unemployment checks.
Now that benefits from the stimulus packages are expiring, the future is uncertain. Economists predict it will take years for the economy to fully recover from the pandemic. Meanwhile, the pandemic is still very much ongoing, with infection numbers in the U.S. reaching new peaks and death counts ticking upward each day.
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