Unemployment advantages to finish for hundreds of thousands in April with out extra aid

People line up outside St. Charles Borromeo Church in New York City to receive free food donations on November 19, 2020.

Robert Nickelsberg | Getty Images News | Getty Images

Nearly 11 million Americans will lose unemployment benefits in about two months without additional Covid relief, according to a new analysis.

This so-called benefit cliff is larger than the one workers faced in December when Congress debated the contours of a $ 900 billion pandemic relief effort. That’s according to a study published Wednesday by The Century Foundation, a left-wing think tank.

However, the Democrats appear poised to pass within a few weeks a $ 1.9 trillion bailout package proposed by President Joe Biden last month that would avert another cliff.

Unemployment Cliff

Expand stimulus plan

Biden’s $ 1.9 trillion pandemic aid proposal would expand and improve unemployment benefits. The aid would last until August 29 and include a weekly increase in benefits of $ 400 (up from the current $ 300), according to a proposal released by House Democrats on Monday.

Democrats want to enforce legislation without a Republican vote with a special budget measure called reconciliation.

“We are not facing the tortured stop-and-start negotiations that we were faced with in the fall,” said Stettner. “The Biden government feels it is imperative to achieve this.”

However, some opponents believe that Biden’s stimulus plan could ultimately hurt the US economy by providing an incentive for people to stay unemployed.

“The increase in weekly unemployment benefits sounds compassionate, but perversely, it has been shown to lead to higher unemployment rates,” said Matthew Dickerson, budget analyst with the conservative think tank The Heritage Foundation.

Economic studies found no evidence of such a deterrent effect in the spring and summer when Washington paid workers a weekly unemployment bonus of $ 600, but there were few jobs. According to economists, it is unclear how additional benefits would affect workers in the current economy.

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