Millions of Americans are days away from losing unemployment payments, housing assistance and other critical coronavirus aid, as federal relief begins to evaporate amid President Trump’s continued refusal to sign a $900 billion congressional stimulus deal into law.
The economic unraveling is set to take place over several days.
Democratic and Republican lawmakers also sought to use the stimulus deal to plus up some federal safety-net support, enhance vaccine distribution, extend new lifelines to cash-starved businesses and distribute one-time $600 checks to most Americans. They coupled their new aid with a must-pass measure that would fund the government’s operations through September 2021.
With that agreement now in tatters, however, Washington has found itself scrambling in anticipation of a government shutdown on Tuesday — a halt that threatens to undermine the government’s ability to respond to the coronavirus pandemic and the economic crisis it has wrought.
“I don’t know how to describe it other than traumatic,” G. William Hoagland, a senior vice president at the Bipartisan Policy Center, said.
With millions of Americans bracing for sudden, severe financial hardship, Trump spent much of the weekend mounting false attacks against Democrats and tweeting disproved conspiracy theories about the 2020 presidential election. He has held off on signing the stimulus in an attempt to secure larger one-time direct payments to Americans, an idea his own party does not support and moved to block this past week.
The White House did not respond to a request for comment on Sunday as the president decamped to one of his golf courses in Florida.
Here’s what will happen if the bill isn’t signed into law:
Unemployment benefits lapse
The economic blow is likely to land hardest on 14 million people who lost their jobs early in the pandemic and still have not been rehired. They have exhausted their benefits, and they are unlikely to see any more aid until Trump signs the stimulus into law.
The day after Christmas marked the last week for which these workers could have applied to receive their weekly unemployment checks. Some of the workers now at greatest risk participate in the “gig economy,” driving for Uber or delivering for Grubhub, as they stand to lose access to the tranche of jobless aid Congress authorized back in March.
Democratic and Republican lawmakers extended unemployment benefits as part of the $900 billion package they adopted last week. But Trump’s newfound opposition to their bipartisan stimulus deal prevented it from being implemented before Dec. 26. The missed deadline means workers now face at least a week, if not more, during which they will receive no financial help at all.
Even if Trump had signed the $900 billion deal into law, it might have taken some states weeks to implement the payments given the archaic nature of their computer systems. But the president’s approach threatens even greater delays, keeping checks out of the hands of workers who need it most — with no guarantee they’ll ever receive the payments they missed.
“Fourteen million people not getting paid for a week in this economy is not good,” said Michele Evermore, a senior policy analyst for the National Employment Law Project, which advocates for out-of-work Americans. “That’s an immediate hardship.”
A looming eviction crisis
As many as 17 million households are behind on their rent and may face the immediate threat of eviction starting Jan. 1. Out of work — and out of cash — these families have benefited from limited federal eviction protections that are set to expire in four days, further adding to the pressure on the president to act.
“We’re facing the very real possibility of tens of millions of people losing their homes this winter,” Diane Yentel, president of the National Low Income Housing Coalition, said.
The Trump administration issued a moratorium on evictions this fall out of a belief that a homelessness crisis could worsen during the coronavirus pandemic, forcing people into cramped living conditions. Housing experts praised the policy, even though it caused some headaches — allowing landlords, for example, to start legal proceedings against tenants even if they could not yet remove people from their homes.
Once it expires at midnight Dec. 31, there “may be many families who lose their homes immediately,” said Yentel, adding that her organization’s repeated efforts to contact the Trump administration have gone unanswered.
Lawmakers sought to implement an eviction moratorium of their own as part of the $900 billion stimulus that Trump has not yet signed. The package also includes $25 billion to help renters pay back their bills and other costs, including their electricity and water payments, amid growing concerns that Americans are falling far behind on their bills.
Other new programs put on hold
Unless the sprawling stimulus package is signed into law, hundreds of billions of dollars in aid for small businesses, households, schools, transportation services, vaccine distribution, Internet access and more will fall into limbo. Republican and Democratic lawmakers agreed that the $900 billion relief package would not entirely heal the economy. But there was still hope that their targeted aid could help fill the recovery’s lingering gaps during a brutal winter.
It also set aside stimulus checks up to $600, including for adults and children. Initially, Treasury Secretary Steven Mnuchin said millions of Americans could start receiving payments as soon as this week. But that pledge was thwarted Dec. 22, when Trump demanded Congress revisit the bill and raise the level of stimulus checks to $2,000 (Trump has also demanded reductions in money for foreign aid). Trump doubled down over the weekend, though it is wildly unclear what his involvement is in new negotiations or if his insistence on larger payments will derail the entire bill.
Small businesses were supposed to see a lift through $284 billion for first and second forgivable Paycheck Protection Program loans, and $20 billion for targeted grants through the Economic Injury Disaster Loans program. The package provides $15 billion in additional aid for the arts and entertainment industry, including independent movie theaters, entertainment venues, music clubs and cultural institutions.
Billions were tagged for the airline industry, highways, airports, buses and Amtrak, delivering much-needed help to ailing transit systems that have announced massive cuts in staff and service to make ends meet. More than $800 million in relief was specified for public transit in the Washington region in particular.
A costly government shutdown
A government shutdown normally causes great disruption, freezing Washington in place and leaving millions of federal workers without a paycheck. But a lapse in funding this week could prove especially harmful in the midst of a global pandemic that already has taxed federal agencies.
Along with stimulus relief, lawmakers last week had approved a measure that keeps the government running after a spending stopgap expires Monday night. That means a shutdown is set to kick in Tuesday unless Trump signs the bill — or Congress comes up with another solution.
“Not signing the bill also means that the federal government will be closed after Monday, which will idle a large portion of the federal workforce at the time when the pandemic is bearing down hardest on the American economy,” said Ernie Tedeschi, an economist and former Treasury official during the Obama administration.
Lawmakers could try to quickly pass stopgap funding measures on Monday as they have for weeks in an attempt to buy more time. But it’s unclear how long such a temporary solution would last or whether the Senate could even move fast enough to pass it while much of Capitol Hill is away for the holidays.
There is also the open question of whether Trump would sign such a bill into law, as he has often pointed to his demands for larger stimulus checks despite the crucial funding measures in the stalled legislation.