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Stress rises as extra $600 set to end

WASHINGTON — A major source of income for roughly 30 million unemployed people is set to end, threatening their ability to meet rent and pay bills and potentially undercutting the fragile economic recovery.

In March, Congress approved an extra $600 in weekly unemployment benefits as part of its $2 trillion relief package aimed at offsetting the impact of the coronavirus pandemic. That additional payment expires next week unless it gets renewed.

For Henry Montalvo, who was furloughed from his job as a banquet server and bartender in Phoenix in mid-March, the expiration of the $600 will cut his unemployment benefits by two-thirds. He uses the money to help support his three children and pregnant girlfriend.

“Now that it’s about to end, that grim and uneasy feeling is coming back and really fast,” Montalvo said.

The unemployment insurance program has emerged as a crucial source of support at a time when the jobless rate is at Depression-era levels. In May, unemployment benefits made up 6 percent of all U.S. income, ahead of even Social Security, and up dramatically from February, when it amounted to just 0.1 percent of national income.

“The increase has likely done as much or more to limit widespread hardship like food insecurity, homelessness, utility cutoffs, and mental health challenges, as any provision Congress has enacted in response to the pandemic and recession,” said Indivar Dutta-Gupta, co-executive director of the Georgetown Center on Poverty & Inequality.

Congress enacted the extra payment for just four months, largely on the assumption that the viral outbreak would subside by late July and the economy would be well on the way to recovery. But confirmed case counts are rising in 40 states and 22 states are either reversing or pausing their reopening efforts, threatening to slow rehiring. The number of people seeking weekly jobless aid has leveled off at roughly 1.3 million, after falling steadily in May and early June.

Eliminating the extra payment would cut benefits for most recipients by 50 percent to 75 percent, depending on the size of each state’s unemployment benefit, which varies based on a worker’s prior income. Arizona’s maximum payment of $240 is near the low end, while Massachusetts is among the most generous, with a weekly maximum payment of more than $800.

Other measures intended to shore up business and household finances, such as one-time payments of $1,200 and a small business lending program, have also largely run their course. That could sharpen the impact of the pandemic-induced job losses, which have pushed the unemployment rate to 11.1 percent.

Another government rescue package is in the works and some sort of extended extra benefit is possible. Trump administration officials have expressed support for more aid and Senate Majority Leader Mitch McConnell, R-Ky., has signaled a willingness to compromise.

By Associated Press

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