Extensive unemployment benefits that have kept millions of Americans afloat during the pandemic expired on Monday, resulting in a sudden cutoff of assistance to 7.5 million people as the Delta variant rattles the pandemic recovery.
President Biden and his top economic advisers made no objections to the aid’s termination, despite the fact that they have become embroiled in a political battle over the benefits and are now relying on other federal assistance and an autumn hiring surge to keep vulnerable families out of foreclosure and food lines.
Mr. Biden’s $1.9 trillion economic aid package in March included extended and expanded benefits for unemployed workers, such as a $300-per-week federal supplement to state jobless payments, additional weeks of assistance for the long-term unemployed, and the extension of a special program to provide benefits to so-called gig workers, who do not typically qualify for unemployment benefits. Because of the expiration date on Monday, 7.5 million people will lose their benefits completely, and another three million will lose the $300 weekly supplement.
Republicans and small business owners have criticized efforts to extend the aid, claiming that it has slowed the economy’s recovery and exacerbated a labor shortage by discouraging people from looking for work. Liberal Democrats and progressive organizations have pushed for another round of aid, claiming that millions of Americans are still vulnerable and in need of assistance.
Mr. Biden and his advisers have flatly refused to call on Congress to extend the benefits further, reflecting the administration’s prevailing view of the state of the recovery and the president’s desire to focus on gaining support for his broader economic agenda. According to the president’s top economic advisers, the economy is in the process of transitioning from federal assistance to the labor market. They claim that as support for the March stimulus law dwindles, an increasing number of Americans will return to work, drawing paychecks that will power consumer spending in place of government aid.
And Mr. Biden is urging Congress to pass two bills this month that comprise a multi-trillion-dollar agenda aimed at long-term economic growth: a bipartisan infrastructure bill and a larger, partisan spending bill that includes investments in child care, education, carbon reduction, and other areas. This push means there is no political room for another short-term aid bill, which White House officials insist the economy does not require.
According to administration officials, money that continues to flow to Americans as a result of the March law, including new monthly payments to parents, will sustain the social safety net even after the expanded federal jobless assistance expires. Mr. Biden has urged states with high unemployment rates and a willingness to continue aid to unemployed workers to use state relief funds from the March law to assist the long-term unemployed. So far, no state has stated that it intends to do so.
Mr. Biden has faced criticism on the issue from both the left and the right, and he has responded with a balancing act, supporting the benefits as approved by Congress but declining to push for their extension — or to defend them against attacks from state leaders in some states.
Throughout the summer, business lobbyists and Republican lawmakers urged the president to terminate the benefits early, blaming them for the difficulty some businesses were having in hiring workers, particularly in lower-paying industries such as hospitality. Mr. Biden defended the benefits shortly after the backlash began, but urged the Labor Department to ensure that unemployed workers who declined job offers did not lose their benefits.
However, roughly half of the states, nearly all of which are led by Republican governors, took the initiative to cut benefits early. Mr. Biden and his administration did not oppose them, which enraged progressives. By requesting only willing states to fill in for expired assistance, the administration is effectively extending that policy into the fall.