Photographer: Graeme Sloan / Bloomberg
Photographer: Graeme Sloan / Bloomberg
President Donald Trump’s decision to hold up the pandemic just before Christmas threatens to create hardship for millions awaiting unemployment benefits and stimulus checks, leaving an already shaky economy.
Trump’s The reluctance to sign a $ 900 billion bipartisan stimulus package that Congress approved Monday, along with its push for a new package, comes just as special pandemic unemployment benefits for as many as 14 million people are ending. The funds were packed in an expense account that would also endanger a government closure if not signed into law, with millions of contractor positions at stake.
According to Michael Englund, chief economist at Action Economics LLC, it can take up to a month for people to receive their money and even later for the securities to flow into the economy.
Beyond the short-term consequences, the lack of immediate direct payments and the lack of special unemployment benefits threaten to exacerbate the economic scars, characterized in particular by a rise in long-term unemployment.
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“There will be a bit of a tweak in the month of December,” Englund said over the phone. “A lot of people are probably expecting the checks to go out in the last week of December.”
Meanwhile, “people are phasing out their savings,” and additional curfews and closures will mainly weigh on the services sector, Englund said.
Even when House Speaker Nancy Pelosi planned to vote on a bill on December 28 to increase the size of the stimulus vouchers to the $ 2,000 Trump demanded, she urged the president to sign the bill that Congress already had. and that provides additional economic assistance, including forgivable loans for small businesses, additional unemployment benefits, support for evicted tenants, and funds for vaccine distribution.
The delay – even if it only lasts a few days – could hardly come at a worse time. Consumer spending and incomes fell more than analysts expected in November, while other data suggests Americans are wind down their savings accounts, including cash from previous distributions.
Trump has a few more days to sign or veto the bill, which has been passed to the point where Congress can override its veto unless dozens of Republicans change their vote to avoid passing the president.
Meanwhile, 803,000 Americans filed for unemployment benefits last week, still nearly quadrupling the pre-pandemic level. Even the red-hot housing market is cooling down as home sales fell last month despite mortgage rates record lows.
Nearly 4 million Americans have been unemployed for more than six months, and research has shown that it is becoming more difficult to find a job and that these people are more likely to accept lower-paid work, limiting their spending and future opportunities.
The delay “makes things worse at a time when people are losing their checks and already living on fumes,” said Diane Swonk, chief economist at Grant Thornton LLP. “This is huge. 14 million people go off a cliff. “
– With the help of Anna Edgerton