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- All federal unemployment benefit programs expire in a week, and Congress isn't renewing them.
- Unemployment expert Andrew Stettner says it's a "five-alarm fire."
- "Now we're putting people in harm's way. A lot of people will be harmed by this," he said.
- See more stories on Insider's business page.
Pandemic-era federal unemployment benefits end in exactly a week. The Century Foundation projects that 7.5 million Americans will lose benefits completely – an unprecedented fiscal cliff that will likely drastically impact incomes, spending, and jobless workers' lives.
Andrew Stettner, a senior fellow and jobless policy expert at the left-leaning Century Foundation, tweeted that it was a "five-alarm fire."
"Most people live paycheck-to-paycheck, and starting next week they're not gonna be able to count on a regular source of income. They're going to be put into harm's way," Stettner told Insider.
-Joseph Zeballos-Roig (@josephzeballos) August 30, 2021
Jobless workers have told Insider that the end of benefits is coming too soon, as the Delta variant surges, jeopardizing plans to return to work and school in person. For some, loss of income could also jeopardize their ability to stay in their home. Last week, the Supreme Court struck down a scaled-down eviction moratorium, paving the way for local courts to restart evictions that had been halted.
Now 7.4 million renters are at risk of eviction, according to the Census Bureau, and the People's Policy Project estimated that 20 million jobless Americans will see their incomes slashed as benefits wind down. In both cases, people may find themselves at the mercy of local action.
Washington isn't pursuing an extension, but states could
In a letter from Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh, the Biden administration made it clear that the federal benefits will expire as scheduled in September. However, states can step in to provide benefits and even issue one-time or periodic relief payments for jobless workers getting cut off; so far, with the exception of a fresh round of stimulus checks in California earlier this year, no states have committed to providing additional benefits.
"To adequately address continued claim payments for those not traditionally eligible for unemployment assistance or those facing the completion of available claims weeks, we would need to see further congressional action," a spokesperson for Washington state's governor previously told Insider.
But Congress isn't pursuing a renewal of federal jobless aid. Democrats are largely excluding it from discussions as they start drafting a $3.5 trillion spending plan and Republicans are staunchly opposed. Twenty-six mostly GOP-led states pulled the plug on some jobless benefit programs months before their expiration.
Some key Democratic moderates like Sen. Joe Manchin of West Virginia already came out against it last month, all but torpedoing an extension in a 50-50 Senate. Every Senate Democrat must support the party-line package so it clears the Senate under an arduous procedure called reconciliation.
House progressives like Rep. Alexandria Ocasio-Cortez say they are discussing whether they should push for an extension. But it'd be a long-shot effort given resistance from Democratic centrists and Speaker Nancy Pelosi's focus on assembling a spending plan that can survive wafer-thin Democratic majorities in both chambers.
'A lot of people will be harmed by this'
The benefit cut-off will throw some workers into a precarious situation. Insider previously reported on Amanda Rinehart, a Pennsylvania mom currently receiving federal benefits. Her child is at high risk for COVID, and she will continue to stay at home with him as he starts another year of virtual schooling - which means she won't be able to return to her beloved hospitality job.
"I'm honestly not sure what I'm going to be doing financially moving forward without these benefits from unemployment," Rinehart said.
Some experts have also said it's too early to end unemployment, and research on states that opted out of federal benefits early shows a $2 billion drop in spending. That may become an $8 billion drop in spending come September and October, according to researchers.
"Losing a job is one of the most damaging things that can happen to your financial health and your personal health," Stettner said. "We've avoided some of those damages for the last 18 months. But now we're putting people in harm's way. A lot of people will be harmed by this."
