The End of the CARES Act and What is to be Done
By Ethan Winter and Colin McAuliffe
At the end of July, the expanded unemployment insurance (UI) benefit -- passed as part of the “Coronavirus Aid and Relief Act” (CARES) -- expired. In the month of July, expanded UI provided approximately 30 million unemployed Americans an extra $600 per week. The goal of this policy was to ensure, when combined with existing state benefits that replace between 30 - 40 percent of wages, that in the midst of the coronavirus pandemic, unemployed workers would not lose any wage income -- as research from the Groundwork Collaborative and National Employment Law Project makes clear once you factor in non-wage benefits from jobs, many workers still received less compensation on unemployment than when they were working.
The CARES Act also included a provision that distributed checks of up to $1,200 (plus $500 for each dependent child) to Americans with annual incomes below $99,000. This income threshold was determined using income filings from 2019 and 2018, opening an obvious hole as people’s financial circumstances could have radically changed in the intervening year(s). Nevertheless, these payments represent a natural experiment with a proto-emergency universal basic income -- a policy that economist Claudia Sahm has long advocated for.
With expanded UI and economic relief payments in place, real household income in the United States actually rose in April. Research published in the New York Times also suggests that the growth of poverty in this country was, temporarily at least, halted. These sanguine econometric reversals amidst a grinding pandemic are revealing. The United States possesses the fiscal capacity to materially improve the condition of millions even under the gravest of circumstances. We just choose not to.
In July, Data for Progress launched The CARES Bot (@ExtendCaresUI) to tell the story of the consequences of these two policies, chronicling the effects of the basic economic dignity they provided. We asked those voters who received either a $1,200 payment or who have been unemployed since March, what the effect of the aid has had on their lives. Rather than using some de regurre natural language process to analyze this data set, we allowed each respondent to speak for themselves. We simply published their responses. Each gives us a view into the lives of people trying to cope with an economic and political system that fundamentally does not respect their value as a human being.
Some spent the aid they received on rent, on medicine, on electricity and water Others on groceries as families, homebound, saw their food bills and caring responsibilities rise. Many used it to pay off debt. A few were able to build up some savings. The most fortunate reinvested it in their local economies, gave it to family and friends, or charity.
As Congress continued to debate whether or not they would extend the expanded UI, we started to ask a second question. For those who received either the $1,200 payment or have been on UI since March what would happen to them if they lost the aid they were receiving or didn’t receive more? The responses were grim. Many said they would be evicted, others expressed their fears that they would not be able to purchase groceries -- each response highlighting the precariousness of so many Americans and the depth of this economic crisis.
As part of a survey at the end of July, we asked voters if they’ve gone on unemployment since March. We found that, among all voters, 17 percent have, a staggering and sobering statistic. For those under forty-five, i.e., the generations that have come of age in the long shadow of the Great Recession, the impacts of these twin crises are particularly acute. Thirty-five percent of this age cohort have gone on unemployment, compared to only 10 percent for those over the age of 45.
While the Democratic controlled House of Representatives passed the HEROES Act in May, a bill which would have extended unemployment insurance along with several other measures to combat the coronavirus and provide for those who have been affected by the coronavirus recession. The Republican controlled Senate failed not only to pass this bill but to take even the bare minimum actions necessary to protect public health and sustain the collapsing economy.
As part of the same survey fielded at the end of July, we found that slightly more voters that self-identify as Republicans have gone on unemployment than those voters who self-identify as Democrats. This serves only to underline the ultimate blindness of congressional Republicans to the plight of their own constituents. They've shown again and again an eagerness to face political and economic consequences in exchange for worse material outcomes for their constituents. But even after accounting for the baseline level of depravity of the Republican Party, their refusal to take any meaningful action to control the spread of the coronavirus or to protect poor and working people from economic devastation is hard to understand.
The failure to extend UI benefits can’t be described as anything other than a defeat for those committed to building a more egalitarian and humane world. Democrats in Congress must now devote all their strength to renewing this program.
The expiration of this program means the CARES Bot must change as well. While we will continue to publish responses as to how these two programs changed people’s lives for the better -- these responses hold forth the promise of a more compassionate alternative -- we now want to drive home the consequences of inaction. For those who received either the $1,200 payment or have gone on unemployment since March, we asked what the effect of losing or not receiving more aid has had on them. We will now publish their responses.
In large measure, these responses speak for themselves. We are perched on nothing short of a humanitarian disaster that did not have to happen. The choice before us is a stark one. We must build a better world or we will destroy ourselves.
Ethan Winter (@EthanBWinter) is an analyst at Data for Progress. You can email him at ethan@dataforprogress.org.
Colin McAuliffe (@colinjmcauliffe) is a co-founder of Data for Progress. You can email him at colin@dataforprogress.org
From July 31 through August 1, 2020, Data for Progress conducted a survey of 1,098 likely voters nationally using web-panel respondents. The sample was weighted to be representative of likely voters by age, gender, education, race, and voting history. The survey was conducted in English. The margin of error is +/- 3 percentage points.