JEC: Local Economies Stand to Lose More than $12 Billion Due to Early Cancellation of Enhanced Unemployment Benefits
Debate
Today, the U.S. Congress Joint Economic Committee (JEC)--led by Chairman Don Beyer (D-VA)--released an issue brief finding that the cancellation of the enhanced Unemployment Insurance (UI) provisions included in the CARES Act could cost local economies across the country more than $12 billion.
"The enhanced Unemployment Insurance provided through the CARES Act ensured that tens of millions of Americans were still able to put food on the table, prescriptions in the medicine cabinet, and keep the lights on during one of the worst economic recessions in our nation's history. Many of those Americans still remain deeply uncertain about their economic futures as we still remain more than 8 million jobs short of where we were pre-pandemic," said Chairman Don Beyer. "As outlined in this brief, there is little evidence that enhanced UI is holding back employment. In fact, ending it could cost local economies more than $12 billion. If states proceed with their plans to end these critical programs, they will be ripping the rug out from under millions of Americans and further hindering our economic recovery."
Despite the lack of evidence that the enhanced UI benefits are holding back employment, 24 states have made plans to end the emergency UI provisions in the CARES Act (Federal Pandemic Unemployment Compensation [FPUC], Pandemic Unemployment Assistance [PUA] and Pandemic Emergency Unemployment Compensation [PEUC]) more than seven weeks before the September 6 statutory expiration of the program. Twenty states will end all three programs (FPUC, PUA and PEUC) while four will only end the $300/week, federally-funded boost to unemployment compensation (FPUC). Early cancelation of FPUC alone will impact more than 2.5 million claims on average every week until September 5.
The brief estimates that the premature termination of FPUC alone will take over $755 million every week from UI beneficiaries and their families on average. By ending these programs early, states are refusing billions of already appropriated federal dollars that could be spent in local groceries, restaurants, and retail shops.
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