On Friday, several key provisions put in place to help American families and businesses weather the coronavirus pandemic are set to expire — even as layoffs from the most severe and abrupt economic downturn since the Great Depression persist.
That includes the sweetened $600 a week in unemployment benefits, protections for renters and homeowners in federally backed properties and forgivable loans for small business owners.
The end of the relief comes as Republicans and Democrats hit an impasse over negotiations for another round of emergency aid. A resurgence in COVID-19 infections across the country — which now has more than 4 million cases — puts added pressure on Congress to pass additional aid.
The two sides have each endorsed their own bill: In May, House Democrats passed the $3.5 trillion HEROES Act, and on Monday, Senate Republicans — delayed for days by party infighting — unveiled the HEALS Act, estimated to cost around $1 trillion.
But the parties remain deeply divided over what to do next.
Take a closer look at some of the CARES Act programs and when they're scheduled to run out:
Extra unemployment benefits:
The supplemental $600 a week in benefits officially expires Friday, meaning that millions of out-of-work Americans will see a significant reduction in their weekly income.
Without the sweetened aid, the typical unemployment check will return to below $400 per week. It will drain roughly $15 billion per week from the economy, according to one estimate from the Century Foundation, raising fears of a "fiscal cliff" that will deal a serious blow to both American families and the economy's gradual turnaround from the pandemic.
Another 1.4 million workers sought jobless aid last week, the Labor Department said Thursday, as the number of claims ticked up for the second straight week. More than 30 million Americans, or roughly one in five workers, are collecting the financial support, according to federal data.
Republicans have proposed cutting the sweetened benefits to $200 per week until states can adopt a more complicated system that would cap the aid at 70 percent of a worker's former salary.
Democrats maintain the $600 a week boost needs to be extended through the end of the year and have made it a key sticking point in negotiations. Although Senate Republicans attempted to pass a stopgap bill Thursday evening to temporarily extend unemployment aid until legislators can negotiate the rest of the package, Senate Minority Leader Chuck Schumer and Speaker of the House Nancy Pelosi have rejected the idea, deriding it as a political stunt.
Last week, an eviction moratorium that protected an estimated 12 million renters in federally backed properties expired.
There are some 110 million Americans living in rental households; up to 23 million renters -- or 20 percent -- are at risk eviction by Sept. 30, according to an analysis by the COVID-19 Eviction Defense Project.
The government extended the protections for single-family properties backed by Fannie Mae or Freddie Mac until Aug. 31 (it had initially been set to expire at the end of June). In 2019, roughly 43 percent of new mortgages were federally backed.
For tenants living in privately backed properties, the eviction bans vary by state. You can check the status here.
Rent and mortgage payments are typically the largest monthly expense for Americans: One in four tenant families pays more than half of its income for rent, a rate that’s even higher in cities like San Francisco and New York, according to Harvard’s Joint Center for Housing Studies.
On Sunday, White House economic adviser Larry Kudlow said the federal government will extend a freeze on evictions in the next relief package.
"We will lengthen the eviction, we will lengthen it,” Kudlow said during an interview on CNN.
With jobless benefits set to expire, 24 million Americans say they have little to no chance of being able to pay next month's rent, according to a survey by the U.S. Census Bureau.
Small business relief
Congress allocated about $670 billion to the Paycheck Protection Program, a program that extended loans of up to $10 million to businesses with fewer than 500 workers.
The purpose of the program was to preserve jobs and keep small businesses afloat during the crisis; if at least 60 percent of the loan went toward maintaining payroll, the federal government would forgive it, essentially transforming it into a grant.
There's an estimated $130 billion left over in the fund, but the program is set to expire on Aug. 8.
Under the GOP's proposal that it rolled out this week, the money would be repurposed for more targeted aid to the hardest-hit small businesses, which would be eligible to apply for a second loan.
The aid would be limited to businesses with no more than 300 employees, down from the original 500-worker limit established in the CARES Act. A portion of the money would be set aside for businesses with fewer than 10 workers.
“We are now beginning to see that as the PPP funds are being exhausted, some companies are having to face once again the potential of having to lay off some of their workers. And so that’s why it is time for a second round of PPP assistance,” Sen. Marco Rubio, the Senate Finance Committee chairman, said Monday.
Forbearance on mortgage payments
Homeowners with federally backed properties were granted a 60-day foreclosure moratorium through May 17, 2020. However, that was extended until "at least" Aug. 31, 2020.
There are roughly 4.2 million Americans in forbearance plans, according to a recent survey published by the Mortgage Bankers Association.
Lawmakers have cautioned that forbearance is not forgiveness: At some point, homeowners will owe the payments they chose to temporarily suspend.
At the end of the forbearance plan, homeowners will be provided with several options to compensate for the missed payments -- but will not be required to pay everything back all at once in what’s known as a “balloon payment,” according to mortgage giant Fannie Mae. Frequently, mortgage lenders will tack on the balance that homeowners did not pay during the forbearance period onto the end of the loan.