Cutoff in extra unemployment aid may hurt 2020 battleground states the most

Florida, Pennsylvania and Michigan stand to lose a combined $3B in aid when the benefits expire

Out-of-work Americans in key battleground states may be hurt the most when the extra $600 a week in unemployment benefits expires at the end of July.

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Florida, Pennsylvania and Michigan, which President Trump narrowly won during the 2016 election against Hillary Clinton, stand to lose a combined $3 billion in aid when the sweetened jobless relief runs out in less than two weeks, according to one estimate from the Century Foundation.

The $2.2 trillion CARES Act, passed at the end of March, granted an extra $600 a week to unemployed workers as the nation's economy came to a grinding halt to mitigate the spread of the novel coronavirus. In the span of two months, the unemployment rate surged from a 50-year low to a 90-year high; close to 50 million Americans have filed for aid since mid-March.

EXTRA $600 IN UNEMPLOYMENT BENEFITS ENDS NEXT MONTH AS MILLIONS OF AMERICANS REMAIN OUT OF WORK

Once the aid expires — officially, it ends July 31, but states will only pay the cash through the week ending July 25 or 26 — the typical unemployment check, which varies by state, will return to below $400 per week. That's an income reduction of roughly 60 percent. It will drain $15 billion per week from the economy, the Century Foundation estimated.

Americans in the three swing states will be among the most affected by the cutoff in aid. Together, more than 5 million workers will see their weekly income plummet by $600, the Century Foundation found. Those individuals, some of the most sought-after voters in the country, represent roughly one-fifth of the 25 million Americans receiving jobless aid.

"The Federal Pandemic Unemployment Compensation program has been the largest and most effective economic response to the COVID-19 shutdown," the author of the study, Andrew Stettner, wrote. "Ending it now would pull the rug out from under families struggling to endure this once-in-a-lifetime economic catastrophe and would threaten the national economy’s potential recovery."

WHAT WILL THE NEXT VIRUS RELIEF BILL LOOK LIKE? CONGRESS MULLS STIMULUS CHECKS, BACK-TO-WORK BONUSES

An aggregate of national polls by RealClearPolitics shows presumptive Democratic nominee Joe Biden leading by more than six points in Michigan and Pennsylvania and by more than five points in Florida. He also leads Trump in other pivotal swing states Wisconsin, North Carolina and Arizona.

Although Democrats have pushed for the additional aid to be extended through the end of the year, the Trump administration and Republicans have argued the boosted benefits are actually disincentivizing some Americans from returning to their jobs.

About two-thirds of workers on unemployment are receiving more government aid than what they earned at their old job, according to a paper written by economists at the University of Chicago's Becker Friedman Institute.

"Unemployment is extremely important. And we need to make sure, for those who are not able to recover their jobs, unemployment is adequate," Senate Majority Leader Mitch McConnell told reporters last week. "That is a different issue from whether we ought to pay people a bonus not to go back to work. And so I think that was a mistake. And we're hearing it all over the country that it's made it harder actually to get people back to work."

SECOND STIMULUS CHECK STILL ON THE TABLE DESPITE BETTER-THAN-EXPECTED JOBS REPORT

Treasury Secretary Steven Mnuchin suggested last week the administration may replace the $600 a week in the next stimulus package but would cap benefits so that workers don't receive more money than they did at their previous job.

“You can assume that it will be no more than 100 percent" of a worker's salary, Mnuchin said.

The Trump administration has also floated the possibility of providing a back-to-work bonus for unemployed Americans returning to their jobs. One proposal from Sen. Rob Portman, R-Ohio, would provide $450 weekly to laid-off Americans returning to work in addition to their wages. Another from Rep. Kevin Brady, R-Texas, would give either a one-time lump sum payment of $1,200, or two weekly payments of $600, to recipients of unemployment returning to their jobs.

While the Labor Department's jobs report showed that 4.8 million Americans returned to work in June, a resurgence in COVID-19 outbreaks has put the brakes on the labor market's nascent recovery.

Some states have hit pause on their plans to reopen, while others are reimposing restrictions they had previously lifted, like shuttering restaurants and bars. Workers at Levi's, United and Wells Fargo learned this past week they were - or could be - laid off or furloughed soon.

Plus, a historically high number of Americans are still filing for benefits: Last week, another 1.3 million workers sought unemployment relief. It marked the 16th consecutive week that jobless claims came in above 1 million; before the pandemic, the record high was 695,000 set in 1982.

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