Updated: May 11, 2021
At ExtendPUA.org, we are not only advocates and researchers on the front line of the fight for pandemic relief; we are also all unemployed and underemployed workers who are directly affected by this legislation. The passage of the American Rescue Plan is a victory for our movement and it is largely thanks to all of the unemployed and underemployed workers who attended Senate meetings, shared their stories, and tirelessly contacted their legislators. Thank you. We are thrilled that Democrats in Congress passed President Biden’s American Rescue Plan, and we are confident that our allies at the DOL and IRS will issue prompt guidance so that much needed funds are quickly distributed to the struggling American people. We applaud President Biden for addressing this pandemic with necessary urgency and empathy, and we are grateful to all of the legislators, Hill staff, policy specialists, and advocates who worked so diligently to make this happen. It is a massive step forward at a critical time, and we are proud of all of the work that got us here.
Unfortunately, while this legislation is full of vital and important provisions, it still continues to fall short for workers who are unemployed due to this pandemic, many of whom are now approaching their one year unemployment anniversary; a devastating marker. We will continue to advocate for necessary worker provisions and hope President Biden and our allies in Congress will continue to work to address them.
First, some of our victories:
All unemployment programs extended for the next 5 ½ months with $300 FPUC included for the duration. Considering some of the Republican opposition’s attempts to end these programs in July 2021, this extension is a big deal. Due to an urgent push from advocates, the bill was also passed before a lapse from the December bill was felt for many workers. These provisions are not at the level currently needed, but they are certainly better than additional lapses or further cuts.
Partial tax relief for the unemployed. This was a necessary and hard won fight. Tax forgiveness of the first $10,200 of federal unemployment payments will make a significant dent in the tax bills unemployed workers are facing. (Have a question on this? Check The Century Foundation’s Explainer here.)
100% COBRA subsidies from April through September, and expanded access to affordable health coverage through the ACA and Medicare for those who have lost their jobs due to the pandemic. This has been one of ExtendPUA.org’s mission items since July and we are extremely glad to see it finally passed.
More money devoted to rent relief and food assistance measures. We hope to see states get this money out the door more quickly than with previous distributions, and for the states to provide the most robust assistance possible with these funds.
$1400 checks to millions of Americans.
A significant amount of money for families struggling in this crisis. With the Child Tax Credit expansion and full stimulus checks for dependents, families will receive significant money to help them recover from this crisis. On top of that, the expansion of the Earned Income Tax Credit is a great help for low income workers.
Money for state and local governments, which we hope will be used partially to bolster state unemployment systems.
Increases to the PPP and SVOG programs. We are glad that small businesses, live entertainment venues, and eligible independent contractors will receive continued assistance.
Despite these wins, there are still many shortcomings for millions of Americans who have been directly impacted by pandemic joblessness. The unemployment provisions initially set by President Biden and finalized by Congressional Democrats are a backpedal from some of the strong promises made in the HEROES Act and failed Fall negotiations. This bill is an economic down payment, but does not meet the massive needs of unemployed workers. There is still much work to be done. We will continue to push the Biden administration and Congress to invest further.
Some of the important provisions that the American Rescue Plan neglects:
A large direct payment to all unemployed and underemployed workers. While the ARP provides large payments to families in the form of multiple stimulus checks, single workers who have been unemployed for a full year still only receive $1,400 (which they may be forced to immediately deplete because of unemployment taxes). Workers struggled with pathetic state benefits and minimum PUA amounts for five months in the Fall as legislators repeatedly failed to compromise. Every proposal from both parties in this time included a necessary FPUC boost, but now legislators are pretending those five months didn’t happen at all. Unfortunately, workers who went into deep debt during that lapse can’t pretend, and we won’t be gaslit. In a worker survey conducted by ExtendPUA.org in January, we found pandemic debt averaged $10K per household (and was still growing) and would take, on average, five years of steady and “normal” reemployment for workers to repay. See our worker focused retroactivity video and read our proposed solution here.
The FPUC at $600. A $300 FPUC was proposed by Mitch McConnell and loudly rejected by Democrats in the Fall. $300 (or even $400) as Democrats’ current top line for unemployed workers is incredibly disappointing. State unemployment benefits are abysmal and fail to replace wages for many unemployed workers. For 44% of workers we surveyed, state benefits were less than ¼ of their usual income. The $600 was not revolutionary, it was basic math and should be reinstated. The median monthly shortfall per family with a $300 boost is $1,587.
Full tax relief at both the federal and state levels. While partial tax relief is an important win, long term unemployed workers who have collected more than $10,200 in benefits will still see high tax bills. Importantly, this forgiveness is also NOT reflected in all states. In New York, workers are being faced with $2,000 bills in state taxes alone. Unemployment is not an accurate wage replacement figure in any US state, and should not be taxed at all until it is.
Benefits extended to at least October 4th. This was key, not only because all other programs in the bill last through September, but also because Congress is on August recess through September 10th. This means we will likely see unemployment programs lapse once again September 6th, which is, ironically, Labor Day.
There is real disappointment that none of these things were part of the American Rescue Plan. Perhaps workers could survive without retroactive payments if the benefit amount were at $600, or the benefit amount at $400 would be feasible with retroactivity in place. A partial combination of these provisions would have helped, but none of them were enacted.
Additionally, these bills continue to be passed too close to the expiration of unemployment programs. Anyone with an unemployment claim started prior to March 30, 2020 runs out of unemployment weeks before the official expiration dates. When programs aren’t extended until the last minute, these workers see harmful lapses.
This is why we need to rid the system of these arbitrary expiration dates altogether. Additional weeks of PUA, PEUC, and FPUC should tier off in response to recovery triggers, rather than predetermined dates. We explore specific parameters for these triggers in our Save Our Workers proposal.
There are STILL workers who have not seen any unemployment payments at all, either due to ineligibility, system backlogs, or any number of claim complications and bureaucratic hoops. This begs for massive structural UI reform, which must be included in subsequent packages. As part of that reform, we hope to see benefit amounts more accurately reflect wage replacement without arbitrary caps, expanded eligibility for benefits, and, as stated above, automatic stabilizers for boosts and additional weeks. Unemployment programs also must be expanded to workers regardless of immigration status, especially during a pandemic.
Overall, we are celebrating this monumental legislation and the incredible work of so many that it took to get it passed, but we hope no one views this as “Mission Accomplished.” There is still so much work to do.
Stephanie Freed, Executive Director, ExtendPUA.org,
And a Q&A on the unemployment provisions here.