In a few days, 30 million Americans will lose the $600 boost in unemployment insurance they’ve depended on every week. What happens next?
Annie Lowrey, the Atlantic staff writer and author of Give People Money, joins to explain. Listen here:
What follows is an edited and condensed transcript of their conversation.
Katherine Wells: What is the fiscal cliff?
Annie Lowrey: When Congress passed the CARES Act, it did two really important things with the unemployment-insurance system. This is mostly a state program. When you pay taxes through your employer, you pay a little unemployment-insurance tax and that raises money which then goes into a pool. The state administers those funds. So the states have latitude, though not endless latitude, to set the benefit amount and the number of weeks of unemployment that you can receive. Then there are also rules about who gets unemployment. With the CARES Act, Congress created a special way for gig workers and other workers who normally aren’t covered by the unemployment-insurance program to get UI. And then they also added a really large benefit: $600 a week for recipients. That is a lot of money, especially when you add it in with the normal UI benefit that you’d also be getting. That $600-a-week bump is going to expire [federally on July 31, but in many states, on either July 25 or 26]. Thirty million people will take a huge pay cut and they will mostly drop down to just getting the state benefit amount.