Enhanced unemployment benefits included in the $1.9 trillion pandemic-relief package signed yesterday by President Biden could keep billions of dollars a week in stimulus flowing into the economy through the summer, the Wall Street Journal reported. The plan extends two pandemic-related programs and lengthens supplemental $300 payments to all laid-off workers receiving unemployment benefits through early September — well after the effect of $1,400 checks to individuals likely fades. About 20 million people tapped unemployment benefits in mid-February, up from 2 million a year earlier, adding up to more than $10 billion in additional stimulus a week. Some economists say extending extra jobless benefits for nearly 18 months is a disincentive for some people to return to work, preventing industries such as logistics, construction and certain retailers from finding employees as the economy recovers. Other economists say the payments have provided a boost to many lower-income families, who have disproportionately lost jobs in the coronavirus pandemic, while in turn pushing money back into the broader economy. The U.S. had 9.5 million fewer jobs in February than a year earlier, according to the Labor Department. Read more. (Subscription required.)
In related news, White House press secretary Jen Psaki said that direct deposits from the $1.9 trillion COVID-19 relief legislation signed into law by President Joe Biden on Thursday will come as early as this weekend, Reuters reported. With the signing of the stimulus bill, Biden commemorated the one-year anniversary of a U.S. lockdown over the coronavirus pandemic with a measure designed to bring relief to Americans and boost the economy. “People can expect to start seeing direct deposits hit their bank accounts as early as this weekend. This is, of course, just the first wave,” Psaki said. Payments to eligible Americans will continue throughout the course of the next several weeks, she added. Nearly 160 million households are expected to get payments, according to White House estimates. The bill includes an expanded child tax credit of up to $3,000 per child, or $3,600 for each child under age 6. The Internal Revenue Service will pay part of that in monthly installments of $250 or $300 from July through December, adding a benefits distributor role to the revenue collection agency’s responsibilities. Read more.
Additionally, the pandemic relief bill that President Biden signed yesterday afternoon will protect tens of thousands of aviation jobs, providing a lifeline to an industry that is likely to struggle for some time even as vaccinations accelerate, the New York Times reported. After Congress this week approved the legislation, which includes $14 billion for airlines and an additional $9 billion for airports and other businesses, American Airlines and United Airlines told 27,000 employees that they could ignore the furlough notices they had received in recent weeks. The airlines had issued the warnings, which are legally required in advance of sweeping cuts, as they prepared to carry out the furloughs at the end of this month when an earlier round of federal aid expired. The new bill extends that assistance through September. The relief package is the third to provide funding to keep airline workers employed since the pandemic began. Last March, Congress provided passenger airlines $25 billion in loans and another $25 billion in payroll grants. It renewed the payroll funding in December with a further $15 billion and again this week. The Biden relief bill also sets aside $1 billion for aviation contractors and $8 billion for airports to help them operate normally, limit the spread of the virus, and pay workers and service their debts. In exchange for the aid, airports, contractors and airlines are prohibited from large layoffs through September and were forced to make other concessions. Read more.
