These coronavirus relief benefits expire at the end of July
Momentum waning for next round of stimulus in July: Gasparino
Sources tell FOX Business’ Charlie Gasparino congressional GOP members may want to wait until September for the next round of stimulus as programs targeting small businesses remain untapped.
The massive social safety net that Congress put in place at the end of March with the passage of the $2.2 trillion CARES Act is beginning to unravel.
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By the end of July, a slew of provisions put in place to help American workers 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 an extended filing deadline for taxpayers.
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The end of the relief comes as Republicans and Democrats grapple with another relief package. A recent spike in COVID-19 cases has put added pressure on Congress to pass a fourth round of fiscal aid, although it's still unclear what specific measures may be included in the bill.
The Senate is not scheduled to return from its two-week summer recess until July 20, making it unlikely that a fourth relief package is passed before then.
States increasingly have allowed businesses shuttered by the outbreak to gradually reopen. In June, the economy added a record-shattering 4.8 million jobs and the unemployment rate unexpectedly dropped to 11.1 percent, down from 13.3 percent in May. Still, the latest jobless claims figures from the Labor Department showed that another 1.4 million Americans filed for unemployment benefits last week, pushing the total number of job losses to more than 48 million Americans.
EXTRA $600 IN UNEMPLOYMENT BENEFITS ENDS NEXT MONTH AS MILLIONS OF AMERICANS REMAIN OUT OF WORK
According to recent Federal Reserve projections, unemployment is expected to fall to 9.3 percent at the end of 2020 and drop to 6.5 percent in 2021. The jobless rate is forecast to remain elevated at 5.5 percent in 2022, well above the pre-crisis level of 3.5 percent, a half-century low.
Take a closer look at some of the programs and when they're scheduled to run out:
Extra unemployment benefits:
Officially, the additional $600 a week in benefits is set to expire on July 31. But states will only pay the extra cash through the week ending July 25 or July 26.
"The (Federal Pandemic Unemployment Compensation) $600 can be paid for weeks ending no later than the week ending prior to Friday, July 31, 2020,'' the U.S. Department of Labor said in a statement to USA Today, which first reported the news. "For all states except (New York), that is Saturday, July 25th. New York’s end date is Sunday, July 26th."
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States administer unemployment benefits on a weekly or biweekly basis with a defined end date on Sunday or Saturday. But the CARES Act stipulates the extra cash will end "on or before" July 31, 2020 — a Friday. Because of the unemployment payment schedules of most states, that means the extra cash will end either the prior Saturday (July 25) or Sunday (July 26). The confusion of the language led some states to list July 31 as the end date of the benefits, when it's actually a few days earlier.
Arindrajit Dube, an economics professor at the University of Massachusetts Amherst, urged Congress to reconsider ending the benefits.
"Letting the enhanced UI benefits expire in July will be a terrible idea," Dube wrote in a tweet. "It'll be a major *negative* fiscal shock, and highly targeted to those whose consumption is sensitive to transfers."
Extended deadline for income taxes
In mid-March, the Treasury Department announced it was extending the deadline for filing taxes from April 15 to July 15 — just a little over one week away.
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By extending the deadline, the federal government allowed individuals and businesses to hold onto their cash longer as they deal with the fallout from the outbreak of the virus. The three-month delay injected about $300 billion of liquidity into the economy, according to Treasury Secretary Steven Mnuchin.
Although several advocacy groups have called on the government to further delay the tax deadline, the IRS said last week that it was sticking with the July 15 date.
The CARES Act froze evictions of tenants in federally backed properties for 120 days — or until July 25, 2020. Starting then, landlords can issue a notice to evict. However, they cannot remove individuals living in those properties for at least another 30 days.
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The government extended the protections for single-family properties backed by Fannie Mae or Freddie Mac until Aug. 31. 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.
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.
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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.
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