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Two key government programs authorized by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act expire on December 26. One is the Pandemic Unemployment Assistance program, which provides jobless aid to freelance and gig workers. That would deprive 7.3 million workers of urgently needed income, according to a study released Wednesday by The Century Foundation, a progressive think tank.

Another 4.6 million workers face being dropped from Pandemic Emergency Unemployment Compensation (PEUC) benefits, another CARES Act program that provides an additional 13 weeks of jobless aid beyond the typical 26 weeks that states provide, the analysis found.

The extra $600 a week in federal unemployment insurance assistance that workers had been getting under CARES lapsed at the end of July, slashing income for many Americans who lost their jobs during the first months of the coronavirus pandemic.

The financial support from government stimulus programs have been credited with keeping many businesses and households afloat as they coped with the fallout from COVID-19 and nationwide shutdowns. The upcoming benefits cliff may prove to be another shock to households and the economy, said The Century Foundation’s Andrew Stettner, an expert on unemployment.

“People don’t realize that most of the people collecting unemployment benefits now will be cut off on December 26,” Stettner said. “Most people will be going from that $200 to $300 a week to nothing.”

He added, “This is will have a huge impact on families and the economy.”

At the same time, several other pandemic-related programs are due to expire at year-end, which could add to the pressures facing many households. For instance, a moratorium on evictions and a program to provide forbearance on mortgages are also scheduled to expire by the end of 2020.

“Real test”

The end of stimulus programs would provide a “real test” for the economy, according to Oxford Economics senior economist Bob Schwartz. The expiration of unemployment support is coming as COVID-19 surges across the U.S., sparking new restrictions from states and cities.

“With infection rates spiking throughout most of the nation, so too are more restrictions being put in place, setting the stage for the unemployment lines to swell again,” Schwartz wrote in a report. “Unless Congress extends [jobless benefits], a vital source of income for this distressed segment of the population would be extinguished.”

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