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COVID-19 is threatening the economy. So are McConnell and the GOP

Senate Majority Leader Mitch McConnell (R-KY) speaks to the media after the weekly policy luncheons at the US Capitol on November 10, 2020 in Washington, DC.
Senate Majority Leader Mitch McConnell (R-KY) speaks to the media after the weekly policy luncheons at the US Capitol on November 10, 2020 in Washington, DC.Tasos Katopodis/Getty

Jessica Bun is sobbing.

The single mother of two small children from Lowell just doesn’t know how she’ll get by when her unemployment payments are cut off next month. A personal care attendant, Bun said she stopped working at the start of the coronavirus pandemic after she and her patient agreed it was too risky for them both.

“It will be very difficult for me,” Bun, 34, who emigrated from Cambodia in 2011, said through an interpreter. The pandemic disrupted family day care for her 15-month-old and school for her 8-year-old. She also supports two parents with dementia.

“I was told by my agency that the job market was very slow,” Bun said through her sobs. "I don’t know where to turn because of COVID. I don’t want to worry my parents.”

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Bun is one of more than 630,000 people in Massachusetts — and 13 million nationwide — getting emergency federal jobless benefits that were created as part of the first big coronavirus rescue package approved in March. The two programs — one for gig workers and others who usually don’t qualify for unemployment, the other a 13-week extension of traditional state benefits — are set to run out in the last week of December. Bun is getting $317 a week under the 13-week program after her state money ran out.

And now the federal money will run out as Washington dithers.

Hopes that Congress would extend the jobless payments before year’s end, as part of a second round of stimulus, all but died this week amid the partisan standoff over President Trump’s refusal to accept Joe Biden’s election victory. Republicans and Democrats remained far apart on the size and scope of a rescue bill — punting at the very moment the country needs quick action to avert another economic crisis.

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“People are suffering and the economy is at risk,” said Jason Furman, a Harvard Kennedy School economist who served as chair of the Council of Economic Advisers during Barack Obama’s second term. “The same set of policies can help both — providing assistance to the unemployed and helping the overall economy. Policymakers are already more than three months late and delays are getting increasingly costly.”

The list of pressing pocketbook issues isn’t limited to unemployment assistance. Proposals that have been put on the table include up to $1,200 in direct payments to households, like those that went out earlier this year; another slug of loans or grants for small businesses struggling to stay open; aid for renters and homeowners who can’t make their monthly payments; and money for state and local governments that may be forced to cut jobs and reduce services to close budget deficits caused by the pandemic.

The Democrats’ package would cost about $2.4 trillion, while Senate Majority Leader Mitch McConnell has said $500 billion is as high as his party will go. Trump has expressed willingness to spend far more than Senate Republicans, perhaps as much as $2 trillion, but the White House indicated Thursday that Treasury Secretary Steven Mnuchin would no longer take part in any negotiations.

What’s so infuriating is that Republicans are downplaying not only the severity of the COVID threat to public health but also the danger the pandemic poses to the economy.

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Most national GOP leaders have stood behind Trump’s ludicrous claims, which he repeated this week, that the health crisis would soon be over. And they argue that the economy’s recovery since the shutdown-induced collapse in March and April means that the amount of stimulus spending sought by Democrats isn’t needed.

The economy has indeed rebounded more quickly than many forecasters predicted. But McConnell is ignoring that the summer’s momentum has cooled along with the weather. The intensifying pandemic, with record numbers of cases and hospitalizations, has pushed a growing number of states and cities to put tougher restrictions on restaurants, gyms, and social gatherings. Among the most-troubling economic trends:

  • New claims for jobless benefits, a proxy for layoffs, have dropped steadily and dramatically over the past six months, but are still running at more than three times the level before the coronavirus outbreak.
  • More than 21 million Americans received state or federal unemployment checks for the week ended Oct. 24. That is 10 million more than the number of people estimated to be without a job in the Labor Department’s October survey of households. Put another way, the jobless rate, based on the number of people receiving unemployment checks, is 13 percent, not the official 6.9 percent reported by the Labor Department. The two metrics rarely match up, but the pandemic has exaggerated the discrepancy.
  • Many state unemployment recipients have exhausted their benefits or will do so by the end of the year. Workers unemployed for 27 weeks or more now number 3.6 million, or a third of all people without a job.

“You are seeing people drop farther and farther off benefits,” said Michele Evermore, a senior researcher and policy analyst at the National Employment Law Project.

It’s lucky that Massachusetts is one of about a dozen states that provides up to 13 extra weeks of benefits in periods of high unemployment.

Extended state benefits of $277 a week are what’s allowing Edith Cuello to pay her rent, car insurance, and grocery bills. Cuello, 30, a single mother raising three children in Boston, said she quit her job as a pharmacy technician when she could no longer send her young twins to day care and her older child’s school went to remote learning.

“What I am thinking is that things might get better, so the day care can have a stable schedule and I can go back to work or find another position,” she said.

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But as the pandemic worsens, so do Cuello’s chances of getting her life back to normal.

And until then, she said, “I hope to God they find a solution to extend unemployment.”