Austin American-Statesman: Texans struggle financially, D.C. grapples politically as federal pandemic relief expires
Life has thrown more than a few curve balls toward Austin resident Bill Tarabula, but he says the coronavirus pandemic is the one that almost struck him out.
What saved him and ultimately gave him the opportunity to find a new job amid the pandemic, Tarabula said, was the $600 in extra benefits he got from the federal government through the CARES Act, which expired July 31.
Negotiations from both sides stalled over multiple issues, including extension of eviction memorandum policies and funding for school re-openings, but the $600 supplemental federal unemployment payment included in the stimulus package passed in March, has emerged as one of the major roadblocks in negotiations.
President Donald Trump has said that he would use his executive powers if a congressional deal on another relief package was not struck by Friday.
"That $600 was the difference between living well and being homeless, essentially," the 66-year-old Tarabula told the American-Statesman.
Like many Texans, he said the benefits from the federal CARES Act, as well as from state unemployment insurance, allowed him to stay afloat during the pandemic. As lawmakers negotiated this week over the next pandemic relief package, he was hoping for the best.
"The federal government has to step up and do something. You know, $600 might not be the right number, but it's going to have to be something up there because people have bills to pay," Tarabula said.
He worked as a parking attendant during events held at the University of Texas. But because he didn't own a car himself at the time, he moved to an area near West Campus to be close to work.
Then Tarabula learned in March that he would no longer be getting work hours because of so many event cancellations amid the pandemic.
But as many other Texans who claimed jobless benefits discovered, Tarabula ran into problems and delays while navigating the Texas Workforce Commission's unemployment system. But the money eventually came in, he said.
And when it did, he was able to put a down payment on a car, which he then used to get a job as a part-time package delivery driver.
Working isn't easy for Tarabula at his age, but he said he is much more optimistic today than a few months ago. Not only does he have money coming in from unemployment as well as his new part-time job, Tarabula said he also gets about $1,000 a month from Social Security.
"It's such a relief, and after this I might not need unemployment anymore. I might be able to do it with this side hustle," Tarabula said.
Texas elected officials chime in
U.S. Rep. Lloyd Doggett, D-Austin, has been helping people in his district, including Tarabula, deal with difficulties they ran into while trying to claim benefits through the state workforce commission.
Doggett, whose district covers parts of Austin, San Marcos and San Antonio, blamed Senate Republicans for the gridlock delaying any new coronavirus legislation.
"We are in this predicament because Senate Republicans deliberately chose to refuse any negotiations on our May 15-approved House bill for over 10 weeks, until after the last emergency unemployment compensation check had already been issued by the Texas Workforce Commission," he said in a written statement.
On the other side of the aisle, U.S. Rep. Michael McCaul, R-Austin, said he is hopeful for a deal.
"These individuals are going without a paycheck through no fault of their own," McCaul said in a written statement. "As negotiations continue on unemployment, I hope both sides can come to agreement that will extend unemployment benefits for those who need it most."
U.S. Sen. John Cornyn, R-Texas, earlier this week said he thinks the Senate should not recess until completing the next stimulus package.
"Congress is not known for acting with speed and dispatch, and at most times that's actually probably a good thing because you make mistakes when you get in a big hurry," Cornyn said on the Senate floor on Monday. "But there's no reason we can't come together and reach an agreement this week and get relief on the way to those who need it most."
In a virtual meeting with the Texas Society of Certified Public Accountants on June 26, Cornyn called the $600 federal jobless benefits a "mistake," and said some people were able to collect more from unemployment than they would make through their regular wages.
MJ Hegar, a Democrat from Williamson County who is challenging Cornyn for his seat, said she believes he was too slow to act in the months leading up to the expiration of the CARES Act benefits.
"Because of Senator Cornyn's failure, millions of Texans hit the first of the month with no idea how to pay their bills and feed their families amid one of the worst economic crises we've seen," Hegar said.
The economist in the room
Austin-based economist Jason Schenker, president of financial market research firm Prestige Economics, said widespread unemployment and a contracting job market could have long-lasting financial consequences.
"These are just really big numbers. I don't mean to be alarmist, but they're just big," Schenker said.
Texas unemployment rates reached above 13% in April and May before dropping to 8.6% in June, according to the Bureau of Labor Statistics.
According to economic data compiled by the Federal Reserve Bank of St. Louis, Texas reported about 76,806 new jobless claims for the week ending July 25. That number has dropped steadily since reaching a peak of 315,167 in the week ending April 4.
By comparison, the period with the highest number of initial jobless claims in 2020 before pandemic-related shutdowns were enacted was the week ending Jan. 11, with 21,902, according to federal reserve data. The average number of initial jobless claims in the first ten weeks of the year was about 14,300.
In the week ending July 25, the federal reserve reported that about 1.19 million people filed initial claims across the country, and more than 16 million people in the country were collecting unemployment benefits.
And while the most recently reported U.S. labor market numbers showed that 1.8 million new jobs were created in July, Schenker said he does not expect the job market to rebound to pre-pandemic levels anytime soon.
Also looming large, Schenker said, is the cost of federal programs in response to the pandemic.
House Democrats passed a version of the stimulus package, also known as the Health and Economic Recovery Omnibus Emergency Solutions, or HEROES Act, estimated to cost around $3.4 trillion dollars. Senate Republicans countered with the Health, Economic Assistance, Liability Protection and Schools, or HEALS Act, which is estimated to cost around $1.1 trillion.
On Friday, CNBC reported that Democratic leaders may be open to cutting the cost of its version of the package by $1 trillion, while Treasury Secretary Steven Mnuchin has opposed increasing the cost of the GOP package by $1 trillion.
Though the cost of massive programs is a major point of concern for Schenker, who said future social programs could be stymied by current spending, he strongly disagreed with the notion that people will not go back to work if they are provided $600 a week in the next stimulus bill.
"I know there is this sort of widespread canard, especially around restaurants, that people aren't going to go back to work because the $600 a week is too high, and that's absurd," he said.
Schenker said he doesn't have the answer for what the federal benefit should be, but said he is confident in his forecast of what would happen if lawmakers fail to come to a consensus.
"If there is one thing that I know is true, it's that politicians, on both sides of the aisle, would all like to be reelected this fall," he said.