- After the expiration of several COVID-19 relief programs in mid-summer, several other initiatives are also set to end on Dec. 31 unless replaced or extended
- A suite of Federal Reserve programs will also expire at the end of the year but could potentially be extended
- New economic stimulus remains mired in partisan disagreement in Congress
With COVID-19 infections sharply rising and uncertainty over how smoothly a presidential transition will go, the last two months of an already hectic year are shaping up to be an tumultuous time. Another factor that could influence the economy or labor market will come at the end of the year, when several COVID-19 relief programs are set to expire unless action is taken to replace or extend them.
Among the initiatives ending on Dec. 31 are two federal unemployment relief programs. Pandemic Unemployment Assistance provides aid to gig workers, freelancers, self-employed workers, and others who normally wouldn’t be eligible for state benefits. Pandemic Emergency Unemployment Compensation provides 13 additional weeks of unemployment relief to recipients whose state benefits have been exhausted. Currently there are about 13.6 million people receiving benefits through the two programs.
Businesses have until the end of the year to claim tax credits for paid family or sick leave provided to their employees. They have until Jan. 1 to apply for an employee retention credit, a subsidy provided to employers who kept workers on the payroll.
Also set to expire when 2020 comes to an end:
- The Centers for Disease Control’s moratorium on evictions
- Forbearance on student loans
- The ability to make a penalty-free withdrawal of up to $100,000 from a 401(k), IRA, or other retirement account
Some Federal Reserve programs set up to help stabilize the economy during the pandemic will also expire. These include facilities set up to purchase municipal bonds and corporate debt as well as the Main Street Lending Program, which provides loans to small and midsize businesses but has seen little implementation.
The Fed may not decide until December which if any of its programs will be extended. Those opposed to an extension have suggested that this action can’t take place without congressional action, and that any further economic stimulus should come from Congress rather than the Fed. Those in favor of an extension say the programs could help stabilize the economy until a COVID-19 vaccine is widely implemented.
Most COVID-19 relief options expired in mid-summer, and partisan disagreements have prevented a new round of aid from passing Congress. The lack of further relief has been associated with an increase in the number of people falling into poverty or being unemployed for at least six months, and some economists have warned that these factors could also harm landlords and businesses.
Prospects for new stimulus before the end of the year remain uncertain, as control of the Senate hinges on Jan. 5 runoff elections in Georgia and Democratic and Republican digging in on their respective demands for a relief package. Democrats have long favored a larger and more comprehensive bill, while Republicans have called for less spending and targeted aid.
