NNPA NEWSWIRE — About five million people will lose jobless benefits at the end of December, and millions of others could face evictions from their homes because a federal moratorium that was part of the CARES Act will expire on December 31. More than 21 million people also will have to start repaying student loans after a federal moratorium expires at the end of the month.
By Stacy M. Brown
NNPA Newswire Senior National Correspondent
Before the November election, politics prevented successful negotiations for a new coronavirus stimulus package.
One month later, politics continue to play a central theme in the still failing talks between Democrats and Republicans, with many on Capitol Hill pointing to the all-important Senate runoff elections scheduled to occur in early January that could tip the balance of power in the chamber.
“If both Georgia seats go Democrat, then I think the question then becomes not just how big is this bill, it’s how many additional big bills do we get?” Tom Porcelli, the chief U.S. economist at RBC Capital Markets, recently told Fortune.
“So much really relies on what’s going to happen on January 5.”
On the other hand, if Republicans win one Georgia seat, there could likely be significantly less economic aid, Fortune noted.
After the election, the White House’s $1.9 trillion offer effectively died as Senate Majority Leader Mitch McConnell took the reins for Republicans in the stimulus talks.
The runoffs include Republican Kelly Loeffler against Democrat Raphael Warnock and Republican David Perdue against Democrat Jon Ossoff.
Both races went to a runoff after each candidate failed to garner 50 percent of the vote.
Wins by Warnock and Ossoff would cause a 50-50 Democrat and Republican split in the Senate, but the new Democratic Vice President Kamala Harris would have the tie breaking vote on any legislation.
This week, Republicans led by Mitt Romney of Utah offered a $908 billion stimulus package, far short of the $2 trillion Democrats have proposed in negotiations with the White House, and much cheaper than the $3 trillion Heroes Act passed by the House in May.
Still, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer called the Romney package “the basis for immediate bipartisan, bicameral negotiations.”
McConnell also jumped into the fray, offering a less robust $500 billion package.
While Democrats want aid for states and direct payments to Americans, Romney’s package doesn’t include stimulus checks.
It’s still unclear if McConnell’s deal includes stimulus payments to Americans.
As posturing on a stimulus deal continues, the clock runs out on an earlier CARES Act bill that brought relief to citizens, small businesses, states, and the overall economy.
Economists have noted that as the virus has worsened, the need for a comprehensive stimulus has only hastened.
About five million people will lose jobless benefits at the end of December, and millions of others could face evictions from their homes because a federal moratorium that was part of the CARES Act will expire on December 31.
More than 21 million people also will have to start repaying student loans after a federal moratorium expires at the end of the month.
Further, companies will lose the ability to defer payroll taxes and take deductions for business losses, and more than $150 billion in aid to state and local governments will expire.
“As a person who has taught personal finance to the minority community for the past 13 years, this entire situation frightens me. For instance, I have seen minorities have a 500 or lower credit score due to missing a cell phone payment of $150 or from failing to pay a cable bill of $325,” remarked Jaquetta T. Ragland, the owner of http://www.YoungandFinance.com.
“With unemployment on the rise and no coronavirus relief package, I believe this will set some individuals – especially minorities – back by seven to ten years because that’s how long it will take negative entries to be removed from their credit. Taking this into consideration, for seven to ten years, a lot of minorities will be unable to purchase homes, finance cars, not qualify for certain job opportunities or open utility accounts without a deposit.”
Lindsey Cormack, an assistant professor of Politics at Stevens Institute of Technology and manager of DCinbox, a database of all official Congress to Constituent e-Newsletters, called the failed stimulus negotiations troublesome.
“We know there are COVID-19 health disparities for minorities manifested in higher case rates in some areas, and greater fatality rates in nearly all areas,” Cormack stated.
“But specifically, on the idea of helping minority-owned businesses, the HEROES 2.0 bill invests lenders that have a demonstrated history of loaning capital to minorities and other underserved communities which could go a long way in reducing the crunch on businesses.”