Unemployment cliff approaches unless Congress strikes a deal

The biggest cliff comes the day after Christmas, when federally funded programs serving 69,000 people are scheduled to end.

More than 37,000 people, unemployed in March when mandatory closures began to shutter businesses, have already exhausted their benefits.

Some of them may have a job now. But they didn’t stop getting unemployment checks because they found work, they stopped getting them because their benefits – a maximum of nearly 10 months once all the programs are added together – ran out.

There's “no way of knowing" how many are working, North Carolina State University economist Mike Walden said. “But we’re now in a period where the job market is weakening. Beating the pavement to find work is going to be harder now than it was five, six months ago.”

NC backlog falling, but pitfalls remain for those on unemployment

Congress faces a Friday deadline to negotiate something as part of a federal budget bill needed to avert a partial government shutdown. A bill with bipartisan support would extend unemployment benefits by four months and boost benefits by $300 a week, half the increase that was in place for much of 2020.

Both programs provided longer benefits for people who exhausted unemployment options offered by the state, which in North Carolina right now are limited to 12 weeks and typically pay half a person’s salary – capped at $350 a week – while they’re out of work. The PUA program also covered contractors and the self-employed, people not typically eligible for unemployment benefits.

A $50 boost in that state payment, which the North Carolina General Assembly authorized earlier this year, also runs out Dec. 26.

The General Assembly may tinker with the state’s unemployment system after it comes back into session Jan. 13, but consensus has been elusive in that area. Congressional action would be both quicker and, if it comes, larger.

Walden said he’s optimistic congressional leaders will strike a deal this week.

“We’re at a crisis point, and I’d like to think that the Congress is coming close to some resolution because of that,” he said. “We’re hitting the wall on a lot of programs.”