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With Congress Down To The Wire, More Than A Million Californians Are At Risk Of Losing Unemployment Benefits

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Rachel Thorlund, manager at The Den Cafe, walks past a closed table following reimposed restrictions on indoor dining in Orange County due to Covid-19 in Santa Ana on November 17, 2020. (Patrick T. Fallon/AFP via Getty Images)
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Unless last-minute Congressional negotiations to pass a new COVID relief bill succeed, more than 1 million Californians will lose their unemployment benefits at the end of this month.

Lawmakers in Washington, D.C. are currently debating a bipartisan bill that would extend two federal unemployment programs -- Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) -- into mid-April. Created in the spring by the federal CARES Act, both programs are set to expire on Dec. 26.

While policy experts are hopeful that relief will arrive soon, unemployment recipients say the uncertainty is causing profound stress.

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"To be coming to what could be the end of my benefits just feels like the final nail in the coffin," said Koreatown resident Riordan Tenney.

The unemployed nonprofit worker is currently receiving $450 per week through PUA, which is already a big reduction from earlier in the pandemic when his state benefits came with an extra $600 per week in federal payments. Current legislation could re-introduce a $300 weekly federal boost to state benefits, providing more of a financial cushion.

"No matter how frugal you are, life in Los Angeles is exorbitantly expensive," Tenney said. "Even with saving, when you remove the federal money, you're screwed."

UNEMPLOYED L.A. WORKERS APPROACH A FINANCIAL CLIFF

Researchers with the California Policy Lab estimate that based on current enrollment, more than 1 million Californians are at risk of losing benefits.

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"In Los Angeles County alone, we expect over 320,000 individuals to exhaust their unemployment insurance benefits on December 26 if Congress doesn't act," said UCLA economist Till von Wachter, one of the researchers.

But in their new analysis, the researchers found that the proposal to extend benefits could not only save jobs, but also infuse $30 billion into California's economy at a crucial point in the state's recovery.

Because recipients would likely spend those benefits on crucial expenses, the money could add $44.8 billion to the state's GDP and prevent other workers from losing their jobs -- saving an estimated 136,000 positions across the state.

But the uncertainty remains concerning for advocates who say Congress should not have waited until the last minute to figure this out.

Some worry that the state's Employment Development Department (EDD) may need time to update and reprogram its systems in response to any new legislation, which could lead to a temporary lull in payments to people who may be late with rent or getting deeper into debt.

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"My strong suspicion is that it is already too late to have a seamless continuation of benefits," said Matthew Clark, a staff attorney with the Legal Aid Foundation of Los Angeles.

A lot depends on the contents of any final bill. If Congress continues the current programs with only minimal changes, benefits could be distributed faster.

STATE WARNS 3 MILLION ABOUT LOOMING CUT-OFF

EDD officials say the department will alert approximately 3 million Californians that their benefits could end soon -- though many in this group will likely qualify for another extension program called Federal-State Extended Duration (FED-ED).

For some unemployment recipients in California, any new federal action is already too late to prevent hardship. Attorney Kelly McVey with Bet Tzedek's employment rights project said some of her L.A. clients during this pandemic are now living out of their cars or in homeless shelters.

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"It sometimes feels like, as a lawyer, I almost have to be a social worker," McVey said. "A lot of the referrals we're giving out at this time are for social services, because people know that they're going to be facing really hard times."

Daniela Urban, director of the Center for Workers' Rights in Sacramento, said some of the people calling her office still haven't received the benefits they applied for in March and April.

"We've been giving more referrals to food banks and CalFresh than we've ever done before," Urban said. "When unemployment is no longer available, homelessness prevention is the next step."