The $900 billion COVID-19 relief package Congress approved Monday set up a series of tough deadlines for the incoming Biden administration.
Expanded unemployment benefits are slated to phase out starting in mid-March. Other benefits intended to help businesses and keep people in their homes will expire as soon as Jan. 31.
While the latest COVID-19 relief package is expected to help avert another economic downturn and save millions of people from falling over a financial cliff, it is also coming at one of the hardest moments of the downturn.
The infection rate is soaring, hospitals are reaching capacity, and the death toll from the virus, which has already made 2020 the deadliest year in U.S. history, has reached north of 3,000 a day.
States and cities scrambling to beat back the virus have reintroduced restrictions on dining, gyms and bars, and in some cases reinstituted stay-at-home orders.
The lightning-fast development of a vaccine has put hope on the horizon, but President-elect Joe Biden will have little time to waste if he wants to keep the economy afloat through the dark winter and ensure a robust recovery.
Biden has made clear that he views the latest bill as a “down payment,” and both House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Mitch McConnell (R-Ky.) have acknowledged that more help could be necessary.
But what the relief looks like, when it passes, or whether it passes at all could depend on the outcome of two Senate runoffs in Georgia on Jan. 5, which will determine control of the Senate.
Deep partisan disagreements over economic policy prevented Congress from striking a deal in July, allowing the last round of small-business loans, additional unemployment benefits and an evictions moratorium to expire. President Trump moved to fill some of those safety net holes through executive orders but was limited without legislation.
Congress didn’t pass anything until this week, as part of a gargantuan, year-end spending bill that tied several major pieces of legislation together.
Here are some of the main deadlines Biden will face once in office.
Unemployment benefits: March 14/April 5
The most important deadline Biden faces will likely be when extended, expanded unemployment benefit programs expire in mid-March.
One of the main reasons Congress acted this month was the Dec. 31 expiration of two CARES Act programs, one that made the self-employed and gig economy workers eligible for benefits, and the other that extended the overall time benefits could be received.
Had the bills expired, an estimated 12 million people would have found themselves with no incomes at all.
But the benefits have only been extended for 11 weeks, until March 14, though that deadline only bars new people from signing up. People already on the program can continue receiving benefits for another three weeks, until April 5.
While the economy is expected to improve in the spring as more people are vaccinated, unemployment advocates say levels are still expected to be historically high for months.
Though the “soft cliff” will give people some additional benefits into April, the additional $300 in weekly payments will run out on March 14.
Eviction moratorium: January 31
The latest COVID-19 relief bill extended the Centers for Disease Control and Prevention (CDC) eviction moratorium from Dec. 31 until Jan. 31.
Nearly 13 million Americans say they are having trouble paying rent, and the only thing keeping a roof over many of their heads is the evictions ban, which will expire just 11 days after Biden’s inauguration.
“If Biden doesn’t act quickly, the minute there’s an opportunity we’re going to see a massive wave of filings,” said John Pollock, a staff attorney at the Public Justice Center.
The CDC moratorium was put in place through executive action after the original evictions moratorium included the massive CARES Act signed into law in March expired. The most recent legislation was intended to simply see it through into the Biden administration without lapsing, meaning he could easily renew it without help from Congress.
But Pollock and other housing activists have been critical of the CDC moratorium, saying it requires too much preemptive action on the part of renters, who often are not aware that the protection is available.
Even with the CDC ban, many informal evictions have taken place, and advocates have documented cases of landlords turning off electricity or water to shoo away tenants behind on rent.
The CDC ban itself is facing legal challenges, and a court could potentially put an end to it, which would leave the ball in Congress’s court.
The $25 billion fund Congress approved to help people pay accumulated rental debts could go a long way, but it is only a fraction of the $70 billion in rental debt Moody Analytics estimated will accrue through the crisis.
“Stimulus checks just go out by direct deposit, but rental assistance can’t work like that. It goes to the states, and then to the cities, and then tenants have to apply, and then be processed and paid out,” said Pollock.
Small-business loans: January
Business groups around the country hailed the revival of the Payment Protection Program (PPP) in the new legislation.
The program lets small businesses hit hard by the pandemic apply for loans that the government will completely forgive if 60 percent goes toward payroll and some other basic requirements are met.
When Congress approved the first $349 billion round of PPP, the fund went dry within about two weeks, requiring another injection of funding from Congress. Just over half of the second, more targeted round of $310 billion was spent, leaving $134 billion in the bank when the program expired.
But the latest round of PPP loans only has $284 billion, just over half the total that went out in the first two rounds, raising questions as to how long it will last.
The newer round has more restrictions on what kinds of businesses can apply, targeting smaller companies with larger revenue losses. It allows eligible companies that have already received a PPP loan to apply for a second one.
Stephanie O’Rourk, a partner at accounting firm CohnReznick, says she wouldn’t be surprised if the money ran out by the end of January.
“For the moms and pops of the world, I do believe it’s going to run out as quickly as the first time,” she said.
“This was needed 3 months ago. People were making decisions whether to shut down or remain open based upon this passing,” she added.
Many businesses that were able to turn to their cash reserves early on in the pandemic have now run those down, and winter conditions have added strain on those businesses that turned to outdoor adaptations in the summer and fall.
If the money runs out quickly, there will likely be calls for Congress to act again.
“I do believe that this whole bill is a Band-Aid, maybe through the first quarter. There is going to be, once the Biden administration comes in, the need for another CARES-type Act,” O’Rourk said.
Student loan forbearance: February
The CARES Act put in place a policy of student loan forbearance, allowing borrowers to delay payments without accruing more interest or fees. The Trump administration extended the policy in August, most recently pushing the deadline until February.
While the latest relief bill did not reinstate the policy, Biden will likely continue it through executive actions.
He’s floated the idea of forgiving up to $10,000 of student loan debt through executive action, an idea progressives say can be taken even further.
State and local budgets
Democrats failed to win $160 billion in aid to state and local governments in the latest bill, and have cited it as one of their top priorities moving forward.
While it’s hard to put a specific deadline on action for Congress, many states reconvene their legislatures in January and have to adjust their annual spending based on updated budget conditions, which could lead those facing severe crunches to pull back services and cut more jobs. Already, 1.3 million jobs have been lost from state and local cuts alone, mostly in education.
Most states also are required to approve new, balanced budgets by the end of their fiscal years in June. Without aid, more cuts could be set in motion.
Debt ceiling: July 21
Biden will also face a political challenge in raising the debt ceiling, though it could also serve as an opportunity to get Congress to pass something.
The debt ceiling, which was suspended last summer, is set to be reinstated on July 21. The Treasury can take steps known as “extraordinary measures” to put off the deadline, but without action the government eventually will not be able to pay off its loans, which could set off a global financial crisis.