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The public health measures needed to manage the coronavirus pandemic have produced a sharp contraction in economic activity and rise in unemployment, the breadth and duration of which remain to be seen. It’s still uncertain how severe the downturn will be and how long workers will have difficulty finding jobs.
Policymakers should tie the duration and size of key relief measures – such as expanded unemployment benefits and fiscal relief to state and local governments – to economic conditions, not an arbitrary calendar date.
None of the significant measures in the CARES Act extend beyond the end of 2020. This is long before the economy will likely have recovered substantially and the labor market will be healthy again. If Congress doesn’t address this issue, there is serious risk that key measures will expire prematurely, making the economic downturn longer and more severe and increasing the hardship facing tens of millions of households.
We’ve learned lessons from the Great Recession and its aftermath: policymakers should link measures such as state fiscal relief, expanded jobless benefits, and increased SNAP benefits to labor market indicators so that they will remain in place as long as they are needed to boost the economy and help families – in other words, so that the measures neither end prematurely nor last too long.
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