American Rescue Plan (2021)

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    Biden's Stimulus Is Stoking Inflation, Fed Analysis Suggests

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    Inflation is likely getting a temporary boost from the $1.9 trillion coronavirus relief package that the Biden administration ushered in early this year, new Federal Reserve Bank of San Francisco research released on Monday suggested.The analysis may add fuel to a hot debate in Washington over whether the administration’s policies are contributing to a spike in prices. Critics of the government spending package that was signed into law in March, including former Treasury Secretary Lawrence H. Summers, have said it was poorly targeted and risked overheating the economy. Supporters of the relief program have said it provided critical aid to workers and businesses still struggling through the pandemic.The new paper comes down somewhere in the middle, finding that the spending had some effect on inflation but suggesting that it is most likely to be temporary. The economists estimated that it would add 0.3 percentage points to the core Personal Consumption Expenditures inflation index in 2021 and “a bit more” than 0.2 percentage points in 2022. Core inflation strips out volatile items like food and fuel.While those numbers are significant, they are not what most people would consider “overheating” — the Fed aims for 2 percent inflation on average over time, and a few tenths of a percent here or there are not a reason for much alarm.But the result is only a rough estimate, one the researchers came up with to help inform an continuing political and economic debate.Both the Trump and Biden administrations signed trillions of dollars in virus relief spending into law. The packages included two bipartisan bills in 2020 that pumped more than $3 trillion into the economy, including direct checks to individuals and generous unemployment benefits. Another $1.9 trillion — called the American Rescue Plan — was passed this year by Democrats after they took control of both Congress and the White House.“The later timing and large size of the A.R.P. stirred debate about whether it is causing an overheating of the economy and fueling a sustained increase in inflation,” the San Francisco Fed researchers noted.The economists tried to answer that question by looking at how much spare capacity is in the economy using a labor market measure — the ratio of job openings to unemployment. The logic is that inflation tends to pick up when there is very little labor market slack, because businesses raise wages to attract workers and then raise prices to cover their climbing labor costs.Government stimulus can push up the number of job openings in the economy as it fuels demand while constraining the number of available workers because it gives would-be employees a financial cushion, allowing them to take their time as they search for a new job.Based on the package’s size and using historical evidence on how fiscal spending affects the labor market, the researchers found that the American Rescue Plan might raise the vacancy-to-unemployment ratio close to its historical peak in 1968, fueling some inflation — but that the price impact would be small and short-lived.U.S. Inflation & Supply Chain ProblemsCard 1 of 6Covid’s impact on supply continues. More

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    Vast Expansion in Aid Kept Food Insecurity From Growing Last Year

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    Despite the economic downturn, government figures for 2020 show no overall rise in hunger of the sort typical in past recessions. But some groups still suffered.As 20 million jobs vanished at the start of the coronavirus pandemic and traffic jams formed outside food banks, many experts warned that the twin crises of unemployment and disease would produce soaring rates of hunger.But huge expansions of government aid followed, and data released on Wednesday suggests the extraordinary spending achieved a major goal: Despite shuttered businesses and schools, food insecurity remained unchanged from prepandemic levels. That result defied past experience, when recessions caused food hardship to spike.“This is huge news — it shows you how much of a buffer we had from an expanded safety net,” said Elaine Waxman, who researches hunger at the Urban Institute in Washington. “There was no scenario in March of 2020 where I thought food insecurity would stay flat for the year. The fact that it did is extraordinary.”The government found that 10.5 percent of American households were food insecure, meaning that at some point in the year, they had difficulty providing enough food to all members of the home because of a lack of money. It also found that 3.9 percent experienced “very low food security,” meaning the lack of resources caused them to reduce their food intake. That was statistically unchanged from the previous year.Food insecurity did rise among some groups, including households with children, households with Black Americans and households in the South. The gap between Black and white households, which was already large, widened further, with 21.7 percent of Black households experiencing food insecurity, compared with 7.1 percent of white households. That is a gap of 14.6 percentage points, up from 11.2 points in 2019, before the pandemic struck.Black households suffered disproportionately from job losses and school closings during the pandemic and had fewer assets with which to buffer a crisis.Still, the overall pattern — of hunger constrained — contrasted sharply with the country’s experience during 2008, when nearly 13 million additional Americans became food insecure at the start of the Great Recession. Last year, 38.3 million Americans lacked food security, a level far below the 50.2 million Americans in that situation at the recession’s peak.As President Biden pushes a $3.5 trillion plan to further expand the safety net over Republican opposition, the report on Wednesday from the Agriculture Department provided fodder for both sides. Supporters said it showed the value of increased aid, while critics said the unchanged rates of food hardship showed that further spending was not necessary.The aid expansions reflected in Wednesday’s report occurred early in the pandemic last year. They include the first round of stimulus checks and expanded unemployment benefits, which passed with support from both parties and President Donald J. Trump.Several large rounds of aid followed, most recently in a $1.9 trillion spending package in March that President Biden championed. It included a program of monthly payments to most families with children that Democrats hope to make permanent..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“A lot of us warned that those further expansions were unnecessary and this provides additional support that that was true,” said Angela Rachidi, a hunger expert at the American Enterprise Institute. She said that progressives were pushing a narrative of exaggerated hardship to justify continued spending increases.In an economic crisis, food is often the first expense that a family with money troubles will cut. Unpaid rents risk eviction, but grocery purchases can be incrementally reduced and meals stretched.Though poverty and food insecurity are related, they are not synonymous. The poorer a household is, the more likely it is to experience food insecurity, but most of those suffering from food insecurity are not poor.Among households disclosing their incomes, 34 percent were poor while 32 percent had incomes greater than 185 percent of the poverty line (about $26,000 for a family of four), according to an analysis by Craig Gundersen, an economist at Baylor University.“There are a lot of Americans in precarious situations,” Mr. Gundersen said. “People are working, but one car repair or sick kid can send them into food insecurity.”The remarkable images of food lines at the pandemic’s start cast a spotlight on food hardship, while the large expansion of aid that followed turned the United States into a laboratory for antihunger policy. Among the lessons learned during the pandemic, researchers said the new report supported at least four.As aid rose, food insecurity fell.The relationship between higher spending and lower hardship may sound obvious. But some social problems prove difficult to address through federal aid. Congress has approved about $46 billion in emergency rental relief, but only a small portion has reached families in need.Wednesday’s report added to a growing body of research showing the opposite: that aid has led to quick reductions in food hardship. “This is not an intractable problem,” Mr. Gundersen said.Last year, the Brookings Institution found that a summer program that replaced school meals with electronic benefit cards led to substantial reductions in child hunger.Likewise, researchers at the University of Michigan, analyzing Census Bureau surveys, found the 2021 stimulus checks brought immediate reductions in food hardship. Most recently, a study by researchers at Columbia University found the same pattern after the introduction of the child tax credit in July, but only among households with children — the group eligible for the monthly payments.“We now have definitive evidence that food hardship is responsive to government aid,” said H. Luke Shaefer, a University of Michigan researcher who studied the stimulus checks. “The effect is crystal clear.”While Wednesday’s report was based on data collected in December 2020, Mr. Shaefer said other surveys showed hardship had continued to fall. “We could potentially be at the lowest level of food insecurity ever recorded, because of the government transfers,” he said.Schools play a vital role.Before the pandemic, school meals accounted for as much as 7 percent of economic resources among low-income households, according to one study.Max Whittaker for The New York TimesWhile food insecurity fell overall, it rose among households with children — to 7.6 percent last year, from 6.5 percent in 2019. One likely explanation is the widespread closure of schools, a reminder that they play a large, if often overlooked, role in delivering food aid.Before the pandemic, Judith Bartfeld, a researcher at the University of Wisconsin, found that school meals account for as much as 7 percent of economic resources among low-income households. That financial contribution approached the impact of the Supplemental Nutrition Assistance Program, or SNAP, the main federal antihunger program, which provided more than 10 percent of household resources but is larger and more visible.“One of the big lessons from the pandemic is the critical role that school meals play as part of the nutrition safety net,” Ms. Bartfeld said. “The value of school meals became transparent when the meals disappeared.”School closures may have also increased food hardship indirectly, by making it hard for parents to return to work.Among the pandemic-era programs is one that replaced the value of lost school meals with electronic benefit cards. Research found it reduced food hardship, though many states issued the aid after significant delays. Congress extended the program during the summers of 2020 and 2021, and the Biden administration wants to make the summer electronic benefit program permanent, to combat the rise in hunger that typically comes with the closure of schools.Most states participated in the summer program this year with the significant exception of Florida, where Gov. Ron DeSantis, a Republican, has declined without explanation to seek the $820 million the state could receive in federal aid.The gaps between Black and white Americans are large.The longstanding disparities in food insecurity between Black and white households had been narrowing in recent years. But last year, they widened again. Though the share of white households suffering food insecurity fell by 0.8 percentage points, it rose by 1.6 points in Hispanic households and by 2.6 points in Black households.One reason may be the nature of the recession, which disproportionately hurt Black workers, many of them in low-wage service jobs. It is also possible that Black and Latino families faced greater barriers than whites families in gaining access to government aid.A third potential explanation may be that Black families entered the recession with far fewer assets than white households and less access to credit, both of which can buffer food hardships.“This is the most disturbing part of the story,” said Ms. Waxman, the Urban Institute researcher. “Whatever we did wasn’t enough to support Black families during this period.”Charity plays an important but limited role.The crisis thrust the United States’ unusual network of private food banks into the spotlight. Able to respond more quickly than the government, they played a highly visible role in emergency aid. Feeding America, the national association of food banks, reported a 44 percent increase in meals served.But food banks are often among the first groups to call for expansions of government aid, arguing they can only complement the much larger public programs. Feeding American said SNAP, formerly known as food stamps, provides about nine times as many meals as food banks. The San Antonio Food Bank is among the places where lines stretched for miles in the spring of 2020. It went from feeding 60,000 people a week in early March to 120,000 in late April. It is still feeding about 90,000.But Eric Cooper, who runs the group, said the crisis reinforced both the fragility of the average household and the limited role that private charities can play.“It was the federal expansions that pulled people out of our parking lots and into grocery stores, which is where people should get their food,” he said. “We’re so small — the safety net is much larger.” More

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    800,000 New Yorkers Just Lost Federal Unemployment Benefits

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    Many pandemic-era federal programs expired on Sunday, leaving jobless New Yorkers with more modest state unemployment benefits, or no aid at all.From the beginning of the coronavirus pandemic, New York City has been pummeled economically unlike any other large American city, as a sustained recovery has failed to take root and hundreds of thousands of workers have yet to find full-time jobs.On Sunday, the city, like other communities nationwide, was hit with another blow: The package of pandemic-related federal unemployment benefits, which has kept families afloat for 17 months, expired.In short order, roughly $463 million in weekly unemployment assistance for New York City residents is ending, threatening to upend the city’s fledgling economic rebound and slashing the only source of income for some to pay rent and buy groceries in a city rife with inequality. About 10 percent of the city’s population, or about 800,000 people, will have federal aid eliminated, though many will continue receiving state benefits.The benefits were the sole income for the many self-employed workers and contract employees whose jobs are central to the city’s economy and vibrancy — taxi drivers, artists and hairdressers, among many others — and who do not qualify for regular unemployment benefits. “To just cut people off, it’s ridiculous and it’s unethical and it’s evil,” said Travis Curry, 34, a freelance photographer who will lose all his assistance, about $482 a week. “If we can’t buy food or go to local businesses because we don’t have money to live in New York, how will New York come back?”Federal officials say that more Americans are ready to return to work, and Republican lawmakers and small business owners have blamed the benefits for discouraging people from working at a time when there are a record number of job openings.In recent weeks, President Biden has said that states like New York with high unemployment rates could turn to leftover federal pandemic aid to extend benefits after his administration decided not to ask Congress to authorize an extension. In New York, Gov. Kathy Hochul, a Democrat who last week signed a new moratorium on evictions after the Supreme Court ended federal protections, said the state could not afford to extend the benefits on its own and would need the federal government to provide additional money. A spokesman for Mayor Bill de Blasio did not respond to requests for comment.Gov. Kathy Hochul said the state could not afford to keep financing unemployment assistance without additional federal aid.Stephanie Keith for The New York TimesThe expiring of unemployment benefits ends a period of extraordinary federal intervention to prop up the economy over the past year and a half as the virus has ravaged the country, claiming the lives of 649,000 people and leaving millions of laid-off workers struggling to secure new jobs. .css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The federal programs supplemented standard and far more modest state unemployment benefits. New York City was the first major city in the United States to be hit hard by the pandemic, decimating industries almost overnight that underpinned the city’s economy, from tourism to hospitality to office buildings. Economists have projected that New York City may not fully regain all its pandemic job losses until 2024.The federal assistance provided new streams of financial aid beyond regular unemployment payments, which are distributed by states. Jobless Americans received a $600 per week supplement, which was later reduced under Mr. Biden to $300 per week. Unemployment benefits were also offered to contract workers and the self-employed, who under normal circumstances do not qualify for assistance. Payments were extended beyond the 26 weeks offered by most states.The end of the $300 federal supplement means those who still qualify for regular benefits through New York State will lose about half of their weekly assistance.Since the jobless programs rolled out in April 2020, New York City residents have collected about $53.5 billion in unemployment aid, primarily among lower-paid workers in the service, hospitality and arts industries, according to a recent report by the economist James Parrott of the New School’s Center for New York City Affairs. The recipients also tended to be people of color, who have borne the brunt of the pandemic’s economic and health toll. That includes Ericka Tircio, who lost her job cleaning a 40-story office building in Manhattan’s Financial District in March 2020 and contracted the disease around the same time. She has collected assistance since then, but it will be reduced by about $300 per week. Ms. Tircio, an immigrant from Ecuador who has a 6-year-old son, said her company told her recently that she might be asked to return to work in the coming months.“I’m praying to God that they call me back,” Ms. Tircio, who speaks Spanish, said through a translator. “There are moments when I’ve waited so long that I feel myself falling into a depression.”Ms. Tircio is a member of 32BJ SEIU, a local chapter of the Service Employees International Union, whose president, Kyle Bragg, said thousands of its members had been laid off during the pandemic.“Workers should not be left behind to fend for themselves during the worst crisis in a century,” Mr. Bragg said.In recent months, about half the states elected to end their pandemic-related benefits long before the expiration this weekend, a deadline set by the federal government when a vigorous recovery appeared to be on the horizon. In states led by Republican governors, elected officials said that the assistance stymied economic growth and resulted in labor shortages; however, the job growth in those states has not been substantially different than in states that kept the programs.In New York, business leaders have advocated for the state to end the pandemic unemployment benefits, arguing that they hurt small businesses struggling to hire workers. Thomas Grech, president of the Queens Chamber of Commerce, said several job fairs he hosted over the summer were poorly attended.“People were disincentivized to go to work,” Mr. Grech said. “They’re making more money sitting at home. It’s a classic case of good intentions gone bad.”Mr. Grech said that raising wages as a way to lure workers, as some labor economists and advocates have recommended, was unrealistic for some restaurants “unless you want to spend $30 or $40 for a burger.”Elected officials in New York have argued that unemployment benefits helped pump money directly into the economy.“People who receive emergency unemployment assistance are going to turn around and spend that money, and that money is helpful to other people who are also struggling to get things back to normal,” said State Senator Brian Kavanagh, a Democrat who represents Lower Manhattan.The expiration of the benefits was supposed to coincide with a grand reopening of sorts for New York, as many companies announced during an early summer dip in virus cases that workers would be called back to the office in September. But the Delta variant has fueled a resurgence of the virus, postponing any hope that Manhattan’s office buildings would soon refill. Months of moderate job gains stalled over the summer and the city’s unemployment rate, 10.2 percent, increased slightly in July and is nearly double the national average.Bill Wilkins, who oversees economic development for the Local Development Corporation of East New York in Brooklyn, said unemployment and other benefits helped sustain his neighborhood, which has long suffered from high joblessness. But as the pandemic recedes from its peak, he said it was also “incumbent for individuals to be more self-reliant.”The pandemic exposed the significant skills gap in New York City, he said, resulting in large numbers of unemployed workers who do not qualify for job openings that require a college degree, such as high-paying jobs in the tech sector.“If you want a job right now, you have a job,” Mr. Wilkins said, referring to lower-paying openings at many mom-and-pop shops. “The problem is, is that job a sustainable wage? You want the higher-paying jobs, but you have to have the requisite skills that demand that type of salary.”Alex Weisman, an actor, registered for unemployment benefits for the first time after the pandemic shut down Broadway, where he had been in the ensemble for “Harry Potter and the Cursed Child.” The checks, which ranged from about $800 to $1,100 a week, allowed him to keep paying rent for his apartment in the Hamilton Heights neighborhood of Manhattan.When the pandemic shut down Broadway, including “Harry Potter and the Cursed Child,” it left Alex Weisman, an actor in the show’s ensemble, jobless and reliant on supplemental federal unemployment assistance.Erin Schaff/The New York TimesMr. Weisman, 34, submits audition videos every week, hoping for steady work. Earlier this year, he booked a television job for five weeks, which allowed him to briefly go off unemployment benefits.As his benefits run out, he is considering connecting with a temp agency to find work. The last time he had a job outside acting was as a barista in 2013.“I’m going to have to get an entry-level position somewhere,” Mr. Weisman said. “Because I succeeded in the thing that I trained in and wanted to do, I have absolutely nothing to offer any other industry. It’s scary.”Mohammad Kashem, who worked for nearly two decades as a taxi driver, had similar difficulties switching industries. Before the pandemic, a bank had seized his taxi medallion after he struggled to repay his loans amid a sharp drop in yellow cab ridership. Mr. Kashem, an immigrant from Bangladesh who lives in Brooklyn, worked as a postal carrier during the pandemic but quit after one month, saying he was unaccustomed to delivering mail through rain and snow. His family has been relying on $700 a week in unemployment benefits. He and his wife could not maintain jobs during the pandemic because of health issues, he said, noting that they both contracted the coronavirus and have high blood pressure and diabetes.When the unemployment benefits expire, his wife may try finding a job as a babysitter. Mr. Kashem, 50, has been wracked with anxiety about how he will pay for rent and school supplies for his three children.“I was driving taxi many, many years,” Mr. Kashem said. “I’m not used to another job.” More

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    Unemployment Benefits Expire for Millions Without Pushback From Biden

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    The president has encouraged some states to continue helping the long-term unemployed, but administration officials said it was time for enhanced federal aid to end.WASHINGTON — Expanded unemployment benefits that have kept millions of Americans afloat during the pandemic expired on Monday, setting up an abrupt cutoff of assistance to 7.5 million people as the Delta variant rattles the pandemic recovery.The end of the aid came without objection from President Biden and his top economic advisers, who have become caught in a political fight over the benefits and are now banking on other federal help and an autumn pickup in hiring to keep vulnerable families from foreclosure and food lines.The $1.9 trillion economic aid package Mr. Biden signed in March included extended and expanded benefits for unemployed workers, like a $300-per-week federal supplement to state jobless payments, additional weeks of assistance for the long-term unemployed and the extension of a special program to provide benefits to so-called gig workers who traditionally do not qualify for unemployment benefits. The expiration date reached on Monday means that 7.5 million people will lose their benefits entirely and another three million will lose the $300 weekly supplement.Republicans and small business owners have assailed efforts to extend the aid, contending that it has held back the economic recovery and fueled a labor shortage by discouraging people from looking for work. Liberal Democrats and progressive groups have pushed for another round of aid, saying millions of Americans remain vulnerable and in need of help.Mr. Biden and his advisers have pointedly refused to call on Congress to extend the benefits further, a decision that reflects the prevailing view of the state of the recovery inside the administration and the president’s desire to focus on winning support for his broader economic agenda.The president’s most senior economic advisers say the economy is in the process of completing a hand off between federal assistance and the labor market. As support from the March stimulus law wanes, they say, more and more Americans are set to return to work, drawing paychecks that will power consumer spending in the place of government aid.And Mr. Biden is pushing Congress this month to pass two measures that constitute a multi-trillion-dollar agenda focused on longer-run economic growth: a bipartisan infrastructure bill and a larger, partisan spending bill with investments in child care, education, carbon reduction and more. That push leaves no political oxygen for an additional short-term aid bill, which White House officials insist the economy does not need.President Biden and his advisers have pointedly refused to call on Congress to extend the benefits further.Oliver Contreras for The New York TimesAdministration officials say money that continues to flow to Americans from the March law, including new monthly payments to parents, will continue to sustain the social safety net even as the expanded federal jobless aid expires. Mr. Biden has called on certain states — those with high unemployment rates and a willingness to continue aid to jobless workers — to use state relief funds from the March law to help the long-term unemployed. So far, no state has said it plans to do so.On Sunday, Mr. Biden’s chief of staff, Ron Klain, told CNN’s “State of the Union” that the March law was also allowing states to help those out of work by offering employment bonuses and job training and counseling..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“We think the jobs are there,” Mr. Klain said, “and we think the states have the resources they need to move people from unemployment to employment.”Mr. Biden has faced criticism from the left and the right on the issue, and he has responded with a balancing act, supporting the benefits as approved by Congress but declining to push to extend them — or to defend them against attacks by leaders in some states.Throughout the summer, business lobbyists and Republican lawmakers called on the president to cut off the benefits early, blaming them for the difficulties some businesses were facing in hiring workers, particularly in lower-paying industries like hospitality. Soon after the backlash began, Mr. Biden defended the benefits but called on the Labor Department to ensure that unemployed workers who declined job offers would lose their aid.But roughly half of the states, nearly all of them led by Republican governors, moved to cut off benefits early on their own. Mr. Biden and his administration did not fight them, angering progressives. The administration is essentially extending that policy into the fall, by calling on only willing states to fill in for expired assistance.“I don’t think we necessarily need a blanket policy for unemployment benefits at this point around the country,” Labor Secretary Martin J. Walsh said in an interview on Friday, “because states are in different places.”Privately, some administration officials have expressed openness to the idea that economic research will eventually show that the benefits had some sort of chilling effect on workers’ decision to take jobs. Critics of the extra unemployment benefits have argued that they are discouraging people from returning to work at a time when there are a record number of job openings and many businesses are struggling to hire.Evidence so far suggests the programs are playing at most a limited role in keeping people out of the work force. States that ended the benefits early, for example, have seen little if any pickup in hiring relative to the rest of the country.Even in the industries that have had the hardest time finding workers, many people don’t expect a sudden surge in job applications once the benefits expire. Other factors — child care challenges, fear of the virus, accumulated savings from previous waves of federal assistance and a broader rethinking of work preferences in the wake of the pandemic — are also playing a role in keeping people out of work.“I think it’s a piece of the puzzle but I don’t think it’s the big piece,” said Ben Fileccia, the director of operations and strategy for the Pennsylvania Restaurant & Lodging Association. “It’s easy to point to, but I don’t think it’s the true reason.”Progressives in and outside of Congress have grown frustrated with the administration’s approach to the benefits, warning it could backfire economically. Job growth slowed in August as the Delta variant spread across the country.“Millions of jobless workers are going to suffer when benefits expire on Monday, and it didn’t need to be this way,” Senator Ron Wyden, Democrat of Oregon and the chairman of the Finance Committee, said in a news release last week. “It’s clear from the economic and health conditions on the ground that we shouldn’t be cutting off benefits now.”Elizabeth Ananat, a Barnard College economist who has been studying the impact of the pandemic on low-wage workers, said that cutting off benefits now, when the Delta variant has threatened to set back the recovery, was a threat to both workers and the broader economy.“We’ve got this fragile economic recovery and now we’re going to cut income from people who need it, and we are pulling back dollars out of an economy that is still pretty unsteady,” she said.Even in the industries that have had the hardest time finding workers, many people don’t expect a sudden surge in job applications once the benefits expire.Spencer Platt/Getty ImagesMs. Ananat has been tracking a group of about 1,000 low-income parents in Philadelphia, all of whom were working before the pandemic. More than half lost their jobs early in the pandemic last year. By this summer, 72 percent were working, reflecting the strong rebound in the economy as a whole. But that still left 28 percent of the group who were unemployed, either because they could not find work or because of child care or other responsibilities.“We’re going into a new school year where there’s going to be a lot more uncertainty than there was this spring for parents,” Ms. Ananat said. “Employers are again going to be dealing with a situation where they have people who want to work, but what the heck are they supposed to do when their kid gets sent home to quarantine?”Measures of hunger and other hardship have fallen this year, as the job market has improved and federal aid, including the expanded child tax credit, has reached more low-income families. But the cutoff in benefits could change that, Ms. Ananat said. “In the absence of some kind of solution, this cliff comes and that number is going to go back up,” she said. “This is a significant group of people who are going to be in a lot worse shape.” More

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    From Cradle to Grave, Democrats Move to Expand Social Safety Net

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    The $3.5 trillion social policy bill that lawmakers begin drafting this week would touch virtually every American, at every point in life, from conception to old age.WASHINGTON — When congressional committees meet this week to begin formally drafting Democrats’ ambitious social policy plan, they will be undertaking the most significant expansion of the nation’s safety net since the war on poverty in the 1960s, devising legislation that would touch virtually every American’s life, from conception to aged infirmity.Passage of the bill, which could spend as much as $3.5 trillion over the next decade, is anything but certain. President Biden, who has staked much of his domestic legacy on the measure’s enactment, will need the vote of every single Democrat in the Senate, and virtually every one in the House, to secure it. And with two Democratic senators, Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, saying they would not accept such a costly plan, it will challenge Democratic unity like nothing has since the Affordable Care Act.That is largely because the proposed legislation would be so transformative — a cradle-to-grave reweaving of a social safety net frayed by decades of expanding income inequality, stagnating wealth and depleted governmental resources, capped by the worst public health crisis in a century.The pandemic loosened the reins on federal spending, prompting members of both parties to support showering the economy with aid. It also uncorked decades-old policy desires — like expanding Medicare coverage or paid family and medical leave — that Democrats contend have proved to be necessities as the country has lived through the coronavirus crisis.“Polls have shown for a very long time that these issues to support American families were important, and were popular, but all of a sudden they became not a ‘nice to have’ but a ‘must have,’” said Heather Boushey, a member of Mr. Biden’s Council of Economic Advisers who has been developing such policies for decades.Democrats say they will finance their spending with proposed tax increases on corporations — which has already incited a multifaceted, big-budget effort by business groups working to kill the idea — and by possibly taxing wealth in ways that the United States has never tried before.“We’re talking about free or affordable child care where no one pays more than 7 percent of their income; we’re talking about universal pre-K programs with two years of formal instruction; we’re talking about two years of postsecondary education,” said Representative Jamaal Bowman of New York, a former teacher and principal who is vice chairman of the House Education and Labor Committee. “This is how you build a strong nation.”To Republicans, who are readying a counteroffensive, the Democratic plans are nothing short of socialism. They say they are concerned that the plan is financially unsustainable and would undermine economic growth, by rendering Americans too dependent on the government for their basic needs.“What are Democrats trying to do to this country?” Representative Bruce Westerman, Republican of Arkansas, asked on Thursday, as the House Natural Resources Committee began drafting its portion of the sprawling bill.Senator Joe Manchin III of West Virginia said he could not support the bill at its current size. Stefani Reynolds for The New York TimesTo grasp the intended measure’s scope, consider a life, from conception to death. Democrats intend to fund paid family and medical leave to allow a parent to take some time off during pregnancy and after a child’s birth.When that parent is ready to return to work, expanded funding for child care would kick in to help cover day care costs. When that child turns 3, another part of the bill, universal prekindergarten, would ensure public education can begin at an earlier age, regardless of where that child lives.Most families with children would continue to receive federal income supplements each month in the form of an expanded child tax credit that was created temporarily by Mr. Biden’s pandemic-rescue law and would be extended by the new social policy bill. School nutrition programs, expanded on an emergency basis during the pandemic, would continue to offer more children free and reduced-price meals long after the coronavirus retreats.And at high school graduation, most students would be guaranteed two years of higher education through expanded federal financial aid, geared toward community colleges.Even after that, income supplements and generous work force training programs — including specific efforts to train home health and elder-care workers — would keep the government present in many adult lives. In old age, people would be helped by tax credits to offset the cost of elder care and by an expansion of Medicare to cover dental, hearing and vision services.“Many of us feel that this is the biggest opportunity we will have in our careers to do something deeply structural and transformational to our economy,” Representative Donald S. Beyer Jr., Democrat of Virginia, said, “and we should not miss it.”To critics, the legislation represents a fundamental upending of American-style governance and a shift toward social democracy. With it, they worry, would come European-style endemic unemployment and depressed economic dynamism.“There’s always been difference of opinion on the role of government in people’s lives, and the United States has long taken a different approach than Western Europe,” said N. Gregory Mankiw, a Harvard economist who was chairman of President George W. Bush’s Council of Economic Advisers. “This is clearly designed to take a big step toward the Western European model.”Defenders shrug off such concerns. Representative Robert C. Scott of Virginia, chairman of the House Education and Labor Committee, said the legislation would promote economic growth, with child care subsidies that would get parents back into the work force, education spending to more equitably prepare all Americans to work, and job training to improve labor mobility.“We are making the American economy more dynamic and more globally competitive,” he said.Besides, in the longstanding struggle to balance economic growth against equality and equity, Democrats are ready to shift toward the latter.“The route we’ve taken has led to the concentration of wealth in the hands of a very few people while the rest have just struggled to survive,” Mr. Bowman said. “It’s time to try something else.”“This is how you build a strong nation,” said Representative Jamaal Bowman, a former teacher and principal who is vice chairman of the House Education and Labor Committee.Desiree Rios for The New York TimesIn a mechanical sense, the legislation is not as much of a sea change as the creation of Medicare and Medicaid in the 1960s, or Social Security in the 1930s. Even the Affordable Care Act of 2010 created an entirely new government infrastructure, a federally operated or regulated exchange where Americans could buy private health insurance that has to conform to government strictures on coverage and cost, noted Michael R. Strain, an economist at the conservative American Enterprise Institute.In contrast, the new legislation would largely augment existing programs. Childcare support would come through the Community Development Block Grant to states, cities and counties. Universal pre-K would be secured through block grants and expanded funding to Head Start. Two years of higher education are supposed to become accessible through more generous Pell grants and other existing financial aid programsBut if it passes, Mr. Strain said the legislation could fundamentally change the relationship between the state and its citizens: “Its ambition is in its size.”Most Americans traditionally have seen the federal government’s involvement in their finances once a year, at tax time, when they claim a child credit, get a write-off for the truck they may have bought for their business, or receive a check for an earned income credit, to name a few.That would change profoundly if the social policy bill were enacted. The expanded child tax credit has begun to provide monthly checks of up to $300 per child to millions of families, but is slated to expire in 2022. Its extension for as long as a decade could make it a fixture of life that would be very difficult for future Congresses to take away. The same goes for the Child and Dependent Care Credit, which now offers up to $8,000 in child care expenses but also expires in a year.And the federal government, not private employers, would pay most of the salaries of people qualifying for family and medical leave.“If we get this passed, a decade from now, people are going to see many more touch points of government supporting them and their families,” Ms. Boushey said.One major difference between the social economy that Mr. Biden and congressional Democrats hope to create and the welfare state in Europe is how it would be paid for. Most European countries ask their citizens broadly to fund their social welfare programs, largely through a value added tax, a sales tax levied at each stage of a consumer good’s production.At the president’s insistence, the House and Senate tax-writing committees are to finance the bill’s spending with taxes on corporations and individuals with incomes over $400,000 a year.To that end, the Senate Finance Committee is considering groundbreaking ways to tax wealth, including changing how estates are taxed so that heirs must pay more taxes on inherited assets. The committee is also looking at taxing the accumulated wealth of billionaires — things like homes, boats, stocks and other assets, regardless of whether they are sold — a new frontier of tax policy that would be difficult to achieve. Senator Ron Wyden of Oregon, the Finance Committee chairman, said such measures are the only way to ensure that the superrich must pay their fair share of taxes each year. “I’m going to bring the caucus into that discussion, but I believe billionaires ought to pay taxes every year, just like nurses and firefighters do” out of each paycheck, Mr. Wyden said. More

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    Unemployment Benefits to Millions Are About to End

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    The abrupt loss of pandemic unemployment benefits on a broad scale could have long-term effects not only for the recipients but also for the economy.PHILADELPHIA — Tara Harrison has a master’s degree, yet is applying for the low-paying receptionist jobs she last held as a teenager. Evan Ocheret is considering giving up his career in music. Amanda McCarty is worried about losing her place in the middle class. Amanda Rinehart is considering borrowing money from her grandmother or selling blood plasma to feed herself and her son.Unemployment benefits have helped stave off financial ruin for millions of laid-off workers over the last year and a half. After this week, that lifeline will snap: An estimated 7.5 million people will lose their benefits when federally funded emergency unemployment programs end. Millions more will see their checks cut by $300 a week.The cutoff is the latest and arguably the largest of the benefit “cliffs” that jobless workers have faced during the pandemic. Last summer, the government ended a $600 weekly supplement that workers received early in the crisis, but other programs remained in place. In December, benefits briefly lapsed for millions of workers, but Congress quickly restored them.This time, no similar rescue appears likely. President Biden has encouraged states with high unemployment rates to use existing federal funds to extend benefits, but few appear likely to do so. And administration officials have said repeatedly that they will not seek a congressional extension of the benefits.The politics of this cliff are different in part because it affects primarily Democratic-leaning states. Roughly half of states, nearly all of them with Republican governors, have already ended some or all of the federal benefits on the grounds that they were discouraging people from returning to work. So far, there is little evidence they were right: States that cut off benefits have experienced job growth this summer that was little different from that in states that retained the programs.In the states that kept the benefits, the cutoff will mean the loss of billions of dollars a week in aid when the pandemic is resurgent and the economic recovery is showing signs of fragility. And for workers and their families, it will mean losing their only source of income as other pandemic programs, such as the federal eviction moratorium, are ending. Even under the most optimistic forecasts, it will take months for everyone losing aid to find a job, with potentially long-term consequences for both workers and the economy.“I have no idea what I’m going to do once these benefits stop,” Ms. Rinehart said.When the pandemic began, Ms. Rinehart, 33, was an assistant general manager at a hotel in Allentown, Pa. She held on to her job at first, taking her young son with her to work. But when that proved untenable, she left the job, and has been unemployed ever since, most recently living on about $560 a week in benefits, all of which will end this weekend.A single mother, Ms. Rinehart has been unwilling to send her son, now 8, back to the classroom because he has asthma and several other health conditions that make him especially vulnerable to the coronavirus. He is too young to be vaccinated and too young to be left alone, and she has been unable to find a job that would let her work from home.“They should not cut these benefits off until there is a vaccine for all the little humans of all ages, because there are parents like me that have children that are high risk for Covid,” she said.Ms. Rinehart is one of nearly half a million Pennsylvanians who will lose their benefits this weekend, according to estimates from the Century Foundation, a progressive research institute. The state has an unemployment rate of 6.6 percent, well above the national rate of 5.4 percent.Pennsylvania, like the country as a whole, has experienced a significant economic rebound, but a partial one: Domestic tourists this summer again lined up to see Independence Hall and the Liberty Bell, and thrill-seekers again rode the roller coasters at Hersheypark. But many downtown offices in Philadelphia and Pittsburgh remain all but empty, and conventioneers have not yet returned to conference hotels, or to the restaurants and bars that relied on their business. Overall, Pennsylvania has regained about two-thirds of the jobs lost in the pandemic, compared with about three-quarters nationally.“There’s been a partial recovery in a lot of the industries that are shut down, but it’s not back to where it was,” said Barney Oursler, director of the Mon Valley Unemployed Committee, a workers’ rights group in Pittsburgh. The committee was formed in the 1980s in response to layoffs in the steel industry; it has had a second life in the pandemic, helping thousands of Pennsylvanians navigate the state’s unemployment system.Mr. Ocheret, 32, is a professional oboist in Philadelphia. Before the pandemic, he cobbled together a living as a freelancer, performing with symphonies and opera companies up and down the Eastern Seaboard, and picking up the occasional gig with pop artists who wanted onstage orchestra sections. It all dried up almost overnight in March 2020.Performances began to return this spring, and Mr. Ocheret recently picked up a once-a-week gig that will last into September with an orchestra in New Jersey. But his calendar remains sparse this fall, and without unemployment benefits to fall back on, he isn’t sure how he will get by. He has signed up for computer coding courses to give him another option — one that he doesn’t want to take, but that he says he may have to consider if the industry doesn’t rebound by the end of the year.“I hate to stop doing the thing I love,” Mr. Ocheret said. “But if things don’t start to improve, I may have to do something different.”Before the pandemic, Evan Ocheret, a professional oboist in Philadelphia, made a living as a freelancer.Hannah Yoon for The New York TimesThree federal programs will end this weekend. One, which extended regular benefits beyond the 26 weeks offered in most states, covers about 3.3 million people, according to the Century Foundation. A second program, Pandemic Unemployment Assistance, covers 4.2 million gig workers, the self-employed and others who don’t qualify for standard benefits. Nearly three million additional people will lose a $300 weekly federal supplement to other unemployment benefits.When Congress last renewed the programs in March, as part of Mr. Biden’s American Rescue Plan, policymakers hoped that September would represent a return to normal for the economy. If most Americans were vaccinated and the pandemic was under control, then schools and offices could reopen and people could return to work.But the rise of the Delta variant has complicated that picture. Major employers across the country have shelved their return-to-office plans. International tourism remains largely shut down, and restaurants, which were packed for much of the summer, are seeing reservations slow.“We’re in a different place now than we thought we were going to be,” Ms. McCarty said. “The Sept. 6 deadline made sense maybe in May and June. It seems preposterous now.”Ms. McCarty, 43, was furloughed as a buyer for a large Philadelphia clothing retailer at the start of the pandemic. A few months later, the job loss turned permanent, reshaping the McCartys’ lives.The family moved from Philadelphia to Lancaster County in search of cheaper housing. Ms. McCarty’s husband, a graphic designer, earns enough to pay rent, but they are still figuring out how to cover their other bills without the roughly $900 a week they were getting in unemployment benefits. Their 19-year-old daughter has set aside her college plans. And Ms. McCarty, a cancer survivor, is putting off medical tests until she can afford to pay the deductible on her insurance plan.“You put 10, 15, 20 years into a career and then to suddenly not be able to go see a dentist anymore, it feels like something’s wrong there,” she said. “I think I’m still grieving the loss of my opportunity of being middle class, because that’s gone again.”Regular unemployment benefits, without the $300 add-on, replace only a fraction of workers’ lost wages. In Pennsylvania, the maximum benefit is $580 a week, the equivalent of about $30,000 a year. In some Southern states, the maximum benefit is less than $300 a week.Still, decades of economic research have shown that unemployment benefits are at least a bit of a disincentive to seeking work. When the economy is weak, that negative consequence is offset by the positive impact the benefits have on workers, but many economists argue that it makes sense to ramp down benefits as the economy improves.Cutting off benefits for millions of people all at once, however, is another matter.“Losing a job is something that we know from research is one of the most damaging things to your financial and personal well-being over the long run,” said Andrew Stettner, a senior fellow at the Century Foundation. “We’ve avoided those kinds of long-term impacts to a large part during the pandemic because we’ve been aggressive with our forms of support. Now we’re pulling it back, we’re putting people at risk.”Ms. Harrison, despite her master’s degree, has already lost her job twice since the pandemic began. She was furloughed from her human resources job early on. She eventually found work helping to run a Covid-testing business, but was laid off again in March as the pandemic began to ebb. Now she spends her days scouring job boards and sending applications.“It’s going to end,” she said of the unemployment benefits. “You know it’s going to end. So you can’t just sit around and twiddle your thumbs.”Her husband has diabetes and high blood pressure, and they live with her mother, so Ms. Harrison, 47, is reluctant to return to in-person work until the pandemic is under control. Despite having a master’s degree and senior-level experience, she is applying for positions as a receptionist or an administrative assistant — jobs she last did decades ago.“I spent years in school — I spent money out of my own pocket to better educate myself — so that I would be able to be a good breadwinner and take care of my family,” she said. “Never did I think I would be applying to be somebody’s receptionist. But if somebody called me to be their receptionist, I’m taking it.”Jim Tankersley More

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    The Economy Is Booming but Far From Normal, Posing a Challenge for Biden

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    High inflation, ghostly downtowns and a resurgent virus have rattled consumers and created new obstacles as the president tries to push his broader economic agenda.The American economy is growing at its fastest clip in a quarter-century, yet it remains far from normal, with some workers and small-business owners facing increasingly tough times while others thrive. That divergence poses a challenge to President Biden, who has promoted the nation’s economic recovery as a selling point in his quest to win support for a multitrillion-dollar spending agenda that could cement his legacy. A summer that many business owners and consumers had hoped would bring a return to prepandemic activity has delivered waves of disappointment in key areas. Restaurants are short on staff and long on wait times. Prices have spiked for food, gasoline and many services. Shoppers are struggling to find used cars. Retailers are struggling to hire. Beach towns are jammed with tourists, but office towers in major cities remain ghost towns on weekdays, with the promised return of workers delayed by a resurgent coronavirus.The University of Michigan’s Consumer Sentiment Index suffered one of its largest monthly losses in 40 years in August, driven by the rapidly spreading Delta variant and high inflation. The survey’s chief economist, Richard Curtin, said the drop also reflected “an emotional response, from dashed hopes that the pandemic would soon end and lives could return to normal.”Mr. Biden and his advisers are confident that many of those issues will improve in the fall. They expect hiring to continue at a strong pace or even accelerate, fattening worker paychecks and powering consumer spending. They remain hopeful that a reinvigorated labor market will take the place of the fading stimulus from the president’s $1.9 trillion economic aid bill signed in the spring, and that the latest wave of the virus will not dampen growth significantly.On Friday, they released new projections forecasting that growth will hit 7.1 percent this year after adjusting for inflation, its highest rate since 1983.“Our perspective is one of looking at an economy that is growing at historic rates,” Brian Deese, the director of Mr. Biden’s National Economic Council, said in an interview.But there is mounting evidence that the coming months of the recovery could be more halting and chaotic than administration officials predict, potentially imperiling millions of left-behind workers as their federal support runs dry.Private forecasters have pared back growth expectations for the end of the year, citing drags on spending from the spread of the Delta variant and from the nationwide expiration of enhanced unemployment benefits next Monday. Emerging research suggests the end of those benefits might not immediately drive Americans back to the work force to fill the record level of open jobs nationwide.“People will be surprised at how much the economy decelerates over the next year as the stimulus boost fades,” said Jim O’Sullivan, the chief U.S. macrostrategist for TD Securities.Administration officials do acknowledge some potential hurdles. Some big-city downtowns may never return to their prepandemic realities, and the economy will not be fully “normal” until the virus is fully under control. They stress that increasing the nation’s vaccination rate is the most important economic policy the administration can pursue to accelerate growth and lift consumer confidence, which has slumped this summer..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“I don’t want to put a timeline on this,” said Cecilia Rouse, the chair of the White House Council of Economic Advisers. “We won’t feel totally completely normal until we have, whether we want to call it herd immunity or a greater fraction or percentage of the American population is vaccinated.”“As we conquer the virus,” she said, “we will regain normalcy.”The hospitality sector still employs millions fewer people than it did in February 2020.Gabriela Bhaskar/The New York TimesThe construction sector has regained most of the jobs lost early in the pandemic. Alyssa Schukar for The New York TimesThe economy’s rebound this year has been stronger than almost anyone predicted last winter, a result of the initial wave of vaccinations and the boost from Mr. Biden’s stimulus bill. Gross domestic product returned to its prepandemic level last spring, and retail sales have soared far beyond their pre-Covid path. Yet the recovery remains uneven and rattled by a rare set of economic crosswinds. In some sectors, consumer demand remains depressed. In others, spending is high but supply constraints — whether for materials or workers or both — are pushing up prices.For instance, the construction sector has regained most of the jobs lost early in the pandemic, and other industries, such as warehousing, have actually grown. But restaurants and hotels still employ millions fewer people than they did in February 2020. The result: There are more college graduates working in the United States today than when the pandemic began, but five million fewer workers without a college degree.Compounding the problem, employment in the biggest cities fell further than in smaller cities and rural areas, and it has rebounded more slowly. Employment among workers without a college degree living in the biggest cities is down more than 5 percent since February 2020, compared with about 2 percent for workers without a college degree in other parts of the country.Even as millions of people remain out of work, businesses across the country are struggling to fill a record number of job openings. Many businesses have blamed expanded unemployment benefits for the labor shortage. If they are right, a flood of workers should be returning to the job market when the benefits end after Labor Day. But recent research has suggested that the benefits are playing at most a small role in keeping people out of the work force. That suggests that other factors are holding potential workers back, such as health concerns and child care issues, which might not ease quickly.The Michigan sentiment data and the fade-out of stimulus benefits suggest consumers may be set to pull back spending further. But other data shows Americans increased their savings during the pandemic, in part by banking previous rounds of government support, and could draw on those funds to maintain spending for months to come.Administration officials hope to buck up consumers and workers by pushing Congress to pass the two halves of Mr. Biden’s longer-term economic agenda: a bipartisan infrastructure bill and a larger spending bill that could extend expanded tax credits for parents, subsidize child care and reduce prescription drug costs, among other initiatives.“Our hope is that the new normal coming out of this crisis is not simply a return to the status quo and the economy, which was one that was not working for most working families,” Mr. Deese said.The virus remains the biggest wild card for the outlook. There is little evidence in government data that the spread of the Delta variant has suppressed spending in retail stores. But air travel, as measured by the number of people screened at airport security checkpoints, has tailed off in recent days after returning to about 80 percent of where it was during the same week in 2019.Restaurant bookings on OpenTable, which had nearly returned to normal in June and July, are back down to 10 percent below their prepandemic level. Data from Homebase, which provides time-management software to small businesses, shows a sharp decline in the number of hours worked at restaurants and entertainment venues.Restaurant bookings on OpenTable, which had nearly returned to normal in June and July, are back down to 10 percent below their prepandemic level.Karsten Moran for The New York TimesAir travel has tailed off in recent days after returning to about 80 percent of its prepandemic level this summer.Stefani Reynolds for The New York TimesThe variant is already casting a shadow over the new school year, with some schools, including a middle school in Fredericksburg, Va., temporarily returning to virtual learning amid new outbreaks.Urban downtowns, once hopeful for a fall rebound in activity, are bracing for prolonged delays in white-collar workers returning to their offices.“Our No. 1 job is to get office workers back — that’s the driver of the downtown,” said Paul Levy, the president and chief executive of the Center City District, a local business-development group in Philadelphia.Mr. Levy’s group estimates that 30 percent of downtown office workers have returned so far to Philadelphia. It had been expecting that number to hit 75 to 80 percent after Labor Day, and had built an advertising campaign around the idea that the fall would mark a milestone in the return to normalcy. But now major employers such as Comcast have delayed their return dates, worrying business owners.Yehuda Sichel signed a lease for Huda, his gourmet sandwich shop in Philadelphia, on Feb. 29, 2020 — two weeks before the pandemic sent virtually his entire prospective customer base home indefinitely.He made it through the pandemic winter with takeout orders, holiday meal kits and some creativity. A short-rib special on a snow day when many other restaurants were closed helped him make payroll during a particularly grim period. Last spring, business began to improve, and Mr. Sichel invested in new equipment and a new kitchen floor in hopes of a surge in business once office workers returned. Now he doubts he will see one.“September was supposed to be this huge boom,” he said. “Now, September is going to be fine. I’m sure we’ll see a little bump, but not the doubling in business that I was hoping for.” More

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    Most Rental Assistant Funds Not Yet Distributed, Figures Show

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    Just $1.7 billion in funds intended to prevent eviction were disbursed in July as the White House braces for a Supreme Court decision that could strike down its eviction moratorium.The $46.5 billion rental aid program created to pay rent accrued during the pandemic continues to disburse money at a slow pace, as the White House braces for a Supreme Court order that could strike down a new national moratorium on evictions.The Emergency Rental Assistance Program, funded in the two federal pandemic relief packages passed over the last year, sputtered along in July, with just $1.7 billion being distributed by state and local governments, according to the Treasury Department, which oversees the program.The money meted out was a modest increase from the prior month, bringing the total aid disbursed to about $5.1 billion, figures released early Wednesday showed, or roughly 11 percent of the cash allocated by Congress to avoid an eviction crisis that many housing experts now see as increasingly likely.That cash was slated to be spent over three years, but White House officials — who have spent months pressuring local officials and tweaking the program to make access easier — had hoped states would have spent much more by now.“About a million payments have now gone out to pay back rent for families — it is starting to help a meaningful number of families,” said Gene Sperling, who oversees the operation of federal pandemic relief programs for President Biden.“It’s just not close to enough in an emergency like this to protect all the families who need and deserve to be protected. So there is still way more to do and to do fast,” he added.Data released by the Census Bureau on Wednesday illustrated the magnitude of the eviction risk.An estimated 1.2 million households are very likely to face eviction for nonpayment of rent over the next two months, according to the bureau’s periodic Pulse survey, which extrapolated national totals from a pool of about 70,000 respondents who answered a survey this month.Of the roughly 2.8 million households that have applied for aid, only about 500,000 reported receiving assistance — another 1.5 million are waiting for approvals, while nearly 700,000 have been rejected, according to the estimates.And those are just the tenants who have tried to get access to the program: Over 60 percent of vulnerable renters have not even applied.To speed things up, Treasury announced another round of changes to the program, including a directive to local officials that they allow tenants to use self-reported financial information on aid applications as a first, rather than a last, resort, while granting permission for states to send out bulk payments to landlords and utility companies in anticipation of federal payouts to tenants.They are also expanding existing initiatives to prevent evictions at properties funded by the Department of Housing and Urban Development, the Agriculture Department and the Department of Veterans Affairs.Mr. Biden’s domestic policy staff has mapped out policy contingencies if the Supreme Court strikes down the moratorium, which is the administration’s principal safeguard for hundreds of thousands of low-income and working-class tenants hit hardest by the pandemic. White House lawyers expect a court decision this week.Mostly, the response will entail doubling down on existing efforts to speed up flow of the aid. But officials are likely to switch to a triage model, focusing on a handful of states and cities that have weak tenant protections, high backlogs of unpaid rent and low use of the federal rental assistance fund.The moratorium was initially put into effect by the Centers for Disease Control and Prevention in September under President Donald J. Trump. Mr. Biden extended it several times this year, but allowed it to briefly expire earlier this month. He reinstated it, in a slightly modified form, on Aug. 3 under pressure from congressional Democrats.That final 60-day extension, enacted over the objection of White House lawyers, was intended to buy more time to distribute the emergency rental assistance.The program is administered by the federal government, but it is up to states to build out a system to deliver aid to struggling renters and landlords, and that has been the main source of its problems.Treasury Department and White House officials acknowledged on a conference call Tuesday evening that the program was not ramping up fast enough to entirely prevent a wave of evictions, even if the justices allow it to remain in place until its scheduled expiration on Oct. 2.[Read more on why it’s been so challenging getting aid to renters.]But they also cited progress. State and local agencies have begun to steadily increase payments to hundreds of thousands of households that were at risk of eviction, with most of those going to low-income tenants. They also believe the pace of payments has continued to accelerate in August.Administration officials continue to blame the program’s struggles on local officials, many of whom are reluctant to take advantage of the new fast-track application process, which allows tenants to self-certify on applications, freeing them from the need to provide detailed documentation.The new guidance emphasized that applicants can “self-attest” to declare their eligibility for rental aid without the need for additional documentation. The Treasury Department believes that this will expedite the process by reducing cumbersome paperwork requirements.The Treasury Department also took action to empower nonprofit organizations to more quickly provide relief to tenants who are facing eviction.In recent weeks, local officials have complained that moving too fast on aid applications could lead to errors, fraud and audits; the White House has countered by telling them that those risks are insignificant compared with a wave of evictions hitting tenants who did not get their aid quickly enough to keep a roof over their heads.“They can and should use simpler applications, speedier processes and a self-attestation option without needless delays,” Mr. Sperling said.Several states, including Texas, have been particularly effective in ramping up their aid distribution systems, officials said. But many others — especially New York, Florida, Tennessee, Ohio and South Carolina — have been sluggish, making tenants especially vulnerable to displacement once the moratorium is lifted, they said.But there are signs that things might be changing: New York released only a minuscule portion of its funding by Aug. 1, but has spent about $200 million in the last few weeks, according to a spokesman for the state agency that disburses the aid.Gov. Kathy Hochul of New York, who was sworn in this week, has said speeding up the system is one of her top priorities.States that have not used much of their money by the end of September could see their funds reallocated to other states that have been able to distribute it more effectively.It will take local housing courts weeks to clear the backlog of eviction cases delayed by the moratorium. But many owners, especially small landlords, have rejected the federal aid, arguing that evicting nonpaying tenants is not only their right but the most effective way of ensuring their revenue is not interrupted in the future.Last week, Wally Adeyemo, deputy Treasury secretary, traveled to Hyattsville, Md., to talk to landlords, tenants and administrators of a rental assistance program that has had success by using self-reported applications and census data to determine eligibility.Administration officials, worried that a new moratorium could be struck down at any time, are also turning to state courts — which adjudicate tenant-landlord disputes — to help deliver aid, by pressuring landlords to accept federal payments instead of proceeding with evictions, and educating tenants, who often have no legal representation in court, on their right to apply for assistance. More