As the December 26 expiration date for key temporary unemployment benefits approaches, the media has been filled with stories about a looming “Christmas cliff” facing millions of recipients. Which begs the question: why did lawmakers set benefits to expire the day after Christmas in the first place, timing which can be so easily ridiculed? The answer reflects the sometimes bizarre logic behind how Washington works. That is, the same lawmakers who created the temporary benefits deliberately chose program expiration dates like the day after Christmas because they believe that joyless timing increases the chances the benefits will be extended.
While the March CARES Act that created these temporary unemployment benefits received bipartisan support, it’s no secret each party had different priorities for key provisions that went into it, or that its unemployment benefit policies were drafted by Democratic lawmakers. As Politico noted, the federal $600-per-week unemployment bonus policy was “a provision Democrats added” to the legislation. That extraordinary unemployment assistance was the key demand of Democrats in relief negotiations: “‘That is our bottom line. It is our single most important issue,’ Sen. Ron Wyden (D-Ore.) told reporters about expanding unemployment.” Senate Democratic leader Chuck Schumer (D-NY) even claimed he “conceived this plan,” starting with its “dramatic and historic expansion and reform of the unemployment insurance program.
It’s not surprising the same lawmakers who crafted those temporary benefit programs also chose expiration dates designed to increase the odds those programs would be extended. In doing so, they were well aware the Congressional calendar favors some expiration dates over others. For example, large spending bills that regularly pass in December present inviting targets for adding “extenders” — regular extensions of expiring tax and spending policies. In election years, and especially presidential election years like this one, the end of July is a similarly appealing time for temporary programs to nominally “expire” if you really want them to continue. Coming before Congress’s monthlong August recess and the start of campaign season, late July typically marks the departure of the last major legislative train to which an extender could be readily added. Party conventions in August also create a ready platform for supporters to take credit for a recent extension or attack opponents for blocking one, all on national TV.
Not surprisingly, the end of July and December are exactly the times lawmakers chose to let temporary unemployment benefits expire this year. First, $600-per-week federal bonuses added to every unemployment check were authorized through late July. Despite the House’s passing extension legislation in May and protracted negotiations, those bonuses ultimately lapsed, with the administration’s novel $300-per-week supplements in August and September smoothing the July cliff. And the campaign for reviving $600 bonuses has continued during months of subsequent negotiations.
Now comes the end-of-December cliff, which applies to temporary programs providing federal extended benefits to those exhausting state unemployment benefits and covering others not eligible for state unemployment benefits at all. Predictably, legislation to extend those programs is now under discussion as an addition to a must-pass end-of-year spending bill. For example, the recently proposed bipartisan, bicameral “framework” would extend soon-to-expire unemployment programs into early 2021, while reviving $300 bonuses for several months as well.
Meanwhile, Sen. Schumer and other Senate Democratic leaders recently introduced their own extension proposal, which they dubbed the “American Worker Holiday Relief Act.” That legislation would extend soon-to-expire programs indefinitely and revive $600 bonuses into early 2022 — continuing benefits through literally two holiday seasons. As Sen. Schumer recently said, “"Christmas is approaching, and we cannot have a heartless cut-off of these benefits." That rhetoric recalls former Rep. Jim McDermott (D-WA), who in December 2011 dramatized the impending effects of another Christmas cliff by placing lumps of coal in a stocking on the House floor (the benefits were subsequently extended). And it’s especially ironic coming from a lawmaker who “conceived” the Christmas cliff in the first place.
Matt Weidinger is a Rowe Fellow in poverty studies at the American Enterprise Institute.