A $1,200 check won’t last long — even in Texas

by | Mar 27, 2020 | Economy, Policy

The House passed a $2 trillion economic relief plan on Friday aimed at fighting financial strain caused by the COVID-19 pandemic.

Included in the massive stimulus package that’s now likely to become law is a $1,200 check for Americans with annual incomes up to $75,000. The stimulus package also offers $600 a week in unemployment benefits that are added atop existing state unemployment benefits. 

The legislation is a good first step, but it won’t be easy to get things up and running.

For starters, more than 800,000 Texans are currently applying for unemployment benefits, a massive spike in claims that is only expected to grow and which is currently overwhelming the website and call centers of the Texas Workforce Commission, the state agency that administers both state benefits and the expected weekly $600 in federal unemployment benefits. Nationwide, the number of unemployment claims has soared to 3.3 million.

With the Texas Workforce Commission stretched to capacity and claims still exponentially rolling in, it could take some time for many Texans to actually start receiving unemployment benefits, including the weekly $600 that would be offered by the federal government.

That means that for many Texans out of work, the $1,200 check by the government may be the only immediate financial assistance they receive. That could be devastating for those living in metro areas where $1,200 doesn’t stretch far enough, including Texas, a state well-known for its relatively cheap living. 

According to the Economic Policy Institute, a person living in any of Texas’ largest cities is estimated to pay anywhere between $2,700 – $3,200 in monthly expenses for necessities like rent, food, and healthcare.

These problems are just the tip of the iceberg, too.

Another issue is that contract and gig workers need to apply for unemployment assistance through the Disaster Unemployment Assistance program, or federal relief funds that have yet to be released by Trump. What’s worse, even when Trump finally makes those funds available as governors have urged him, contract workers seeking federal disaster unemployment assistance must still apply through the Texas Workforce Commission, which again, is overloaded with hundreds of thousands of other out-of-work Texans.

But even streamlining unemployment claims won’t fix grave issues with who is and isn’t eligible for benefits in the first place. Workers that may fall victim to gaps in the system and go without benefits include those who earn too little, those who recently graduated from high school/college and thus don’t have a sufficient work history to qualify, undocumented workers, and workers in the cash economy. 

It will be up to Gov. Greg Abbott to expand unemployment benefits to prevent any Texans from falling through the cracks during the outbreak. Texas has already waived waiting periods and work-search requirements usually tied to benefits, but other states have gone further, like allowing contract workers to receive state benefits or increasing weekly benefits altogether. 

On average, it takes about four weeks for the Texas Workforce Commission to determine if an applicant is eligible or not. It’s possible the delay could even be longer with the surge in claims.

In the meantime, a $1,200 check will only go so far. And if Republicans in Washington get their way, it could be the last one Americans see during a pandemic that is projected to go on for months.

Photo: Getty Images

fernando@texassignal.com | + posts

Fernando covers Texas politics and government at the Texas Signal. Before joining the Signal, Fernando spent two years at the Houston Chronicle and previously interned at Houston’s NPR station News 88.7. He is a graduate of the University of Houston, Jack J. Valenti School of Communication, and enjoys reading, highlighting things, and arguing on social media. You can follow him on Twitter at @fernramirez93 or email at fernando@texassignal.com

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