A year of hardship, helped and hindered by Washington

Written By: Jason DeParle © 2021 The New York Times Company The New York Times
Washington, DC, United States of America Published: Feb 14, 2021, 11:15 PM(IST)

Coronavirus in USA Photograph:( Reuters )

Story highlights

As the virus ravaged jobs last spring, rapid federal action protected millions of people from hardship and showed that government can be a powerful force in reducing poverty.

When the coronavirus pandemic struck last March, Kathryn Stewart was working at a gas station in rural Michigan and living in her mother’s trailer with eight relatives, three dogs and a budget with no room for error. Her mother, who is disabled, soon urged her to quit to avoid bringing home the disease. Stewart reluctantly agreed, wondering how she would support herself and her 10-year-old son.

An expanded safety net caught her, after being rushed into place by Congress last spring with rare bipartisan support.

To her surprise, Stewart not only received unemployment insurance but a weekly bonus of $600 more than tripled her income. A stimulus check offered additional help, as did a modest food stamp increase. Despite opaque rules and confounding delays, the outpouring of government aid lifted her above the poverty line.

Six months later, after temporary aid expired and deadlock in Washington returned, Stewart’s benefits fell to a trickle, and she was all but homeless after a family fight forced her from the trailer to a friend’s spare room. She skipped meals to feed her son, sold possessions to raise cash and suffered anxiety attacks so severe they sometimes kept her in bed.

Just as Stewart finally found a job, celebration turned to shock: The state demanded that she repay the jobless aid she had received, claiming she had been ineligible. That left her with an eye-popping debt of more than $12,000.

“I spent the whole day just trying to breathe,” Stewart said the day the notice arrived. “I’m really confused about the whole thing. I’m trying not to panic.”

In the robust aid she received and its painful disappearance, Stewart’s experience captures both sides of the gyrating federal efforts to fortify the safety net in a crisis of historic proportions.

As the virus ravaged jobs last spring, rapid federal action protected millions of people from hardship and showed that government can be a powerful force in reducing poverty.

Yet the expiration of aid a few months later also underscored how vulnerable the needy are to partisan standoffs in an age of polarized government. Gaps in aid left families short on food and rent, uncertainty made it impossible to plan and confusion joined fear and worry.

In his first weeks in office, President Joe Biden appears to have both lessons in mind. A benefit extension passed in December expires next month, and he is urging Congress to spend big and move fast to keep 11 million workers from losing unemployment aid. Democrats are advancing his $1.9 trillion plan for stimulus and relief with a fast-track procedure that limits their policy options but increases the odds of avoiding more whipsaw delays.

Critics of the spending warn it swells the national debt and erodes incentives to work. Supporters say the government’s impact has rarely seemed so direct: When help flowed at extraordinary levels, poverty fell. When it ended, poverty rose.

“This could be a watershed moment,” said H. Luke Shaefer, who runs a poverty research center at the University of Michigan. “We showed how much government can do to mitigate hardship, even if the effort didn’t last.”

With millions still depending on government aid in a weak recovery, Stewart’s experience over the past 10 months highlights the stakes. As her complex life shows, the causes of poverty often run deep, and some lie beyond the reach of a government check. But the aid, while it lasted, broke her fall, and she is now back on her feet.

In recent weeks, Stewart, 36, has been working at an Amazon warehouse and fighting Michigan’s efforts to recoup her unemployment benefits. She said she was “super happy” to no longer be at risk from another Washington impasse.

An introspective woman, insightful about her hardships but distant from politics, she wonders how federal help has at once been so generous and so unsteady — a question that weighs on millions of Americans now waiting to see whether Congress moves quickly enough to sustain their benefits.

“It made a huge difference in our lives,” Stewart said. “But it starts and stops and it’s really confusing. You feel helpless when you’re being helped by the government.”

Should another crisis arise, she said, “I hope the government has a better plan.”

Then Came the Pandemic

Stewart grew up accustomed to hardship and inventive in her responses. In a family too poor for vacations, she created her own by tagging along on her stepfather’s tractor-trailer runs. When he fought with her mother, she sheltered in closets. When he left, her mother tried to quell the family’s hunger with diet pills. Stewart was in grade school when panic attacks started, which she blamed on the conflict.

An unsupervised adolescence followed in Grand Rapids, where Stewart slept in parks with runaways. She liked the literature of bohemians and rebels — Hunter S. Thompson and Oscar Wilde — but left school at 16 and lived in her car.

Short on formal education, Stewart was long on curiosity and peripatetic instinct, which carried her from Ireland to California in between seasonal work at Michigan resorts. She dyed her hair unusual colors. She gave herself tattoos. She covered her walls with the surrealist works of Salvador Dalí, in shared faith that “you create your own reality.” Fearful of forgetting, Stewart kept a memory box, which included a middle-school note, a ukulele pick and clippings from her first mohawk.

In her mid-20s, Stewart married and had a son, Jack, but her husband left and her anxiety grew. “Over the years I’ve gotten real anxious — almost afraid of people,” she said. “I’m an empath — if someone else feels bad, I feel bad.”

Still, Stewart worked, most happily in solitude.

By 2019, Stewart was a night janitor and living with her sister in Grand Rapids. Her sister fell behind on the rent and insisted they move in with their mother, five hours away in rural Ossineke. Stewart grudgingly succumbed. “We all rely on each other, which is good except for us not getting along,” she said.

With four children and conflicting parenting styles, the trailer proved crowded and tense. When Stewart found work as a gas station cashier — $10 an hour, 20 hours a week — she welcomed the escape as much as the pay.

A few weeks later, the coronavirus hit.

Help Was on the Way

As the virus spread in early March, President Donald Trump insisted it posed no threat. “Jobs are booming, incomes are soaring,” he tweeted. By the next week, Disneyland and Broadway were padlocked and the stock market notched its worst daily loss in decades.

While the need for Washington action was clear, the risks of an impasse were great. Liberal Democrats controlled the House, conservative Republicans held the Senate, and Trump derided the House speaker as “Crazy Nancy” Pelosi. Yet within a few weeks, they agreed on a $2.2 trillion plan.

One surprise was how much it did for the poor, a class not known for political clout. Even the poorest families fully qualified for stimulus payments — $1,200 for adults, $500 for children (some Republicans had proposed giving them less) — and at the Democrats’ insistence, Congress greatly expanded jobless benefits.

The existing program was filled with gaps: It covered only about one-quarter of the jobless and replaced less than half their lost wages. Congress widened coverage, temporarily adding part-time workers, independent contractors and others typically excluded. And for four months it gave everyone on jobless aid a large bonus: $600 a week.

The payments were more than many workers had earned on the job. Critics said the aid would discourage the jobless from seeking work, but urgency prevailed. “Gag and vote for it anyway,” the Senate leader, Mitch McConnell, advised fellow Republicans. The Senate vote was 96-0.

Approving aid was one thing, delivering it another. Most stimulus checks arrived automatically and fast, though people who did not file tax returns had to contact the IRS — a procedural hurdle that kept payments from about 8 million potentially eligible people, mostly low-income. Households with unauthorized immigrants were barred from stimulus checks, which excluded about 5 million spouses and children who were citizens or legal residents.

Unemployment insurance proved harder to get. With nearly 40 million claims in nine weeks, the state-run programs were overwhelmed. Computers crashed. Phone lines jammed. Governors called in the National Guard to process requests.

Food shortages soared, especially among families with children as school closures deprived millions of meals. Lines outside food banks stretched for miles.

But the havoc obscured the scale of the coming relief. Help was on the way.

‘I Was Just Like, Wow!’

Stewart was still working in April when a $1,700 stimulus check arrived. Like many poor people, she used it in part to settle debts, including a large fine for driving an unregistered truck. “That made me feel a hundred times better,” she said.

Soon after, she got a cold and fear spread through the trailer. “My mom is immunocompromised — she said you absolutely cannot be working with the public,” Stewart said. With school out, her mother also wanted her home to watch her son. Stewart felt forced to quit working.

As a recently hired part-time worker, she did not think Michigan would approve her request for unemployment benefits. But the new program covered workers who quit to protect medically vulnerable members of their households. Stewart received $1,250, just for two weeks.

“I was just like, Wow!” she said.

The payments ceased without explanation but resumed a month later at $760 a week, with money for weeks missed. The aid was nearly four times her lost paycheck. It was more than she had ever made — “more than I could even think about before I got it,” she said.

By June, about 1 in 5 American workers was getting jobless aid — five times the previous peak. Like Stewart, roughly 40% of them were covered by the new pandemic assistance. And like Stewart, most saw their incomes grow.

Congress aimed to fully replace the average worker’s pay, but its formula overshot the mark. Three-quarters of the jobless received unemployment checks that exceeded their lost earnings, according to Peter Ganong and colleagues at the University of Chicago, with the median replacement rate at 145%. Among the poorest tenth of workers, incomes nearly tripled.

Despite mass unemployment, poverty estimates fell. Researchers at the University of Chicago and Notre Dame found there were 5 million fewer poor people in June than before the crisis. Jobless people usually cut their budgets, but in this case their spending rose, by as much as 20%.

The unemployment assistance was extraordinary but not uniform. Immigrants without legal status were ineligible, as were Americans paid off the books. Some eligible workers did not know to apply, and others encountered a bureaucratic maze. Eliza Forsythe, an economist at the University of Illinois, saw a “lottery effect” at play, with random factors deciding which households got aid. But most eventually did.

Truck Parts and Camping

Policymakers often debate what difference the safety net makes. The 12 weeks of enhanced benefits touched most corners of Stewart’s life. She remained an anxious single mother living in an overcrowded trailer — a woman with a hard lot. But she ate better. She quarreled with her family less. She suffered less debilitating stress.

Mindful that the $600 weekly bonus would soon expire, Stewart eyed projects with long-term benefits. Transportation is essential in rural Michigan, and she considered herself handy with a wrench. She spent $2,000 on tools and parts to rebuild the engine of her old truck.

The trailer was in disrepair. For $1,700 Stewart patched the roof and porch, replaced the kitchen cabinets and a bathroom wall, and added a storage shed. Her credit was in shambles, too. She settled a hospital bill and invested in prepaid credit cards to lift her credit score.

She also had some fun.

A creek ran behind trailer. “I said, ‘Man, we should be in the water,’” she said. Kayaks followed. She and her mother had long talked about camping, and now she had money for gas and gear. They stayed up late talking by the fire and returned from a hike around the lake with buckets of smoky quartz. In a strained relationship, the trip was like the stones — a treasure salvaged from rocky shores.

No purchase made Stewart happier than the Xbox she bought for Jack’s 11th birthday. She hid it for three months, fearing she would be broke again by the celebration. It was the sort of extravagance he kept out of mind, and Stewart relished the looming surprise.

“It made me feel like I was the kind of mother I wanted to be,” she said.

After years of anxiety and depression, Stewart did not go as far as to argue that money buys happiness. But she said it helped. “I did stop having panic attacks as much,” she said. “It was just less stressful. It made a huge difference.”

Washington Dithers

Washington made that difference. With more than 30 million people collecting unemployment in July and the bonus payments expiring at the end of the month, the question was whether Washington would act again.

Amid a slow recovery and rising infections, most economists called for more stimulus and relief, as did the chair of the Federal Reserve, Jerome Powell, who warned that the downturn was especially hard on low-wage workers and people of color.

The Democratic-run House moved quickly, voting in May to extend the bonuses as part of a $3 trillion stimulus bill. Senate Republicans derided the cost, but were slow to propose an alternative. Some argued the economy was recovering, and some feared the bonuses discouraged work, though multiple studies found otherwise.

As the bonuses expired on July 31, new weekly jobless claims topped 1 million for the 19th straight week.

Lengthy negotiations bore no fruit. With Election Day approaching, Pelosi seemed to believe that Senate Republicans would give in to the Democrats’ demands. As talks ground on, Trump swung wildly, using executive action for a short-term fix (a $300 weekly bonus, for six weeks) while alternately demanding and spurning deals.

The political calculations were lost on Stewart, who grasped only the lost aid. “I don’t think any of them really understand about being poor,” she said.

Without the bonuses, average unemployment checks fell by about two-thirds. Stewart’s simply disappeared. Besieged with fraud, Michigan froze hundreds of thousands of cases while it investigated, including hers. “I just went back to being really broke again,” she said.

Stewart sold possessions — a bicycle, a camera, her grandmother’s watch. The credit cards that she hoped would bolster her finances ran up fees and closed. The truck into which she had invested so much became a metaphor: It ran only in reverse.

Her food stamps ran out before the end of the monthly cycle. While Stewart skipped meals to keep Jack fed, there were days when he ate a single meal. “You hear him say ‘I’m hungry,’ and your heart breaks,” she said.

As aid dwindled, hardships rose nationwide. The number of poor people, which had declined through June, grew by 8 million through the rest of the year. Biweekly surveys by the Census Bureau showed steadily rising need.

Reports of depression climbed 12%, according to an analysis of the surveys by Shaefer and a colleague, Patrick Cooney. The number of people behind on rent rose 27%. By the end of the year, more than 1 in 6 households with children said they sometimes or often lacked enough to eat.

“When the government acted, things got better — when the aid went away, things got worse,” Shaefer said.

After seven weeks, Michigan resumed Stewart’s unemployment aid in mid-September, with payments for the missing weeks. But without the bonus, her weekly amount fell to $160, a decline of nearly 80%.

In October, Stewart took Jack on a birthday visit to Grand Rapids and gave him the Xbox. Rather than celebrate, he chided her, warning they could not afford it. Then he played it, as she hoped.

An argument with her mother followed, for reasons Stewart struggled to explain. Perhaps the hardship had simply exhausted everyone’s patience. When the phone call between them ended, Stewart had lost her spot in the trailer. Only a friend’s spare room kept her and Jack from a shelter.

“We are homeless,” she said.

With Stewart at a low point in late October, her jobless aid stopped again. She discovered she had accidentally closed her case while reviewing it on her phone. When she reapplied, the case was frozen — for the third time in five months, her benefits ceased. When a reporter called one night, Stewart said she had not eaten in a day and a half.

A month later, Stewart’s application was denied. Although the gas station where she had worked did not contest her original claim, it now said she had quit without reason. Stewart insists that she explained she was leaving to protect her mother’s health.

Next came the state’s demand that she repay the earlier aid — $12,574.12 — and warnings that a false statement could lead to “jail time.”

Stewart had just found the Amazon job. It paid $16.30 an hour, more than she had ever made. She could work nights and be home when Jack took online classes. “Whoo-hoo,” she had written, sharing the news. But she worked her first shift under the threat of garnished wages.

Faith in the Safety Net

It took the November election to end the Washington stalemate. Action did not come from new economic data. Only the politics changed.

As president-elect, Biden wanted to quickly stimulate the economy he would inherit. He said a compromise could provide a “down payment” on a larger package to follow. After long rejecting the down-payment logic, Pelosi accepted a $900 billion bill — smaller than those she had rejected — saying that she trusted Biden to keep fighting.

With control of the Senate depending on two runoff elections in Georgia, Republicans compromised, too, courting voters (unsuccessfully) with a compromise that included a short-term extension of unemployment bonuses at $300 a week.

Shortly before taking office, Biden proposed his bigger plan, with more stimulus checks, larger unemployment bonuses for a longer duration and an income floor for every family with children. The details are complex but the philosophy is clear: He is beginning his presidency with a statement of faith in the power of the safety net.

With Democrats holding Congress by the thinnest margin, it has advanced with no Republican votes. Whether Democrats can enact it before the expanded jobless benefits expire again in March remains uncertain.

Still moving packages at the Amazon warehouse, Stewart is now less vulnerable to a political stalemate. While the pace is punishing, with a shift that starts at 1:20 a.m., she displays a self-mocking pride in her endurance.

“I’m a number but a number with a paycheck,” she said.

She continues to appeal the state’s efforts to recapture her unemployment benefits.

Nearly a year into the pandemic, profound differences separate the parties’ views of the safety net. But those differences get lost at the distance from which Stewart views politics. She strongly favors neither party and did not vote in November.

Still, her fluctuating fortunes have imparted a lesson about the clashes of Washington politicians.

“Maybe I wouldn’t have noticed it before,” she said, “but what they do really makes a difference.”

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