Trump’s efforts to partially restore the sweetened jobless benefits, which expired at the end of July, hinges on cash-strapped states being able to adapt a new unemployment system and fund one-fourth of the aid.
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States have two options to fund the $100 share they owe: They could count the first $100 they already pay in standard, weekly benefits to meet that requirement. That could mean the aid is reduced to $300 a week for some out-of-work Americans — half of what they were previously receiving.
Despite concerns that state unemployment insurance systems, many of which are notoriously outdated and rely on an Eisenhower-era computer system, could take weeks to get up and running, Treasury Secretary Steven Mnuchin said Monday that he expects most states to administer the extra benefit by the end of August.
“Within the next week or two, most will be able to execute,” Mnuchin said during a White House press briefing.
Trump’s decision to extend the jobless aid, part of a broader series of executive actions that he undertook after coronavirus relief negotiations stalled out on Capitol Hill, was met with criticism from Democrats and some Republicans. governors warned their states may not be able to chip in the additional $100.
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“We appreciate the White House’s proposals to provide additional solutions to address economic challenges; however, we are concerned about the significant administrative burdens and costs this latest action would place on the states,” New York Gov. Andrew Cuomo and Arkansas Gov. Asa Hutchinson, the chair and vice-chair of the National Governors Association, said in a statement Monday.
That was a sentiment echoed by California Gov. Gavin Newsom, a Democrat, who said there’s “No money sitting in the piggy bank” for the state to put forward an extra $100 in unemployment aid.
“Simply, it does not exist,” he said.
At the end of July, the extra $600 a week in jobless aid — part of the massive $2.2 trillion spending package passed at the end of March — officially expired, dealing a blow to the 30 million Americans who were collecting the money. One estimate from the Century Foundation indicated the end of the $600 would drain about $15 billion per week from the economy.
Whether to extend the supplemental $600 a week in jobless aid was a key sticking point in negotiations over the next relief bill. Democrats have maintained the sweetened benefits need to be extended through the end of the year, while Republicans have argued that it disincentivizes Americans from returning to jobs that pay less, a notion economists have disputed.
GOP lawmakers proposed a $200-a-week replacement instead.
When the $600-a-week federal benefit lapsed, the typical unemployment check returned to an average of $330 per week, a significant benefit cut for individuals collecting the aid.
For the past 20 weeks, jobless claims have continuously topped 1 million; before the pandemic, the record high was 695,000 set in 1982.
The Labor Department’s July jobs report released last Friday showed that employers added 1.8 million jobs in July, sending the unemployment rate down to 10.2%. While it marked the third consecutive month of job growth in the millions, the economy has so far added back less than half — about 42 percent — of the 22 million jobs it lost during the pandemic.
There are roughly 10.6 million more out-of-work Americans than in February.
