- At least 24 red states are starting to end their federal jobless benefits within weeks.
- The moves will impact 4 million people on unemployment, with about half losing all government aid.
- The Labor Department has concluded it has limited authority to step in to keep aid flowing.
- See more stories on Insider’s business page.
Almost half of all US states have decided to end their participation in federal unemployment benefits, setting up some workers to receive drastically reduced payments – and others without any federal relief coming through the door.
Twenty-four GOP-run states are moving to slash federal unemployment benefits within weeks, citing a so-called labor shortage and lack of hiring. Governors in those states are ending programs set up in the early in the pandemic, which added federal cash onto state unemployment checks and extended the weeks people were eligible for aid. Nebraska was the latest to pull the plug on all stimulus jobless aid programs, on Tuesday.
The measures will slash jobless aid from 4 million people, per an estimate from Andrew Stettner at the liberal-leaning Century Foundation. That projection means that nearly one in four of all Americans receiving unemployment are poised to experience some reduction in their benefits.
One of them is Scott Heide, a 35-year-old in Florida. His state’s governor, Ron DeSantis, announced this week that the state would be terminating its participation in the extra $300 in weekly federal benefits effective June 26.
Heide told Insider that he’s been on unemployment for almost a year. When he lost his job, he also lost his health insurance, and has had to pay over $800 a month for COBRA insurance since. He had to leave his apartment and move back in with his parents.
The original $600 supplement “really made a big difference,” he said, but that expired after just a few months. Then, Biden’s American Rescue Plan added in a $300 benefit. “That was like my lifeline” for paying bills, Heide said. But at a certain point he said he knew it was a “matter of time” before DeSantis went down the same road as other GOP governors.
“It’s just really tough because I’m trying to get a job, but it’s not that easy. And I feel like I’m being punished for no reason when it’s out of my control if somebody offers me a job. All I can do is apply,” Heide said.
Florida is an anomaly among the GOP states moving to end federal benefits in that it’s only stopping the additional $300 – for now, at least – and keeping in place programs that expand unemployment eligibility and the number of weeks recipients can access benefits.
In other states, about 2.1 million workers on those programs – Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) – will lose their benefits entirely, per Stettner’s calculations.
Some advocates and politicians have said that Biden’s Labor Department has an obligation to step in and provide PUA benefits, arguing that it’s mandated under the CARES Act.
Sen. Bernie Sanders wrote a letter to Labor Secretary Marty Walsh pressing the Labor Department to continue paying out benefits on its own.
Other Democrats have called on the agency to continue exploring options without specifically urging them to distribute the aid.
“I think the administration should be looking under every rock, and every nook and cranny for ways to protect the vulnerable,” Wyden said in an interview on Tuesday. He suggested he was looking at “next steps.”
Yet it appears that the Biden administration won’t be able to prevent a lapse in unemployment aid in the GOP states. The Labor Department has concluded it’s probably unable to help pay out the benefits, an administration official told Insider last week, given that unemployment systems are administered as a federal and state partnership built on agreement from the states.
The Labor Department did not immediately respond to a request for comment.
“I think there is still going to be litigation on this topic,” Stettner told Insider. “The real legal question is whether DOL has the authority to force states to pay benefits or find a way to get them out themselves.”