- Nearly three weeks after President Donald Trump signed an executive order to boost unemployment aid, only six states are paying out the $US300 federal supplement.
- Arizona, Louisiana, Missouri, Montana, Tennessee, and Texas are paying out the federal benefits, and 32 states have been approved so far.
- “I think states are really, really making sure they’re implementing this within the four corners of the law, and I don’t blame them,” said Michele Evermore, an unemployment expert.
- Visit Business Insider’s homepage for more stories.
Nearly three weeks after President Donald Trump signed an executive order to boost unemployment aid, states are moving slowly to implement the $US300 federal supplement to unemployment benefits.
The federal government has approved most states to set up the program. But as of Friday morning, only six states had started paying out the money: Arizona, Louisiana, Missouri, Montana, Tennessee, and Texas.
Each state has until September 10 to decide whether to apply for the initiative, which is financed with $US44 billion in disaster relief funds from the Federal Emergency Management Agency. For most states, additional government aid could start going out in mid-September or later, The New York Times reporter Ben Casselman said.
With the slow rollout of the Lost Wages Assistance program, millions of unemployed people who had received the $US600 federal unemployment benefit that expired a month ago must get by without extra federal aid.
The Trump administration had said the initiative would provide speedy relief as it sidestepped Congress. Treasury Secretary Steven Mnuchin said on August 10 that most states would be able to execute the plan within two weeks. But that came and went with few states distributing the federal cash to people without jobs.
“I would be incredibly nervous to take money with so little guidance that came out so fast with so little forethought,” Michele Evermore, a policy expert at the National Employment Law Project, told Business Insider. “I think states are really, really making sure they’re implementing this within the four corners of the law, and I don’t blame them.”
She went on: “The worst thing that can happen is a bunch of benefits go out and then you find out you did it wrong and you have to redo it.”
Evermore and Andrew Stettner, a senior fellow at the Century Foundation, estimated that the program would provide about six weeks of aid to unemployed people. About 28 million people are receiving unemployment benefits, which usually cover 30% to 50% of lost wages.
State agencies have struggled to deliver aid as they process massive numbers of claims each week. Now they have been asked to work with FEMA to set up a new system with additional rules and requirements.
Most unemployed people have no additional federal support at the moment
The number of jobless claims has regularly topped 1 million even five months into the pandemic. On Thursday, the Labour Department said 1.4 million people filed for unemployment last week.
Ernie Tedeschi, a former economist in the Obama administration, said that in August, “week to week, the vast majority of unemployed workers are not receiving any emergency unemployment insurance.”
“That means we missed out for the entire month between $US60 billion and $US70 billion in federal support that we got in July,” he told Business Insider, describing the order’s impact on boosting the economy as “marginal so far.”
Tedeschi estimated that the $US300 supplement would provide an 85% wage replacement for the average unemployed person.
The measure was initially designed to boost weekly jobless aid by $US400, with states assuming 25% of the cost. But that prompted fierce blowback from many governors and state officials who said they couldn’t afford it. The administration then waived the cost-sharing requirement, saying states could use existing benefit payments to count as their match.
Few states are expected to pay the full $US400 weekly amount, given that many are grappling with plummeting tax revenue and soaring costs that have wrecked budgets. Only Montana and Kentucky have said they will distribute the full amount.
Earlier this month, negotiations between the White House and top congressional Democrats over another stimulus package fell apart over sharp disagreements on the amount of federal spending needed to keep the economy afloat.
Democrats sought to maintain the $US600 weekly unemployment benefit until January. Republicans sought to cut it to a $US200 bonus and later proposed a $US400 benefit until December; Democrats rejected it as insufficient.
The administration’s unemployment order could also leave out up to 1.5 million low-wage and part-time workers because of a provision mandating that people collect at least $US100 in weekly benefits.