Most states have not asked to participate in President Donald Trump’s proposal to replace the extra $600 unemployment benefit that lapsed amid congressional dithering last month with a smaller “lost wages assistance program.”
Democrats pushed to save the $600 supplemental benefit as part of a bigger coronavirus relief bill, but Republicans disagreed with the amount, both for the benefits and for the overall pandemic response.
So Trump took executive action, inviting states to set up “lost wages assistance” programs that the Federal Emergency Management Agency would pay, using money that Congress previously appropriated for disasters.
In his announcement, the president said he was giving the unemployed an extra $400 per week, but it turns out the federal government is only offering $300. And because it’s technically disaster assistance rather than unemployment compensation, states have to figure out how to pay the benefits without imposing costs on their regular unemployment programs ― meaning it could be administratively difficult to do so.
Trump’s move seemed designed to spur negotiations on Capitol Hill, but talks between Democrats and his administration remain stalled as the coronavirus keeps spreading and the economy teeters on the brink of a double dip recession. At least 25 million people had been receiving the extra $600, which helped prop up the economy from April through July.
Rep. Don Beyer (D-Va.), a member of the House committee that oversees unemployment, said the details of Trump’s plan keep getting worse.
“They claimed benefits would arrive ‘immediately,’ then said it would be a week or two, and now admit unemployed workers will see a lapse of a full month from late July if not longer,” Beyer said. “This is no substitute for a real economic aid package ― the White House must get serious about providing real relief to American families, these gimmicks and half measures will not suffice.”
The original memorandum implied states would have to contribute $100 on top of the $300 payment from the federal government ― an obligation New York Gov. Andrew Cuomo (D) called “simply impossible.” The administration quickly clarified that states didn’t actually have to add the extra money, but states still aren’t rushing to sign up.
So far, only seven states have said they’ll try to pay the lost wages assistance, according to FEMA, which said Sunday that it had approved Colorado, Missouri and Utah after having previously approved Arizona, Iowa, Louisiana and New Mexico.
Spokespeople for the U.S. Labor Department, which is overseeing the program, did not immediately respond to a request for more information about how many states are signing up.
For states that do try to pay lost wages assistance, it will take an average of three weeks for people to see the money, according to a “Frequently Asked Questions” document that FEMA posted Sunday.
Matt Bessler of Puyallup, Washington, said that since the extra $600 expired, he and his wife have been receiving just $324 per week in state benefits on top of her income as a DoorDash driver. They had managed to save more than $2,000, but then had a car problem put them out $1,700. They had to pay August’s rent a week late. Now, the laid-off technology salesman said he’s “freaking out” about how they are going to survive on the reduced income.
Bessler, 41, said relevant job openings he’s been able to find pay only a little more than unemployment, but with the additional risk of catching the coronavirus. He feels that there are economic and health crises swirling around him.
“I didn’t ask for this, it all just found me,” Bessler said.
It seems unlikely that the lost wages assistance program will find him. An alert on the Washington state Employment Security Department’s website simply says that the state is assessing the program. “When we have additional information, we will update claimants on our website, our social media platforms, and directly via claimant communications,” the alert says.
One state has outright refused to run the lost wages assistance program. South Dakota governor Kristi Noem (R) said in a tweet that while she was “very grateful” to the president’s offer, “South Dakota is in the fortunate position of not needing to accept it” due to the state’s strong economy.
The unemployment rate in South Dakota is 7.2%, which is below the national average but still higher than at any time in state history going back to 1976.
Trump said Monday he still wants to work with Democrats on a coronavirus bill, but disparaged their demands that the legislation include money to help states fill budget gaps to avoid layoffs.
“We will work with them, but we want money to go to the people that need it, and they don’t want to do that,” he said. “They just want to take care of the bailout money. They want bailout money to go to their friends that are doing a bad job running Democrat states.”