- Nearly three weeks after Trump signed an executive order to boost unemployment benefits, only four states are paying the $ 300 federal supplement.
- Arizona, Missouri, Tennessee and Texas are already paying federal benefits and 32 states have been approved so far.
- “I think states really, really care that they implement this within the four corners of the law and I do not blame them,” said unemployment expert Michele Evermore.
- Visit the Business Insider website for more stories.
Nearly three weeks after President Donald Trump signed an executive order to promote unemployment assistance, states are slowly moving toward realizing the $ 300 federal supplement for unemployment benefits.
The federal government has approved a majority of states to set up the program. But only four states have started paying out the money so far: Arizona, Missouri, Tennessee, and Texas.
Each state has until September 10 to decide whether to implement the initiative, which is funded with $ 44 billion in funds for disaster relief from the Federal Emergency Management Administration. For most states, additional state aid will begin in mid-September or later, The New York Times reported.
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The slow rollout of the Lost Wages Assistance program underscores the lack of direct impact that the order had on helping millions of unemployed people now continue without the $ 600 federal unemployment benefit. It passed almost a month ago.
The Trump administration had taken the initiative as someone who could provide quick relief when Congress ran. Treasury Secretary Steven Mnuchin said on August 10 most states would be able to implement the plan within two weeks. But that term came and went with a few states distributing the federal cash to the unemployed.
“I would be incredibly nervous to take money with so little guidance that came out so quickly with so little caution,” said Michele Evermore, a policy expert at the National Employment Law Project, Business Insider. “I think states really, really care that they implement this within the four corners of the law and I do not blame them.”
She went on to say, “The worst thing that can happen is a bunch of benefits going out and then you find out you did it wrong and you have to do it again.”
Evermore and Andrew Stettner, a senior fellow at The Century Foundation, estimate that the program will provide about six weeks of assistance to the unemployed. Around 28 million people have unemployment benefits, which usually cover between 30% and 50% of lost wages.
State agencies have difficulty providing assistance as they process massive quantities each week. Now they have been asked to work with FEMA to set up a new system with additional rules and requirements about it.
Most unemployed workers are currently not receiving additional federal support
The number of applications for unemployment still regularly makes 1 million five months into the pandemic. On Thursday, the Labor Department reported last week 1.4 million people had filed for unemployment.
Ernie Tedeschi, a former economist in the Obama administration, said “week after week, the vast majority of unemployed workers do not receive unemployment insurance” for August.
“That means we missed the whole month between $ 60 billion and $ 70 billion in federal aid we received in July,” he told Business Insider, describing the impact of the order on boosting the economy as “so far marginal.”
Tedeschi estimates that the $ 300 supplement would provide 85% wage compensation for the average unemployed worker.
The measure was first designed to boost $ 400 weekly unemployment benefits with states assuming 25% of the cost. But that prompted fierce blowbacks from many governors and government officials who said they could not. The administration then waived the requirement to share costs, saying states could use existing benefits for payments to count as their match.
A few states are expected to pay the full $ 400 weekly amount each week, as many are struggling with tax revenues and hefty costs that have devastated budgets. Only Montana and Kentucky distribute the full amount.
Earlier this month, negotiations between the White House and top congressional Democrats over another stimulus package collapsed over sharp disagreement over the amount of federal spending needed to keep the economy afloat.
Democrats sought to retain the $ 600 weekly benefit until January. But Republicans initially sought to cut it to a $ 200 bonus. They later proposed a $ 400 benefit until December, which Democrats rejected as inadequate.
The administration’s unemployment plan could also lay off up to 1.5 million low-wage and part-time workers because of a facility that requires people to collect at least $ 100 in weekly benefits.
