Meanwhile, President Trump’s executive memo on expanding unemployment insurance demanded $ 400 … [+]
On Wednesday, the Department of Labor (DOL) published a letter for unemployment insurance programs to state agencies giving guidance on how to manage the expansion of federal unemployment benefits, technically known as Lost Wages Assistance (LWA), which President Trump announced on the weekend. The main paragraph of the letter confirms that eligible Americans are only allowed to receive an $ 300 per week LWA payment, not the $ 400 that Trump had promised when he issued the executive memorandum.
Federal Unemployment Benefit and Wage Loss Assistance
Millions of unemployed Americans were urgently held during the coronavirus pandemic by the establishment of a $ 600 weekly federal unemployment benefit included in the CARES Act. The benefit expired at the end of July and has been one of the main sources of friction as Democrats and Republicans negotiate the next coronavirus stimulus package. With the negotiations halted, Trump turned to executive guidelines, and last Saturday issued four actions aimed at tax cuts, student loans, evictions, and unemployment benefits.
On unemployment benefits, Trump announced the creation of the LWA program, claiming it would offer $ 400 in additional weekly funds; the federal government would cover $ 300 and states would need an additional $ 100. “I take action to provide an extra or an extra $ 400 per week in extended benefits: $ 400. Okay? ” he said. “States will be asked to cover 25 percent of the costs using existing funding, as well as the tens of billions of dollars they make available through the Coronavirus Relief Fund. Under this plan, states will be able to offer greater benefits if they so choose, and the federal government will cover 75 percent of the cost. That we are all set up. It’s $ 400 a week, ”he added.
White House offers multiple, varying interpretations
Almost immediately, there was a two-part blowback from state leaders over their required incremental contributions. State budget deficits are expected to reach $ 555 billion, according to the Center for Budget and Policy Priorities, and many argue that funding an additional $ 100 was impossible. As a result, White House officials began adapting the LWA proposal.
On Tuesday, White House National Economic Council Director Larry Kudlow suggested that states not have to set up incremental funds to qualify unemployed Americans for the $ 300 federal benefit. “We’ve changed the mechanics of the deal a bit,” he said. Kudlow. “By Tuesday night, at least five conflicting versions of this parallel benefit system had been communicated by several Trump officials, according to a running count from Georgetown law professor David Super,” Catherine Rampbell of The Washington Post. For individuals who had not received federal unemployment benefits for about 20 days, as well as for states that had to quickly make up and manage the benefits, the lack of consistency was frustrating.
Department of Labor Guidance Provides clarity
With so much confusion, the letter from the Department of Labor provides much-needed clarity on how the Lost Wages relief program will work. It will help states with technical assistance to manage the program and provide some visibility to the millions of unemployed Americans about how much they can expect to receive in additional funds.
While clarity is welcome, some may be disappointed by the guidance provided by the DOL letter. It includes a clause that frees states from the obligation to provide an incremental $ 100 in unemployment benefits to receive the $ 300 federal contribution. “States can count funds that are already being used to provide regular UI payments for the state after the state game. If they choose, insurers will be eligible to receive a $ 300 LWA payment from the federal government in addition to their weekly benefit amount, “the letter states.
The letter goes on to note that states may meet the $ 100 per claimant per week state contest with the regular payments they make for state insurance benefits. It recognizes that if states go this route, “eligible claimants will only receive a $ 300 LWA payment in addition to their weekly benefit amount.”
In short, the DOL makes it clear that states can provide the $ 100 in incremental funds, but that it is not mandatory. In reality, this means that Americans should only receive $ 300 a week for the duration of the Lost Wages Assistance program and not count on the extra $ 100 of states that provide solid state budget deficits.
The Upshot
The DOL letter is a Rorschach blob that could have been interpreted differently by a politically polarized electorate. Some Americans may see the $ 300 as better than the zero dollars in federal unemployment benefits they currently receive, given the logjam in incentive relief negotiations and 50 percent more than the $ 200 First Chamber Republicans had initially proposed in the HEALS Act. Others may see it as a 50 percent reduction in the $ 600 federal benefits they received by the end of January, a 50 percent reduction in the $ 600 proposed by House Democrats in the HEROES Act, and a 25 percent reduction. percent of the $ 400 that Trump had promised less than a week ago.
Further related reading:
White House modification could cut another $ 100 before the $ 400 unemployment benefit even begins
Will the $ 400 unemployment expansion begin soon? Do not count on it, despite Trump’s executive order
Only way to second control of stimulus, real expansion of unemployment benefit runs through Congress
Trump signs executive orders: extends federal unemployment benefits to $ 300 a week, protects against benefits, pushes student loan payments, raises tax rates
McConnell: Stimulus package could pass ‘weeks’
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