Americans who are out of work found themselves “back to square one” because Congress did not extend the $ 600 weekly pandemic fees for pay that expired two weeks ago. In response, President Donald Trump said he would prevent the legislature with a very dubious executive action from repaying the payments at $ 400 a week.
When Trump announced the $ 44 billion program, he called it ‘generous’, blaming Democrats for lack of legislative action and China for the economic fallout that resulted from the health crisis (a recurring trope seen as tied to a rise in hate crimes against East Asians). His Treasury Secretary, Steven Mnuchin, said most states could implement the brand new program “within a week or two.”
But the checks can take weeks to end up in people’s bank accounts, if they arrive at all. And they may end up at just $ 300.
“I do not think so [people] can expect a lot from everything right away, ”said George Wentworth, the senior adviser to the National Employment Law Project, Gothamist.
The program renews the previous unemployment benefit program for Pandemic, and replaces it with a new one, called Lost Wages Assistance.
The Department of Labor would partner with the Federal Emergency Management Agency to direct up to $ 44 billion in emergency disaster relief funds through subsidy agreements.
Getting the federal government’s money to the states and into people’s bank accounts could last until at least September, especially as state-owned departments, including New York, saw outdated systems smeared under the early waves of applications from those who lost jobs because of the pandemic. States advised to address the increased demand for unemployment benefits, but the new program would call for a whole new system.
The Lost Wage Assistance Program would also include new application requirements that refuse workers who make less than $ 100 per week under regular unemployment insurance. That would prevent part-time workers from getting the federal incentive.
And that is if states choose to participate – under Trump’s plan, they would have to pay $ 100 out of the total payment of $ 400 – something that Governor Andrew Cuomo called “impossible” and “laughing.” Cuomo estimates that the cost to the state would be another $ 4.2 billion, while the state is already in a $ 30 billion two-year budget deficit with mass cuts to schools and health care.
In New York, those costs are “a very significant additional burden on the state budget that has already suffered,” said Jonas Schaende, chief economist at the Fiscal Policy Institute.
State employment agencies could use previously allocated federal COVID-19 funds to make up the $ 100, rather than just standard state unemployment benefits for that part. If the state chooses the latter, the additional payment would be $ 300.
Earlier this week, Cuomo speculated that the memorandum would be challenged in court.
“I think serious legal issues need to be challenged and no one will get anything and the situation will get even worse,” Cuomo said in a press release. “Your solution is costing me $ 4 billion? Thank you. That gives the drowned man an anchor.”
Trump’s program is expected to continue until December 27, when it will reach $ 44 billion. But Wentworth says that based on how many people previously collected benefits, the program would take about five weeks.
“The pandemic has really revealed what a crude form the nation’s unemployment insurance program is in,” Wentworth said. Adding another program with “dubious legal authority, not responsible for administrative costs, and new qualification rules” is irresponsible, he noted.
“It is unfair to increase the hope of unemployed workers that it will soon mean real assistance at any moment,” he said.
The State Department issued a statement referring to Cuomo’s earlier statements when he was asked if the department was proceeding with taking those federal funds, or as an opt-out.
In a message to people collecting benefits for unemployment, the New York Department urged the department to continue with certification weekly.
“We understand that there may be confusion following the President’s announcement about additional unemployment benefits. While open questions about this announcement have been resolved, please continue to certify weekly to ensure you receive your Unemployment Insurance (UI) benefits or Get Pandemic Unemployment Assistance (PUA), “the message says.
The National Governors Association, now president of Cuomo, urges Congress and the White House to pass a “quick resolution to provide immediate assistance to unemployed Americans,” saying the current proposal would place “significant administrative burdens and costs” on all cash-strapped states.
Trump’s program would expire if a deal was passed through Congress, the memo says. But negotiations between the administration and Congress do not go any further.
House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said Wednesday that the White House is “not bidding” on the size of a new incentive package. “Once again, we have made it clear to the Administration that we are ready to drop $ 1 trillion [to $2 trillion] if they will raise $ 1 trillion, “they said in a statement.
Mnuchin said Pelosi was “not ready to go ahead with negotiations unless we agreed in advance on her proposal, which would cost at least $ 2 trillion.”
While the leaders of the administration and Congress argue, roughly one-third of New York City workers have no jobs, higher than the typically used official estimate, according to a new report.
While the official unemployment rate in June was about 20.4 percent, nearly one-third (32.7 percent) of the city’s workforce had accumulated in February that month, according to a report by the New School’s Center for New York City. Affairs. The report calculated the higher unemployment rate by percentage of those who collect the city’s February labor force unemployment benefits – instead of a survey based on whether an unemployed worker was looking for a job in a given week.
Percentages out of work are higher in the Bronx (40.2 percent), Brooklyn (34.1 percent) and Queens (36.9 percent).
Economist James Parrott, who co-authored the report, called Trump’s action for those unemployed “for show.”
“As [Trump] were serious about what to do, he would have pressured his Republican colleagues to negotiate seriously with Democrats, and we would have an account, so [it’s] no serious proposal, “Parrott said.
Schaende, with the Fiscal Policy Institute, said waiting for another solution is not viable for the millions of unemployed who are in need now.
“Their own family budgets have just been significantly reduced, and so they can not meet their obligations like rent, car payments, food, etc. So that is not an abstract conversation,” Schaende said. “I do not think so [the decision makers] have the incentive to just sit there and wait until something new comes along. Even if the unemployed receive a reduced amount, it would still be possible to help them and their families maintain their consumption until something new is worked out. “
With reporting, Mirela Iverac of WNYC.
