The extra $ 400 in weekly unemployment insurance benefits President Donald Trump has authorized can not provide as much of a financial lift as millions of unemployed Americans can hope for. Although his executive order would extend payments through Dec. 6, federal funding for the claims is likely to run much sooner.
That’s because most of the extra benefits would be funded by $ 44 billion in disaster relief funds, an amount that would probably be exhausted within four or five weeks, given the legions of unemployed adults who need assistance. are, according to Raymond James analyst Ed Mills. A Labor official told the Wall Street Journal that it expects the funds to be withdrawn within five to six weeks.
It also remains unclear when the additional benefits promised by Mr. Trump – who experts say are critical in easing financial burdens for many Americans – would begin to reach unemployed workers. Unemployment for unemployment say it could last for weeks, perhaps until September, for the help of banking in bank accounts.
The Labor Department official offered a more optimistic timeline, telling the Journal that unemployment benefits could begin to reach unemployed workers within a few weeks. The agency did not respond to requests for comment.
Dry in mid-October?
If the extra $ 400 in weekly unemployment benefits starts at the beginning of September, it could run out by mid-October, based on those estimates. The potentially short duration of additional support for the unemployment of Mr. Trump underscores the need for congressional action to extend longer-term unemployment benefits, experts say. Since April, which expired in July, an additional $ 600 in weekly assistance had helped millions of unemployed Americans pay for basic necessities such as rent and groceries.
Without an expansion of that $ 600 in weekly benefits, the nation would likely witness a spike in evictions and food insecurity, according to a survey of economists by the University of Chicago Booth School of Business.
“Of course, getting the money will be useful, but the downside is that it is not a substitute for an expansion of the [weekly $600] federal program, “said Andrew Stettner, senior fellow at The Century Foundation, in a progressive think tank.” We hope it does not distract from the will of Congress to negotiate on “an extension of an advantage in the longer term.
Some workers could get less
Some workers may not get the full $ 400 promised by Mr. Trump. That’s because the aid consists of $ 300 in federal funding – the money raised from FEMA’s Disaster Relief Fund – and $ 100 from each state. But the Department of Labor said in a memo that states can count their “existing unemployment insurance (UI) weekly benefit payments from state funds” for their $ 100 contribution.
Translation: Unemployed workers in states without the financial means to pony up an extra $ 100 could end up with their regular support for the unemployed as much as $ 300 from Mr. Trump – just an extra $ 400.
“We took pressure from states – [they] do not have to earn $ 100, “White House adviser Larry Kudlow advised reporters on Wednesday.
No state has yet said it would offer the extra $ 100, according to the Journal. States are already facing a collective shortfall of $ 555 billion by 2022 due to the fiscal impact of the coronavirus pandemic.
That means many states are likely to choose to pay an extra $ 100 in unemployment benefits, according to Wesley Tharpe, deputy director of state policy research at the Center for Budget and Policy Priorities.
Tumbling off the income cliff
This means that these additional weekly benefits are likely to decrease from $ 600 in additional assistance to $ 300. Unemployed workers who qualify for their regular state unemployment benefits would continue to receive them, but will typically be replaced. one third to less than half of an income of an average worker.
Unemployed Americans have told CBS MoneyWatch they need the extra unemployed pay to keep themselves afloat during the pandemic, saying their benefits for state unemployed people are not enough to cover hair and groceries. People also report finding work, with one person describing the job search as a “”black hole. “
The decline in unemployment benefits “still represents a large fiscal cliff, with unemployed individuals losing about 25% of their income in August,” Oxford Economics senior U.S. economist Lydia Boussour said in a report this week. “Furthermore, although the benefits are described to last until the end of the year, appropriate funds would only last about five weeks.”
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