States will have to create a new system to pay out the unemployment benefits provided by President Donald Trump’s latest executive action, and that could leave the 28 million unemployed Americans waiting weeks to see the additional $300 payments.
Trump’s plan diverts disaster relief money from the Federal Emergency Management Agency to pay for the new benefit, which is different from the now-expired $600 weekly federal boost approved this past March by Congress. Because the money is coming from a different pool, it’s subject to different rules – and needs its own process.
“It would have to be created from scratch and run parallel with Pennsylvania’s existing unemployment benefits programs,” said Penny Ickes, the communications director for the Pennsylvania Department of Labor and Industry, in a statement sent to CNN.
“This is not something that any state will be able to do quickly,” she added.
Eligibility rules changed, too, under the executive action. It excludes people receiving less than $100 a week from their state’s existing unemployment benefits. It also provides just half of what jobless Americans had been receiving.
If Congress had extended the pandemic relief program it approved in March, it would have been a more seamless process for the states – though still harder than a flip of the switch. But talks over a new stimulus deal have stalled, allowing the federal $600 weekly boost to unemployment benefits expired July 31. Some people received their last check nearly three weeks ago.
Trump administration officials have said states will be able to get the new system up and running within two weeks, but some experts are skeptical.
“I don’t think anyone will see this money in August,” said Andrew Stettner, a senior fellow at The Century Foundation, a progressive think tank.
A limited pool of money
Trump’s executive action allocated $44 billion to the new unemployment benefit, an amount that could last just six weeks if all states participate in the program given how many people remain out of work thanks to the pandemic.
At first, the Trump administration said states were required to chip in 25% of the new $400 a week benefit. Many states, already facing budget shortfalls, said they wouldn’t be able to come up with the money. The National Governor’s Association said states would bear “significant administrative burdens and costs.”
But subsequent guidance from the Department of Labor clarified that states can count their existing payments toward their $100 match. That would effectively limit the total federal boost to just $300.
Still, states are looking for further clarification about what is required of them and how the program should be implemented.
“As soon as we get confirmation on what Mississippi will be required to do as a state, we will make it public,” said a spokeswoman for the state’s Department of Employment Security on Wednesday.
Ohio Republican Gov. Mike DeWine said at a press conference Tuesday that if the $300 is the final proposal from the administration “then we want to get that money out to people as fast as we can.”
A spokesman for the Ohio Department of Jobs and Family Services did not respond to a CNN request asking for how long that would be.
States took weeks to set up the first round of programs
Many states were overwhelmed by the unprecedented number of people filing for unemployment when the pandemic forced businesses across the country to shut down. Millions of people waited for weeks to start receiving the money. It took some of them months to stand up another program created by Congress that provides benefits to gig workers and the self-employed, who aren’t traditionally eligible.
That program was in many ways more straightforward than the one states will have to stand up for the latest benefit, said Indivar Dutta-Gupta, a law professor and co-executive director at the Georgetown Center on Poverty and Inequality.
“The thought of them doing it in two weeks is kind of unbelievable,” he said, noting that some states may end up paying the new benefit to people as one lump sum.
Pandemic vs. hurricanes
Hanging over Trump’s new system is the risk of taking money away from FEMA that is designated for other kinds of disasters.
“We’re entering whats predicted to be a pretty active hurricane season. This could have serious consequences down the line,” said Isabel Soto, the labor market policy data analyst at the American Action Forum.
Both Republicans and Democrats have proposed extending the unemployment benefit that expired at the end of July, but they differ on how much that payment should be. Republicans want to cut it from $600 to $200 until states implement – yet another new system – that replaces roughly 70% of laid-off workers’ wages. The supplement would expire December 31. A bill passed in the House, controlled by Democrats, in May would continue the $600 enhancement into early next year.
CNN’s Rebekah Riess contributed reporting.