The Federal aid for the unemployed President Trump’s announcement last weekend is likely to be smaller than originally proposed – and it remains unclear when the money will flow, how long it will take, or how many workers will benefit from it.
The uncertainty comes at a delicate time for the economy. New applications for state unemployment benefits fell below a million last week For the first time since the March pandemic, the Ministry of Labor announced on Thursday. However, filings remain high by historical standards, and other measures show that the economy is losing momentum.
At the end of July, a government surcharge of US $ 600 per week was suspended for unemployment benefits to fight the pandemic. This has drawn away a major source of support, not just for the nearly 30 million Americans who receive benefits, but for the economy as a whole.
“Financial relief status is a big question mark hanging over the economy,” said Daniel Zhao, senior economist at Glassdoor, career site.
Mr Trump said Saturday that he was taking executive action to provide unemployed workers with additional payments of $ 400 per week on top of their regular state unemployment benefits. He did so after talks about a new round of pandemic aid that stalled in Congress.
The Senate adjourned Thursday through early September, and the House of Representatives had already left Washington. The departures put an end to virtually any chance of a swift deal to send business stimulus checks to American taxpayers, revive expired unemployment benefits, and allocate billions of dollars to schools, testing, childcare, small businesses, and state and local governments.
In the meantime, states are trying to figure out how to implement Mr. Trump’s plan. Unemployed people wonder if the money will arrive on time prevent permanent financial damage.
Here’s what we know about the program and how it will work.
The benefit is $ 300 for most workers, not $ 400.
When Mr. Trump announced the program known as Lost Wages Assistance, he said it would increase workers’ weekly unemployment checks by $ 400.
Unlike the earlier addition, which was funded entirely by the federal government, the program called for states to cut a quarter of the cost. Governors of both major parties resisted when asked to spend billions of dollars when tax revenues plummeted due to the economic collapse.
This week the administration offered new guidelines: instead of adding $ 100 per week on top of existing unemployment benefits, states could count the existing benefits towards their share. In other words, unemployed workers would get an additional $ 300, not $ 400.
States still have the option to provide an additional $ 100, but few, if any, are expected to do so.
“You are stretched,” said Andrew Stettner, a senior fellow at the Century Foundation who has studied the unemployment system. “They don’t have money to buy masks for the teachers in their schools. They probably won’t make an extra $ 100 for everyone who has unemployment insurance.”
The worst paid workers are not entitled to the extra money.
Under Guidance The new program, released Wednesday evening by the Department of Labor, is available to people who confirm they are “unemployed or partially unemployed due to disruption caused by Covid-19” – but only if they are already for at least $ 100 each Week qualify for unemployment benefits.
That provision would exclude approximately one million people, nearly three-quarters of them women, according to Eliza Forsythe, an economist at the University of Illinois.
“They are the people who need it most,” said Ms. Forsythe. “They were badly paid at first and then singled out because they didn’t get that benefit, I think that’s really cruel.”
It’s not clear why the $ 100 minimum was set. Mr. Trump noted the benefit under a federal disaster program that requires states to bear 25 percent of all costs. However, this rule applies to the entire program and not to individual recipients. For example, people who receive money through the Pandemic Unemployment Assistance program are entitled to $ 300 per week, even though this program is fully funded by the federal government.
It could take weeks for the money to flow.
Even for those who qualify, it can take weeks or even months to get additional cash. States must adapt to the new regulations if they are already overwhelmed by jobless claims.
It took months for some states to start paying benefits under the Pandemic Unemployment Assistance program, which extended benefits to independent contractors, the self-employed and others who were not part of the standard unemployment insurance system, partly due to archaic computer systems which are difficult to reprogram.
“We think it would take months,” William G. Kunstman, a spokesman for the Hawaiian Department of Labor and Industrial Relations, said in an email. He noted the difficulty of reprogramming the state’s computer system to meet federal requirements.
Even states with more modern computer systems said it could take weeks for the new addition to hit the market. Bill McCamley, secretary of the New Mexico Department of Workforce Solutions, said his state was one of the first to get the pandemic relief program up and running, but it still lasted nearly a month.
“Even in our system, which is very modern in the unemployed world, we will still need time to get it right,” he said.
Mr. McCamley also cautioned that a cloudy timeline could create further confusion and distress for those seeking the new benefit. After Mr Trump signed the $ 2.2 trillion bill on a Friday in March, his office returned to thousands of calls on Monday for help – though it would take about a month to see the new benefits and Optimize programs.
“The message went out that this was done and there was no simultaneous message that this was not done at the push of a button,” he said.
Trump administration officials claim the new program can be implemented faster as states gained experience during the pandemic. But even these officials say it will likely be weeks before workers get the money.
The money won’t last long.
The program is retroactive to August 1, which means workers should ultimately receive payments for the entire August.
But Mr. Trump’s executive action capped spending on the program at $ 44 billion, enough to cover five or six weeks of benefits, provided all states sign up. That said, the program could end almost immediately.
It’s still possible that Congress will either revive the original unemployment supplement – albeit likely less than $ 600 a week – or provide more money for Mr. Trump’s replacement.
But every deal seems far away. House Democrats voted in May to extend the $ 600 weekly boost to the end of the year as part of a $ 3.4 trillion stimulus measure, but Senate Republicans have refused to take up the bill . The $ 1 trillion proposal put forward by Republicans last month calls for an average surcharge of $ 200.
Democrats argue that a legislative solution is the only way to keep workers safe.
“The Department of Labor’s new guidelines leave many questions unanswered,” said Oregon Senator Ron Wyden, the top Democrat on the Senate Finance Committee, who helped negotiate the original $ 600 benefit. “Workers who struggle to pay rent and buy groceries will not see the benefits they were soon promised.”
The workers remain suspended.
For the unemployed, the uncertainty about benefits means not knowing when to pay off their credit cards or whether they can take out rent on September 1st. For those already struggling to get help from overwhelmed government employment offices, the prospect of further delays is even more frustrating.
David Moniz joined Sur La Table, the kitchen retailer in San Jose, California, in March as a chef. His timing was terrible: after spending a day at work, the store closed because of the virus. and he was on leave.
It took Mr. Moniz 29 weeks to call to go to the California Labor Office and file an unemployment claim. Then, after a few weeks, its benefits suddenly stopped. His file appears as “pending” on the state website and despite endless hours of calling, he was unable to resolve the issue. He hasn’t received a check since June 1st.
With no money coming in, Mr. Moniz has used up his savings and incurred debts. He had $ 28 left before reaching his credit limit and owed his Wells Fargo bank $ 200 in late fees and penalties.
“Wells Fargo calls me more than anyone in my family about my account,” he said.