During a press conference yesterday, President Trump was asked for a timetable for when the $400 weekly unemployment benefit would begin. The question relates to the executive actions Mr. Trump took over the weekend. As we’ve already covered, those actions included enhanced unemployment benefits.
The enhanced unemployment benefits were part of a memorandum Mr. Trump issued to the Department of Labor, the Department of Homeland Security (DHS), and the Federal Emergency Management Agency. The memorandum called for an “Assistance Program for Lost Wages.” Specifically, it directed DHS to approve the lost wages program authorizing states to provide $400 per week to eligible unemployed individuals.
The memorandum provided that the federal government would contribute $300 of this amount. The remaining $100 would come from the states. The big question has been when will these benefits begin.
When Do Benefits Begin?
According to the memorandum, the benefits begin the week ending August 1, 2020. Thus, benefits would be retroactive to that date. Still, many are wondering when they will begin to receive the actual payments.
In the press briefing yesterday, Mr. Trump was asked about a timetable as to when the unemployed can expect to start receiving these benefits. Treasury Secretary Steven Mnuchin, who attended the press briefing, responding saying, “within the next week or two, most of the states will be able to execute.” States must make changes to their unemployment insurance systems, and this takes time.
To qualify for the $400 unemployment payment, a claimant must have received at least $100 in the applicable week from state unemployment insurance or other specified unemployment benefits. The White House has explained that this limitation is to prevent “fraud and abuse.”
Can States Afford to Contribute?
Another question that has arisen is whether the states have the money to contribute their $100 portion. The memorandum provides that states can use funds from the Coronavirus Relief Fund (CRF). The CARES Act provided $150 billion directly to the states through the CRF. As of the latest report from the Treasury, more than $80 billion remains in the fund.
Notwithstanding the CRF, many states have expressed concern over their ability to fund this relief. In Ohio, Governor Mike DeWine said that Ohio unemployment claimants would received the $300 federal assistance. Ohio is looking into providing the additional $100 state contribution. Ohio law requires a balanced budget, making it unclear if lawmakers could find the funds to add the extra $100.
In contrast, New York Governor Andrew Cuomo was not receptive to the plan. “We started with a $30 billion hole, and your solution [will] cost me another $4 billion? Thank you,” Cuomo said. “That’s handing the drowning man an anchor. Hold on to this.”
The White House has said that states can submit an application to have the federal government cover the state’s share.
How Long Do The Benefits Last?
The $400 benefit is set to expire no later than December. More specifically, it continues “until the balance of the [Disaster Relief Fund (DRF)] reaches $25 billion or for weeks of unemployment ending not later than December 6, 2020, whichever occurs first, at which time the lost wages assistance program shall terminate.” The DRF currently has about $70 billion. According to some estimates, this is sufficient to fund four to five weeks of enhanced unemployment benefits.
In addition, the enhanced unemployment benefit will automatically expire upon the “enactment of legislation providing, due to the COVID-19 outbreak, supplemental Federal unemployment compensation, or similar compensation, for unemployed or underemployed individuals.” Negotiations on such legislation are at a standstill.