Governors, lawmakers and state unemployment agencies on Monday wrestled with confusion created by President Donald Trump’s executive action extending unemployment benefits, and it appeared some states could settle for $300 a week in benefits instead of the $400 that the president touted.
State leaders from both political parties remained unsure how much they’d have to contribute to receive federal funding. With states already facing budget shortfalls and some unemployment systems ill-equipped to handle a new stream of federal cash, they also may be hesitant to accept benefits estimated by budget experts to last just weeks.
The multiple questions added urgency to calls for the Trump administration to reach a deal on coronavirus relief with congressional leaders, instead of relying on the president’s Saturday night memo.
The memo said the federal government would provide $300 per week in additional aid to unemployed workers if their states also contributed $100. But in guidance to states late Sunday obtained by States Newsroom, the U.S. Department of Labor said the federal government would provide the additional $300 per week to states with or without the state match, adding another layer of complexity.
“One big question is: Are states going to participate in it?” said David Super, a professor of administrative and constitutional law at Georgetown University’s law school. “I think most states won’t. I think many states will have difficulty doing it without approval from their legislatures, many of which have adjourned.”
Georgia government officials are still figuring out what to do, Gov. Brian Kemp said at a Monday press conference.
“We’re digging in on that issue,” Kemp said. “Personally, I appreciate the president’s action. We’ve all seen gridlock in Congress before a November election before, and I think that’s what’s happening now. So I certainly want to applaud the president for taking action to help hard-working American citizens as well as Georgians. What that looks like on the unemployment, our team’s talking to (Department of Labor) Commissioner Butler right now.”
It is uncertain how many Georgians could be eligible, said labor department spokeswoman Kersha Cartwright.
Anyone who earned at least $1 in state benefits was eligible for the program that expired in July, but under the new executive order, only those who receive $100 or more would qualify. Unemployed Georgians can receive a minimum of $55 per week, and the number of Georgians receiving between $55 and $100 was not immediately available, Cartwright said.
Also uncertain is the program’s price tag, said Georgia Budget and Policy Institute Senior Analyst Alex Camardelle.
“It is unclear how much the program will cost, but the (unemployment insurance) trust fund, which has decreased by 80% since March, cannot foot the bill — nor can the state, which saw a sharp revenue shortfall due to COVID-19,” Camardelle said. “The additional $600 benefit previously supplied by the federal government helped families make ends meet while shoring up state revenues in Georgia, but if this new (order) goes into effect, its lower benefits would deliver fewer gains while incurring new costs for the state. On the other hand, if the state does not request the program, hundreds of thousands of Georgians will be unable to make ends meet.”
In addition to the ongoing weekly cost to states, participating in the program would require many of them to overhaul unemployment computer systems at a time when states are facing dire financial situations.
National Governors Association Chair Andrew Cuomo, D-N.Y., and Vice Chair Asa Hutchinson, R-Ark., said in a joint statement that governors “appreciate the White House’s proposals to provide additional solutions to address economic challenges; however, we are concerned about the significant administrative burdens and costs this latest action would place on the states.”
The governors said the president should return to negotiations with Congress to provide more sustainable relief to states.
Labor Commissioner Mark Butler has often said the federal government placed an undue burden on states when it required them to create new systems to process Pandemic Unemployment Assistance claims for gig workers, independent contractors and others who did not previously qualify for unemployment benefits.
It does appear participating in this new program will require as much work, Cartwright said.
“We do not think at this time that this will be necessary. The GDOL is still awaiting clarification on the funding mechanism for this new benefit, but we should be able to quickly program the difference in supplement.”
White House press secretary Kayleigh McEnany said Monday that unemployed Americans should see the new benefits “quickly and close to immediately,” but “a lot of this will depend on states and them applying.” She noted that states can use funds from the CARES Act, the earlier federal coronavirus relief bill, for their contribution, and blamed Democrats for not continuing in talks to come up with a compromise.
“Within the next week or two, most of the states will be able to execute,” Treasury Secretary Steven Mnuchin said Monday night.
Brian Sigritz, the director of state fiscal policy at the National Association of State Budget Officers, said there were several outstanding questions about how the program would be administered.
Under the executive memo, federal funding would come from the Federal Emergency Management Agency’s Disaster Relief Fund. But that fund is typically paid out as a reimbursement, meaning states could be required to pay the money upfront.
The potential expense of the program would undercut other state initiatives, he said.
“States would have to choose between paying enhanced unemployment benefits, and directing funds to education needs such as safely reopening schools and providing for remote education, public health demands including testing and contract tracing, and economic support programs,” he said.
Several states and groups representing their interests in Washington said they needed more information before they could figure out what to do.
“It is still too early to tell what the impact of the president’s executive action will have on state unemployment,” said Zach Herman, a policy associate with the National Conference of State Legislatures. “States are still waiting on further guidance from the White House and the Department of Labor. Without further clarification from the Department of Labor and White House the impact is unclear.”
Marty Schladen contributed reporting.
Jacob Fischler is a national correspondent for States Newsroom.