- Nearly three weeks after Trump signed an executive order to boost unemployment aid, only six states are paying out the $300 federal supplement.
- Arizona, Louisiana, Missouri, Montana, Tennessee, and Texas are paying out federal benefits already and 32 states have been approved so far.
- “I think states are really, really making sure they’re implementing this within the four corners of the law and I don’t blame them,” unemployment expert Michele Evermore said.
- Visit Business Insider’s homepage for more stories.
Nearly three weeks after President Donald Trump signed an executive order to boost unemployment aid, states are moving slowly to implement the $300 federal supplement to unemployment benefits.
The federal government has approved a majority of states to set up the program. But only six states started paying out the money as of Friday morning: Arizona, Louisiana, Missouri, Montana, Tennessee, and Texas.
Each state has until September 10 to decide whether to apply for the initiative, which is financed with $44 billion in disaster relief funds from the Federal Emergency Management Administration. For most states, additional government aid will start going out in mid-September or later, The New York Times reported.
The slow rollout of the Lost Wages Assistance program underscores the lack of immediate impact that the order had on aiding millions of unemployed people who are now getting by without the $600 federal unemployment benefit in 44 states. It expired nearly a month ago.
The Trump administration had touted the initiative as one capable of providing speedy relief as it sidestepped Congress. Treasury Secretary Steven Mnuchin said on August 10 most states would be able to execute the plan within two weeks. But that deadline came and went with few states distributing the federal cash to the jobless.
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“I would be incredibly nervous to take money with so little guidance that came out so fast with so little forethought,” Michele Evermore, a policy expert at the National Employment Law Project, told Business Insider. “I think states are really, really making sure they’re implementing this within the four corners of the law and I don’t blame them.”
She went on: “The worst thing that can happen is a bunch of benefits go out and then you find out you did it wrong and you have to redo it.”
Evermore and Andrew Stettner, a senior fellow at The Century Foundation, estimate the program will provide about six weeks of aid to the unemployed. Around 28 million people are on unemployment benefits, which usually cover between 30% and 50% of lost wages.
State agencies have struggled to deliver aid as they process massive amount of claims each week. Now they’ve been asked to work with FEMA to set up a new system with additional rules and requirements governing it.
Most unemployed workers have no additional federal support at the moment
The number of jobless claims still regularly tops 1 million five months into the pandemic. On Thursday, the Labor Department reported 1.4 million people filed for unemployment last week.
Ernie Tedeschi, a former economist in the Obama administration, said “week to week, the vast majority of unemployed workers are not receiving any emergency unemployment insurance” for August.
“That means we missed out for the entire month between $60 billion and $70 billion in federal support that we got in July,” he told Business Insider, describing the order’s impact on boosting the economy as “marginal so far.”
Tedeschi estimates the $300 supplement would provide 85% wage replacement for the average unemployed worker.
The measure was initially designed to boost weekly jobless aid by $400 with states assuming 25% of the cost. But that prompted fierce blowback from many governors and state officials who said they couldn’t afford it. The administration then waived the cost-sharing requirement, saying states could use existing benefit payments to count as their match.
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Few states are expected to pay the full $400 weekly amount, given many are grappling with plummeting tax revenues and soaring costs that have wrecked budgets. Only Montana and Kentucky are distributing the full amount.
Earlier this month, negotiations between the White House and top congressional Democrats over another stimulus package fell apart over sharp disagreements on the amount of federal spending needed to keep the economy afloat.
Democrats sought to maintain the $600 weekly unemployment benefit in place until January. But Republicans initially sought cutting it to a $200 bonus. They later proposed a $400 benefit until December, which Democrats rejected as insufficient.
The administration’s unemployment order could also leave out up to 1.5 million low-wage and part-time workers due to a provision mandating people collect at least $100 in weekly benefits.