Governors Balk at Trump’s Unemployment Benefits Order

Executive order to partially extend enhanced unemployment insurance requires states to fund 25% of extra benefits.

unemployment.may2020President Donald Trump on Saturday signed an executive order that extends additional unemployment payments of $400 a week to help cushion the economic fallout of the COVID-19 pandemic. Congress had approved payments of $600 a week at the outset of the public health crisis, but those benefits expired earlier this month and Congress has been unable to agree on an extension.

States typically calculate a person’s weekly benefit amount as some percentage of their pre-unemployment earnings, but those benefits are capped. Without any additional payments, the maximum unemployment benefit in Maryland is currently $430 per week.

Under the order, the federal government would allocate $44 billion in federal dollars from FEMA’s Disaster Relief Fund to fund $300 for the additional benefit and states would be required to cover the remaining $100. But states and local governments are already grappling with the fiscal ramifications of an economy badly battered by the coronavirus pandemic.

State revenues are plummeting and costs are rising sharply with many businesses closed and tens of millions of people newly unemployed. Revenue shortfalls across state and local governments are expected to collectively reach $1 trillion over the next few years.

According to Route Fifty:

New York Gov. Andrew Cuomo, a Democrat who chairs the National Governors Association, called the request for states to chip in for the extra benefits “laughable.” Under Trump’s proposal, he said it would cost New York $4 billion to pay the 25% portion of unemployment at the same time the state is facing a $30 billion budget hole.

“That’s handing the drowning man an anchor,” Cuomo said Monday.

The order requires states to pay the matching portion of the unemployment insurance costs in order to receive any federal funding. But, according to Route Fifty:

Trump said Monday morning that he was looking at a way to be flexible with states so those that were unable to contribute could still receive federal benefits.

“They’ll make an application, we’ll look at it, and we’ll make a decision,” he said. “So, it maybe they’ll pay nothing in some instances.”

Governors are also warning that the executive order may be difficult to implement for technical reasons, as many states struggled to update antiquated computer systems to accommodate the $600 payment, which along with the huge influx of new claims resulted in long delays in providing benefits. Reprogramming the computers again to accommodate the new amount could result in similar glitches.

Useful Links

Route Fifty: Governors Raise Concerns About Trump’s Unemployment Benefits Order

Previous Conduit Street Coverage: Sen. McCray: If Federal Relief Fails, Brace For State Cuts