President Donald Trump has signed an executive memorandum authorising an extra $400 in weekly unemployment insurance benefits.
The apparent lifeline, signed over the weekend, to those impacted by unemployment in the pandemic comes as the nation surpasses five million coronavirus cases and millions of Americans continue claiming unemployment benefits.
Mr Trump’s efforts to partially restore the supplemental benefits for jobless workers, which expired late last month, come with a number of restrictions and requirements.
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The president said he is “directing the Federal Emergency Management Agency (FEMA) to assist in providing benefits from the Disaster Relief Fund (DRF)” and “calling upon the States to use their Coronavirus Relief Fund allocation, to bring continued financial relief to Americans who are suffering from unemployment due to the Covid-19 outbreak”.
What are the new temporary benefits and when and how could Americans expect to access them?
Who will qualify for the extra $400?
To be eligible for the extra insurance, claimants will need to receive, for the week lost wages assistance is sought, at least $100 per week of unemployment benefit.
“It appears if you are getting state unemployment benefits that are at least $100, you should be able to get that $300 on top, even if your state can’t put up the additional $100,” Andrew Stettner, senior fellow at The Century Foundation, a progressive think tank, told CBS News.
This does mean that low-paid workers such as waiters and gig economy workers such as independent contractors and temporary workers might not qualify for higher unemployment payments.
“It’s affecting those at the bottom of the income spectrum, or in the gig economy,” Mr Stettner said. “They have the least to get by — and won’t get anything.”
When will I be able to receive them from?
Mr Trump says that to eligible claimants from the week of unemployment ending 1 August 2020.
However, because states need to build a new system to administer the money, experts have warned that workers may not see any money straight away and it could be September before certain areas can distribute funds.
“We’re lucky if anyone gets this money in August,” Mr Stettner told the broadcaster. “It’s more likely to be in September at the earliest.”
Treasury Secretary Steven Mnuchin said on Monday that he expects most states to administer the extra benefit by the end of August.
“Within the next week or two, most will be able to execute,” Mr Mnuchin said, during a White House press briefing.
How long will it last?
Mr Trump’s order would utilise $44 billion from the nation’s DRF to provide the extra insurance.
Raymond James analyst Ed Mills told CBS News that this amount of money is expected to be enough to last four or five weeks.
What are the problems with funding?
The memorandum directs that the federal government will provide $300 in additional aid and the states will contribute another $100.
However, many state officials have already said that states can’t afford to pay the extra 25 per cent of unemployment costs due to a loss of tax revenue as a result of the pandemic.
“That is the tragedy — workers are expecting to get this because the president promised it to them,” Michelle Evermore, senior policy analyst at the National Employment Law Project, an advocacy group, told the outlet.
“It’s going to be a real challenge for states to say they can get this up and running.”
States reportedly have another option of counting ”their existing unemployment insurance (UI) weekly benefit payments from state funds” towards their $100 contribution, a memo viewed by CBS MoneyWatch said.
“We are concerned about the significant administrative burdens and costs this latest action would place on the states,” New York governor Andrew Cuomo and Arkansas governor Asa Hutchinson, the chair and vice-chair of the National Governors Association, said in a statement on Monday.
Mr Cuomo also called the directive ”impossible” in a tweet on Sunday.
“Executive Orders can’t replace legislative actions,” he wrote. ”States can’t pay 25 per cent of unemployment costs. It’s simply impossible.”
California governor Gavin Newsom echoed the same sentiments at a news conference on Monday saying “there is no money sitting in the piggy bank” for the state to put forward for the extra $100.
“It simply does not make sense,” he said.