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Extra Unemployment Payments Are Unlikely Until After Labor Day


Extra Unemployment Payments Are Unlikely Until After Labor Day

A plea for help is written on the mailbox of the home of Carmen Ramos, a recently furloughed employee of Disney World in Kissimmee, Fla. Due to delays in stimulus negotiations, extra unemployment payments from the federal government aren’t likely to be issued until after Labor Day. John Raoux/ AP Photo

Here’s the hard truth: Extra unemployment payments from the federal government aren’t likely to be issued until after Labor Day.

After lengthy negotiations among the White House, the Treasury Department and lawmakers, there’s still no viable deal on a second stimulus package, which is expected to include additional aid to those who lost their job due to the pandemic.

And now Congress is on recess until Sept. 8, the day after Labor Day.

To try to plug the gap, on Aug. 8, President Trump issued a set of executive orders — including one that ostensibly provides $400 a week in unemployment aid.

In theory, that money could help the estimated 30 million unemployed Americans who were relying on Federal Pandemic Unemployment Compensation, the $600-per-week boost, when it expired July 31.

In reality, the complexities involved in getting those payments into people’s bank accounts mean there’s no realistic chance that jobless Americans will see any new relief for weeks.

What’s Coming in the Next Relief Package

Like the CARES Act, this next stimulus bill will be expansive, and is expected to include extensions to unemployment payments, another stimulus check and several other relief measures for businesses and workers.

The House of Representatives passed a bill in May that kept the $600 weekly boost in place and extended the time frame until 2021. But that bill was dead on arrival in the Senate.

The Senate set a self-imposed deadline to have an agreement on the second stimulus package ready to go by Friday, Aug. 7, before its recess. They missed that deadline, too.

Even if lawmakers immediately agreed on a proposal, it would still need to be voted on in both the Senate and the House and signed into law by the president. Then, state unemployment agencies would have to scramble to implement it. According to unemployment policy experts, that will also take time.

“To get [enhanced payments] started back up again, it may take a while to reprogram,” Michele Evermore, senior policy analyst at the National Employment Law Project, recently told CNBC. “I’ve been told that even in states with modernized systems, it could still take weeks.”

Millions of jobless Americans must now make do with reduced unemployment payments, as lawmakers are deadlocked on deciding how much the weekly unemployment boost should be and for how long it should last.

State unemployment offices issued the last round of boosted weekly payments July 26.

Without the $600 federal boost, subsequent unemployment payments will remain significantly lower until an agreement is made.

For example, Unemployment Insurance recipients in Louisiana, the state with the lowest average payments, are receiving only $182 per week, a 76.7% decrease from just a couple weeks ago. Hawaii, the state with the highest weekly unemployment payments, currently pays $456 on average. Hawaiians are coping with a 56.8% decrease in weekly payments.

Recipients of Pandemic Unemployment Assistance are receiving much less: half of their state’s average UI payment — meaning average payments vary between $91 to $228 per week, depending on the state.

Why Isn’t the New $400 Benefit Coming Now?

Trump said his order would create “an extra $400 per week in expanded benefits.”

But the plan actually provides only $300 a week, paid for with federal money. States would have to kick in the other $100, and the economic toll of the pandemic has left many states cash-strapped.

A White House official told the New York Times that states can use the benefits they’re already paying to meet that criteria. A notable caveat: Americans who currently get less than $100 a week from their states would get nothing under Trump’s order.

There’s more. Trump’s plan uses disaster money from the Federal Emergency Management Agency, a total of about $44 billion. At the current rate of unemployment claims, those funds would run out in five or six weeks.

Andrew Stettner, a senior fellow at the Century Foundation, told the Times: “Nobody is going to see this money in August, and we’ll be lucky to see it in September.”

Adam Hardy is a staff writer at Codetic. He covers the gig economy, entrepreneurship and unique ways to make money. Read his ​latest articles here, or say hi on Twitter @hardyjournalism.

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