We've gotten our first peek under the hood of Donald Trump's plan to cut enhanced unemployment benefits and replace them with smoke and mirrors. The Department of Labor released its guidance on the plan Monday, and right off the bat, the sham is exposed. The Trump payment, touted as $400 a week, is actually only $300—just half of what millions of jobless Americans have been receiving for the last several months.
States were supposed to come up with $100 a week to match the $300 from the federal government, but now the Labor department says that states counties count their current regular weekly unemployment payment, as their cost share requirement. The average weekly UI benefit, pre-$600 boost, was $371.88. Some states capped out at much less. Mississippi, for example, maxes out at $235. Some states pay as little as $15/week as a minimum benefit. It's unclear right now whether the 10% to 15% of claimants who make less than $100/week in UI would be eligible for the $300 federal match at all. They might be out of luck.
The department also said that states should use whatever they have left of their share of the $150 billion made available to them back in March to meet their share. That money was intended for direct coronavirus costs, and states have been clamoring for much more because they've all experienced major losses of revenue because of the pandemic and resulting economic downturn. They're asking for at least $500 billion to help save essential services.
A number of states still haven't dug out from the collective $19.7 billion in debt for UI they owe from the great recession. States that don't have enough funding in their UI trust accounts, held by the federal government, can borrow money from the Treasury to meet need. Right now, 18 states and 1 territory collectively owe nearly $20 billion from those loans. Now they're supposed to come up with more UI matching money? When they can't afford to pay for essential services?
Don't forget that this federal money is coming from FEMA, from the $44 billion in reserves for responding to national disasters, like wildfires and hurricanes which tend to hit, oh, like right now. That $44 billion is enough to cover about five weeks worth of UI payments to all the unemployed, the Committee for a Responsible Budget estimates. Then there's the part where states are supposed to completely reengineer their UI systems—AGAIN—to refigure this whole proposal. This in many states that only just now got their systems caught up to pay out the initial claims from March.
All this so Trump can force people back into the coronavirus-infected workforce and say that the economy is booming again.
