Americans might face a long wait for the COVID economic relief Trump promised
Unemployed Americans hoping for additional help from the government might have to wait weeks for it, if they ever get it at all, as governors say they are unsure whether and how they can implement the plan President Trump outlined in his proclamation of an executive order extending supplemental benefits, which expired at the end of July.
On Saturday, after the White House and congressional Republicans were unable to come to an agreement with Democrats on a new COVID-19 relief deal, Trump signed an executive order that would extend supplemental benefits at the reduced rate of $400 per week instead of the $600 extra benefit included in the virus relief deal passed in March.
Initially, the administration seemed to cap the federal contribution at $300, but only if the states contributed $100 of their own. A number of governors who are dealing with budget crises amid the pandemic called the program “unworkable.”
“States are going broke and millions of Americans are unemployed, yet the solution calls for states to create a new program we can’t afford to begin with and don’t know how to administer because of this uncertainty,” New Jersey Gov. Phil Murphy, a Democrat, said Monday. “I cannot sit here right now and say New Jersey could afford to participate in this program.”
Related: Who CARES about the unemployed? How COVID benefit bill died in Senate
On Monday, as confusion over the details of the program swirled, the Department of Labor began telling state governments they didn’t have to kick in any money. Trump seemed to confirm that during a White House briefing.
“We just had a meeting with the governors, and they were very anxious to get money for the people in their states,” Trump said Monday. “We can terminate the 25 percent, or we don’t have to do that. So we will see what it is — depends on the individual state — but a lot of money will be going to a lot of people very quickly.”
If cash-strapped states don’t kick in the extra $100 advised by Trump, the unemployed would be paid only half as much of an extra benefit as they were receiving up until this month. Those receiving less than $100 per week will not receive the additional benefits and it’s unclear whether gig-economy workers and independent contractors will be eligible. Additionally, the entire program could still face legal challenges.
A spokesperson for Ohio Gov. Mike DeWine, a Republican, has already said the state would not be contributing any money beyond the federal benefits.
The $44 billion allocated for unemployment comes from the Department of Homeland Security’s Disaster Relief Fund, which is normally used to handle natural disasters like hurricanes, tornadoes and wildfires. If every state were able to distribute the money and unemployment rates didn’t dip considerably, the benefits would run out in roughly six weeks.
There are also doubts about implementing the new system, which will require coordination among dozens of different antiquated computer systems, a problem that delayed the initial CARES Act benefits. White House economic adviser Larry Kudlow said Tuesday that he expects the benefits to go out in two weeks, but experts have expressed skepticism about the timeline.
“I have no idea how people could possibly get checks in a couple of weeks,” Michele Evermore, an unemployment expert at the National Employment Law Project, told Yahoo News. “That is completely impossible. First, FEMA and [the Department of Labor] Employment and Training Administration have to issue guidance on how this works. Then states have to enter into agreements with agencies. Then, they have to set up a separate administrative system to pay these benefits because state unemployment insurance systems cannot pay benefits that aren’t congressionally authorized unemployment benefits, as this is a whole other kind of benefit.”
“Then, they have to program antiquated technology to pay the benefits, and then they can start paying. It took states well over a month to set up systems to pay out the new Pandemic Unemployment Assistance, and that is a benefit based on an unemployment benefit that has been around for 45 years (Disaster Unemployment Assistance). States have never had to do something this different from base benefits, especially on the fly during a pandemic when they are already paying record numbers of new claimants and dealing with an international fraud ring and complicated new guidance about another new program that they had to quickly set up.”
Politico reported Tuesday that no stimulus deal is expected soon because White House chief of staff Mark Meadows, a key negotiator, is “out for the week” and because Trump believes the weekend signings have given him the political upper hand.
Of the other three declarations Trump signed, only one is assured to actually help. Trump has ordered the Department of Education to waive all interest payments on student loans owed to the federal government and allow deferrals through the end of the year. His attempt to defer the payroll tax is complicated by the fact that many businesses are likely to continue to withhold it. Because it is just a deferral on the collection of the tax and not a cancellation, businesses would still have to pay it at the end of the year. Trump has said he could make the deferrals permanent, although that would mean less money for future Social Security benefits. Also, people who are unemployed don’t pay Social Security tax anyway, and they aren’t helped by a deferral.
Trump’s final memorandum, on housing assistance, calls for the Department of Health and Human Services to “consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary” but doesn’t put in place an eviction moratorium.
In response to a question at his press briefing Tuesday evening, Trump said that while Democrats might not care about evictions, he wouldn’t permit them. “We’re stopping evictions. We’re not going to let that happen. The Democrats, maybe they don’t care, but I care, and we signed an executive order — you know that, right? — and we are not letting people be evicted.”
He didn’t say how this would be done.
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