In mid August, the president signed an executive order issuing an extension of jobless aid benefits, which called for $300 per week from the federal government, plus up to $100 a week from state governments. The order came after the $600 per week in supplemental aid under the CARES Act lapsed at the end of July, leaving millions without additional aid they relied on to help pay bills during the coronavirus pandemic.
The Trump administration later clarified that the proposed enhanced unemployment benefit would amount to $300 after many state officials said they couldn't afford their share.
Some of the 30 million Americans who are currently out of work won't qualify for aid under the proposal, though, experts explain. Here's why.
Americans collecting less than $100 a week in state benefits wouldn't be eligible for the additional federal aid, the executive order states. That amounts to about 950,000 people who wouldn't get additional federal jobless aid, according to a CNBC analysis of most recent Labor Department data.
And, unlike under the CARES Act, gig or freelance workers wouldn't be eligible for the enhanced benefit under the president's orders. "The executive order would only provide aid to Americans who are eligible for traditional unemployment insurance. So, for example, Uber drivers and gig workers were covered by the pandemic unemployment insurance under the CARES Act. They're not eligible, in most cases, for traditional unemployment insurance, so they don't get covered," Joshua Gotbaum, a guest scholar at the Brookings Institution who has worked in five administrations under presidents of both parties, told Grow earlier this week.
In order for Americans to receive any of the $300 a week in federal aid, states would have to request the assistance from the government and have a system in place to deliver the aid, and many states don't want to "encourage unemployment benefits at all," says Mark Hamrick, senior economic analyst at Bankrate.
"We've heard all too common accounts of individuals who just simply haven't been able to get their [unemployment benefit] requests through the system," Hamrick says. "Some states essentially make it very difficult for people to get benefits in the first place."
As of Aug. 24, more than half of states have received approval to send out $300 per week in enhanced unemployment benefits, according to the Federal Emergency Management Agency (FEMA), which is overseeing the assistance.
Last week, Larry Kudlow, the director of the White House National Economic Council, said states wouldn't have to pitch in their $100 portion to enact the program the president ordered. "We modified slightly the mechanics of the deal," Kudlow told Fox News.
His comments came after governors from both political parties expressed concerns about the president's orders, since state budgets are already being pinched by costs associated with the pandemic.
Originally, the president's order called for states to chip in 25% ($100) of the $400 benefit. To fund their share, states could count the first $100 they already pay in jobless benefits to meet that requirement. The problem is, most states have unemployment benefit minimums below $100.
State unemployment varies widely depending on where you live. In Hawaii, for example, standard unemployment benefits can be as low as $5 a week. In Massachusetts, however, benefits can be as high as $1,234.
Alternatively, states could find the money from their own budgets or from CARES Act funding, which created a $150 billion coronavirus relief fund. However, many states are strapped for cash and, much of that CARES Act money is already being allocated to other costs, said Gotbaum.
"Some of the states have already spent the money, and if they haven't, they have plenty of things to do with that money. For example, reopen school," Gotbaum said.
If this seems confusing, that's because it is. Even labor experts are having a hard time nailing down the details and implications of the president's orders, including the amount and duration of benefits, as well as when payments would start.
States still have to interpret program rules to determine how to implement the benefit and move forward, and officials only just received guidance from The Labor Department on the president's orders Wednesday night.
"It's a very complicated situation," says Hamrick. "I think it shines a light on the fact that we didn't really have a great social safety net in our country. ... Many people expected or thought that we had a better system to take care of people when they run into trouble. But of course, the magnitude of this crisis is unlike anything we've seen in our lifetimes."
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