More unemployment money from the government could be be coming soon.Sarah Tew/CNET
The $600 federal weekly unemployment benefit bonus from the CARES Act expired on July 31. Democrats and Republicans didn't make a deal for another relief package, leading to President Donald Trump signing an executive memorandum on Aug. 8 to restart the additional extra weekly funds, albeit at $400 instead of $600.
"I'm taking action to provide an additional, or an extra, $400 per week in expanded benefits," Trump said. "States will be asked to cover 25% of costs using existing funding such as the tens of billions of dollars available to them through the coronavirus relief fund. Under this plan, states will be able to offer greater benefits if they so choose and the federal government will cover 75% of the costs."
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According to the executive memorandum, the $400 amount would start for the week ending on Aug. 1 and will last until Dec. 27.
When asked at a White House press briefing on Monday when unemployment benefits recipients would receive the $400, Press Secretary Kayleigh McEnany said, "We hope to see it quickly, and close to immediately." She says the speed of getting the funds to those eligible will depend on the states, as it is the states who will have to kick in $100.
Treasury Secretary Steven Mnuchin said during a second White House press briefing Monday that most of the states would be able to start the $400 unemployment benefits "within a week or two." Trump said the 25% funding from the state could be terminated depending on the state.
Along with the return of the enhanced unemployment benefit, Trump also signed three other executive actions, for a payroll tax holiday, federal student loan assistance and eviction protection. Like the $400 unemployment benefits, there are questions as to the legality of these orders.
House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer released a joint statement on Aug. 8 in response to Trump's executive actions and called on Republicans to return to the negotiating table.
"Today's meager announcements by the president show President Trump still does not comprehend the seriousness or the urgency of the health and economic crises facing working families," the two legislators said. "For instance, not only does the president's announcement not actually extend the eviction moratorium, it provides no assistance to help pay the rent, which will only leave desperate families to watch their debt pile higher. Instead of passing a bill, now President Trump is cutting families' unemployment benefits and pushing states further into budget crises, forcing them to make devastating cuts to life-or-death services."
The weekly $600 benefit, part of the Federal Pandemic Unemployment Compensation program, was a popular feature of the initial coronavirus relief legislation package that extended federal unemployment aid to help those affected by the COVID-19 pandemic. With the HEALS Act (which stands for Health, Economic Assistance, Liability Protection and Schools) officially proposed, Democrats and Republicans are working through a political stalemate.
Update: The current political context and outlook
Before Trump signed the executive memorandum to restart the unemployment benefit bonus, Democrats and Republicans were unable to make a deal on the next stimulus package. Negotiations fell apart last Friday after a "disappointing" meeting, as described by Schumer according to a report from CNBC.
On Monday, Mnuchin told CNBC the White House and Republicans were open to begin negotiations with the Democrats again.
Since the president's executive actions, Democratic leadership has spoken out on whether they were constitutional, but they have yet to declare if a lawsuit would be filed to block the orders from being carried out.
"My constitutional advisers tell me they are absurdly unconstitutional," Pelosi said last Sunday on CNN.
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When asked about whether negotiations would continue, Pelosi said she hopes they will.
California Gov. Gavin Newsom said Monday that his state doesn't have the funds to facilitate the 25% of the weekly $400 bonus, according to a report from the Los Angeles Times. Newsom said the amount needed to cover the state's portion would total $700 million.
Another issue state governors will have to face is the time it takes to implement the unemployment benefit. Pennsylvania Gov. Tom Wolf's administration says the president's executive action will require the creation of an entirely new program.
"This is not something that any state will be able to do quickly," his administration said in a statement reported by AP Monday.
States that apply for funding with the Federal Emergency Management Agency and set up a system to distribute the money will have access to $44 billion, a Labor Department official told The Wall Street Journal Wednesday. However, if all states tap into the fund for the current recipients of unemployment benefits, then it will last for five to six weeks, which would be far sooner than the Dec. 27 expiration date of the executive memo.
The US Department of Labor (PDF) on Wednesday sent out guidance on the new unemployment benefits Trump created in his executive memo -- referred to as Lost Wages Assistance. The guidance adds eligibility requirements; specifically, an individual would have to be eligible for a minimum $100 from a state's unemployment benefits program to qualify for the additional $300 federal funds. This would disqualify 1 million people, according to the New York Times Thursday.
How much would I receive from President Trump's executive memo?
According to the executive action signed by the president, an extra $400 will be sent to those on unemployment benefits on top of the funds they're receiving from the state. Of the total amount, $300 is coming directly from the federal government. The other $100 will come from the states via the Coronavirus Relief Fund and the Department of Homeland Security's Disaster Relief Fund.
What efforts are underway in Congress to extend enhanced unemployment benefits?
Congressional Democrats have continued to push for an extension of unemployment benefits. The Heroes Act, passed by the House of Representatives in May but not taken up by the Senate, would have extended the FPUC to Jan. 31, 2021. It would have also paved the way for a second stimulus payment.
The Worker Relief and Security Act, proposed by Democratic Sens. Michael Bennet and Jack Reed and Rep. Don Beyer, would extend unemployment benefits until Trump declares the state of emergency for COVID-19 is over. At that point, benefits would continue for another 30 days and then come to a close. Those still on unemployment would still receive weekly funds, but the amount would be reduced over the course of 13 weeks depending on the unemployment rate of each state.
Both proposals have been opposed by Republicans, including Senate Majority Leader Mitch McConnell. GOP leaders have taken issue with the enhanced unemployment, saying it discourages workers from returning to their jobs. Sen. Lindsey Graham said in April that reauthorization of the unemployment benefits would get passed "over our dead bodies." McConnell said on July 6 that the next relief bill could contain a second stimulus check for those making $40,000 a year or less.
Mnuchin told Bloomberg on June 23 that there are discussions for another stimulus bill. He said, however, it would focus on the businesses most affected by the pandemic.
On July 1, Senate Democrats introduced a bill to extend unemployment aid until March. The money made available would be tied to the state's unemployment rate. When a state's three-month average unemployment rate goes below 11%, the amount of aid would be reduced by $100 until the average gets under 6%.
What is the HEALS Act?
The White House and Senate Republicans agreed on the terms of an aid package, with a proposal, called the HEALS Act, introduced by McConnell on July 27. The $1 trillion package addresses several programs created or modified by the CARES Act such as unemployment insurance, the Paycheck Protection Program and Economic Income Payments.
The GOP has proposed reducing the enhanced unemployment benefit from $600 per week to $200. Then, in September, the benefit would be adjusted and combined with the states' unemployment offerings to equal 70% of a worker's wage.
If Congress decides to reinstate a federal unemployment benefit bonus -- in any amount -- it will likely take two to four weeks for payments to flow to states and then recipients, according to the Economic Policy Institute. So far, the proposal has been introduced only in the Senate. Democratic congressional leaders are currently negotiating with the GOP on the particulars of the plan.
What is the CARES Act?
Congress passed the $2.2 trillion CARES Act in March to help Americans and US businesses after cities began locking down due to the pandemic. Included in the package was additional unemployment aid for people who lost their jobs because of the pandemic.
Since shelter-in-place rules were put in place, tens of millions of Americans have received the extra federal unemployment aid. With states providing between $235 and $1,220 per week in assistance, the additional $600 per week has been a major component of many people's financial lifeline.
Who was eligible for enhanced unemployment?
If you've been laid off or furloughed, you're eligible to apply for unemployment benefits from the state where you live. Once the state approves your claim, you're eligible to receive whatever state benefits you're entitled to. Because states cover 30% to 50% of a person's wages -- some states provide more while others offer less -- the extra $600 from the federal government was added on to help fill the gap.
How does the CARES Act help people who have been laid off or furloughed?
Each state has its own criteria for who is eligible to receive unemployment -- and what those benefits entail. This includes how much money you're eligible to receive, which is usually based on your income and how long you're eligible to receive it, which is usually based on how long you held your most recent job. The CARES Act provided a booster fund -- adding up to $600 extra per week -- while also extending states' unemployment benefits to a maximum of 39 weeks instead of the typical 26 weeks.
How are unemployment benefits calculated?
The state determines how much each applicant will receive, usually based on an individual's gross income. It varies from state to state but is typically between $300 and $600.
How can I find out if I'm eligible for unemployment benefits?
Eligibility criteria vary from state to state, but the general rule is that you should apply if you've lost your job or been furloughed through no fault of your own. This would include a job lost directly or indirectly to the current pandemic.
How are different states handling this?
Again, the benefit duration and amount varies. Most states provide up to 26 weeks of funding, though others, such as Georgia, limit benefits to 12 weeks. On the other hand, Delaware will provide benefits for up to 30 weeks. The weekly benefit amount depends on an applicant's gross income when they were employed and ranges between $300 and $600, with some exceptions. Mississippi pays up to $235, while Massachusetts' maximum is $1,220.
Where can I find more information about my state's policy?
Each state's labor office provides more information about its particular unemployment benefits.
How does the CARES Act help people who are self-employed?
The CARES Act also created the Pandemic Unemployment Assistance program, which provides benefits to individuals who would not normally be eligible for unemployment benefits from the states such as gig workers, freelancers, independent contractors and small business owners whose income has been affected by the pandemic. Under the CARES Act, PUA funding will be available until Dec. 31, 2020.