With Congress at an impasse on a fourth coronavirus relief bill, President Donald Trump took executive actions Saturday intended to partially extend the federal government’s weekly unemployment benefits while meaningfully decreasing the payout.
The series of executive orders and memorandums have left people thrown out of work by the coronavirus, and the state officials tasked with delivering their unemployment benefits, with more questions than answers.
“We’re seeing enough challenges standing up this new program," Gov. John Bel Edwards said Tuesday. "You’re going to see a big push saying this is not an acceptable alternative to the pandemic unemployment benefits we’ve been paying.”
President Trump’s memorandum on additional unemployment assistance promises to replace the $600 per week federal unemployment benefit that expired at the end of July with a weekly payment of $400 — $100 of which must be paid by states.
Edwards said that requirement makes it unlikely that any out-of-work Louisianans would get the full $400-per-week enhancement promised by the Trump Administration,.
He also estimated that 200,000 unemployed Louisiana workers —– nearly half of the people who currently receive some weekly assistance from the state —– could be excluded from the additional unemployment benefits because they receive less than $100 per week in state unemployment benefits.
Many of those below the threshold are self-employed or “gig workers,” like New Orleans musician Cornell Williams. Williams said he immediately applied for jobless benefits in March when the coronavirus forced the shutdown of bars, festivals and concert halls where he normally performs.
Williams qualified for the $600 per-week federal benefit under the expanded eligibility of the CARES Act, but was only eligible for $16 in state assistance. Now that the weekly federal payments have expired, Williams said that $16 is his only reliable income.
“We’re trying to figure out how we can participate because we know that we have a lot of workers who are unemployed, who continue to be unemployed, through no fault of their own, and we want to make available to them all of the assistance we can,” Edwards said.
Trump Administration officials have said weekly state unemployment benefits can count toward the $100 cost share requirement. Using state benefits this way effectively reduces the proposed enhancement to $300 per week, but allows states to funnel some additional money to struggling workers without drawing down their strained unemployment trust funds even further.
Edwards said Louisiana’s Unemployment Insurance Trust Fund, which had a balance of more than $1 billion in March, is now weeks away from insolvency. He raised the alarm last month with a letter to the state’s congressional delegation requesting that the fourth coronavirus relief bill include money for states to replenish their trust funds.
He says without the direct injection of those relief dollars, the state would have to borrow from the federal government to keep paying weekly jobless benefits.
The scope of the president’s program is significantly limited by its funding source — the Federal Emergency Management Administration’s Disaster Relief Fund, which is typically reserved for responding to hurricanes or other natural disasters.
“We know the disaster relief fund is not a permanent fix,” Edwards said. “If you look at the available portion of the disaster relief fund and then look at the burn rate for unemployment benefits, if every state participated it wouldn’t last more than about five or six weeks.”
Until the program starts, out-of-work Louisianans who qualify for unemployment benefits will only receive state benefits. At a maximum of $247 per week, Louisiana’s weekly benefit is among the lowest in the nation.
Edwards said the U.S. Department of Labor is still working through the details, but is expected to issue official program guidelines to their state counterparts later this week.