President Joe Biden has said federal unemployment benefits should expire as scheduled in September, but his administration signaled this week that some states should replace the missing benefits.
States should consider using part of the coronavirus relief money Congress allocated earlier this year to provide “income support” to some of the millions of unemployed workers set to lose their federal benefits next month, U.S. Labor Secretary Marty Walsh and Treasury Secretary Janet Yellen said Thursday in a letter to Democrats about the looming expiration.
An extra $300 per week plus benefits for gig workers and the long-term jobless are all set to expire on Sept. 6. It’s still “appropriate for that benefit boost to expire” on schedule, Walsh and Yellen wrote.
“At the same time, even as the economy continues to recover and robust job growth continues, there are some states where it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time, allowing residents of those states more time to find a job in areas where unemployment remains high,” they said in their letter.
States that still have high unemployment rates should tap into the $350 billion state assistance fund created as part of the American Rescue Plan, Walsh and Yellen wrote, to create “additional weeks of income support” that are legally distinct from regular unemployment benefits even if they are paid using “existing UI infrastructure.”
“This will enable states that choose to do so to more seamlessly provide support to unemployed workers, while complying with existing federal law and regulations,” the letter said.
The letter is basically an invitation for Democratic governors to set up shadow unemployment systems ― much like the Donald Trump administration did last summer when it created a “lost wages assistance” program after Congress let a $600 unemployment boost expire.
Biden essentially surrendered to Republicans on unemployment benefits earlier this summer, when more than two dozen GOP-led states began cutting off the federal programs early. Republicans have attacked Democrats for paying Americans to stay home, claiming the additional federal benefits are stopping people from taking jobs. Economists and unemployment experts have said there’s little indication the benefits are depressing job numbers, but Biden gave a speech in May urging unemployed Americans to go back to work.
Now, with some 7.5 million workers facing a loss of benefits next month and the delta variant of the coronavirus surging, Biden is sending a different message ― that some people still need benefits.
Many Democrats in Congress have proposed overhauling the state-federal unemployment system so that states with higher unemployment rates would automatically pay more weeks of benefits.
Sen. Ron Wyden (D-Ore.), who has sponsored an unemployment reform bill, said he appreciated Biden’s late effort to keep benefits going.
“As I’ve said since the beginning of this crisis, it was far more difficult to respond because the unemployment insurance system is broken, and we can’t allow two economic crises in 10 years come and go without fixing the program,” Wyden said. “If we finally bring unemployment insurance into the 21st century, there won’t be the same drastic need to temporarily patch the system in the midst of the next recession.”
But the proposal to permanently reform the unemployment insurance system has largely been deemed too costly and has fallen off the priority list for Democrats as they begin to negotiate a more than $3 trillion policy package.
