Now that negotiations about a new stimulus package have fallen apart, at least for now, questions remain about those counting on unemployment benefits. The CARES Act had provided an additional $600 per week to recipients, which expired back in July. On Tuesday, members of President Donald Trump‘s administration claimed that the payments would arrive in the coming weeks, thanks to an executive order signed by the president.
During a press briefing on Tuesday, Treasury Secretary Steven Mnuchin claimed that “within the next week or two, most of the states will be able to execute” the unemployment payments, according to Forbes. However, states are also required to make changes to their unemployment systems, which could take several weeks to implement. Those who qualify for the $400 unemployment payment, down from the $600 afforded by the CARES Act, would-be recipients must have received at least $100 from state unemployment insurance or other specified unemployment benefits in a certain week. The White House claims this is to prevent “fraud and abuse.”
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A memo released by the White House also states that benefits begin the week ending August 1, meaning they would be retroactive to that date. However, that doesn’t give any real indication as to when the payments themselves will arrive. There’s also the matter that the executive order requires states to pay for 25 percent of that $400 weekly payment.
The memo also states are allowed to money from the Coronavirus Relief Fund for the unemployment benefit. There’s currently more than $80 billion remaining in the CRF, more than half of the $150 billion put there by the CARES Act in March. However, that hasn’t stopped some states from wondering if that would be enough. Ohio Governor Mike DeWine said that it would be difficult given that the state has a law that requires a balanced budget, meaning their ability to supplement the unemployment payment is in doubt. Similarly, New York Governor Andrew Cuomo spoke out in opposition. “We started with a $30 billion hole, and your solution [will] cost me another $4 billion? Thank you,” Cuomo said. “That’s handing the drowning man an anchor. Hold on to this.”
It is possible, however, that the $400 payment could be $300 a week if states can’t supply their end. White House Economic Advisor Larry Kudlow called the proposal “a good, generous compromise.”
