Stimulus: Why Donald Trump's $400 Unemployment Bonus Is More Complicated Than Expected

After Congress was unable to agree on a second stimulus package, President Donald Trump signed an executive order on Saturday to extend various stimulus relief programs. The president called for a $400 weekly supplement to federal unemployment benefits through Dec. 6. However, not only will it likely be months before Americans receive these payments, but getting this initiative off of the ground could prove to be more complicated than originally expected.

Under the CARES Act, the previous stimulus package that Congress and the White House agreed to in March, Americans could receive an additional $600 per week in unemployment benefits. But, that benefit expired on July 31. The president recently announced an extension of this program, albeit at a lower rate. In his memo, he called for $400 weekly in unemployment benefits which will be funded with $44 billion from the Department of Homeland Security's disaster relief fund. The biggest caveat to Trump's initiative is that these payments are largely dependent on the states.

Governors have been ordered to work with the Federal Emergency Management Administration (FEMA) in order to manage this initiative. As he stated in his executive order, Trump is asking that the states cover 25% of the funding for this unemployment benefit, meaning that they will have to fund $100 of the $400 total amount. The federal government's contribution would be capped at $300. The interesting part about this benefit is that individuals can only receive the $300 from the federal government if they are already receiving $100 from the state. Basically, receiving $400 in weekly unemployment benefits is mainly dependent on how your respective state can manage this new initiative. According to Business Insider, experts have said that it could take months for states actually to be able to implement this program.

Over the past several weeks, lawmakers have been trying to come together for another stimulus package. However, Republicans and Democrats have not been able to come to an agreement on many different aspects of the package, including unemployment benefits. The HEALS Act, the stimulus proposal that Senate Republicans unveiled in late July, calls for $200 in weekly unemployment benefits through September and then a transition to a 70% wage replacement. In response to that figure, lawmakers on both sides of the aisle, including the Democratic Speaker of the House Nancy Pelosi and Republican Senator Rob Portman of Ohio, have said that the HEALS Act does not go far enough. They say it does not provide enough aid to the many Americans who are struggling amidst this unprecedented health pandemic.