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You probably heard that President Trump signed an executive order to provide an extra $400 a week in unemployment helps.
Be aware that it’s not a done deal. And, based on the contents of a Department of Labor memo sent out Sunday and reviewed by CNBC, that amount could absolutely end up being $300 weekly. There’s also no guarantee that everyone who’s unemployed and otherwise receiving weekly gains would get anything.
Trump’s call for the extra unemployment money was part of a handful of executive orders he issued Saturday after negotiations for the next arched of coronavirus relief fell apart in Washington a day earlier.
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With the unemployment rate above 10% and economic uncertainty persisting, lawmakers are motionlessly sorting out their differences over how best to help struggling households and businesses, as well as states and local commands.
For unemployment benefits, Democrats included a provision in the HEROES Act passed by the House to extend the $600 weekly extra that bound in late July. Republicans in the Senate proposed $200 in their HEALS Act.
While the president’s $400 is right in the mid-section, it comes with some caveats.
On top of questions about whether the executive order can legally stick and uncertainty local its implementation, recipients would have to collect at least $100 weekly in other unemployment insurance to qualify for the upwards.
This would eliminate eligibility for individuals who receive little in the way of benefits, unless states could boost what they pay in regulative unemployment so that all recipients receive amounts above that $100 weekly threshold, said Michele Evermore, chief policy analyst for the National Employment Law Project and an expert on unemployment benefits. Given already-stretched budgets in some asseverates, that could be a tall order.
Most states have unemployment benefit minimums below $100. Crests range from under $300 to more than $1,200 a week in Massachusetts, which is the only state where the highest benefited benefit is more than $800 weekly.
Additionally, Trump’s order called for states to chip in 25% ($100) of that $400. Secured on the DOL memo reviewed by CNBC, states have two options to fund that share. They could count the commencement $100 they pay in weekly benefits to meet that requirement — which means the boost would amount to $300, not $400.
Alternatively, haves could fund their share from either their own coffers or from funding they already beget access to: The CARES Act, passed in late March, created a $150 billion coronavirus relief fund. However, much of the leftover money in that pot — $80 billion — already has been earmarked for ongoing costs by states even if it hasn’t yet been consumed, Evermore said.
For the federal government’s $300-per-week share, Trump would use $44 billion from the guidance’s $70 billion Disaster Relief Fund — which typically is deployed in the wake of weather disasters and the like. The notes would be administered by the Federal Emergency Management Agency, or FEMA.
“How states could pay FEMA aid [to beneficiaries] through their unemployment warranty would be very difficult and take a lot of time,” Evermore said.
Eligibility for the extra federal benefits would be retroactive to the week that die out Aug. 1. The weekly increase would remain in place until Dec. 6 or the funding runs out, whichever happens chief, according to the executive order.
The Committee for a Responsible Federal Budget estimates that the $44 billion would last five weeks.
The federal additionally also would not be automatic. States would need to request the assistance. They also would need to beget a system in place to deliver the money, which is no simple task, Evermore said.
“It’s incredibly complicated,” Evermore asseverated. “I’m really not sure how any of this would work within the framework of how states pay out benefits.”
(CNBC’s Jodi Gralnick gave to this report.)
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