Confirmed: Extra $400 Unemployment Benefit Extension Slashed To $300; State Match Optional – Forbes

While President Trump's executive memo on unemployment insurance benefits extension called for $400 in lost wage assistance, the Department of Labor's recent letter confirms that most Americans may only receive $300 per week. — While President Trump’s executive memo on unemployment insurance benefits extension called for $400 … [+] in lost wage assistance, the Department of Labor’s recent letter confirms that most Americans may only receive $300 per week.

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On Wednesday, the Department of Labor (DOL) issued an unemployment insurance program letter to state agencies providing guidance on how to administer the extension of federal unemployment benefits, technically known as Lost Wages Assistance (LWA), that President Trump announced over the weekend. The most important paragraph in the letter confirms that eligible Americans may only receive an LWA payment of $300 per week, not the $400 that Trump had promised when he issued the executive memorandum.

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Federal Unemployment Benefit and Lost Wages Assistance Recap

Millions of unemployed Americans were kept afloat during the coronavirus pandemic thanks to the creation of a $600 weekly federal unemployment benefit included in the CARES Act. The benefit expired at the end of July and has been one of the main sources of friction as Democrats and Republicans negotiate the next coronavirus stimulus package. With negotiations stalled, Trump turned to executive directives, issuing four actions last Saturday aimed at payroll taxes, student loans, evictions, and unemployment benefits.

On unemployment benefits, Trump announced the creation of the LWA program, claiming it would offer $400 in extra weekly funds; the federal government would cover $300 and states would need to supplement an extra $100. “I’m taking action to provide an additional or an extra $400 per week in expanded benefits: $400. Okay?” he said. “States will be asked to cover 25 percent of the cost using existing funding, such as the tens of billions of dollars available to them through the Coronavirus Relief Fund. Under this plan, states will be able to offer greater benefits if they so choose, and the federal government will cover 75 percent of the cost. So we’re all set up. It’s $400 per week,” he added.

White House Offers Multiple, Varying Interpretations

Almost immediately, there was bipartisan blowback from state leaders about their required incremental contributions. State budget shortfalls are projected to reach $555 billion, according to the Center on Budget and Policy Priorities, and many claimed that funding an additional $100 was impossible. As a result, White House officials began to tweak the LWA proposal.

On Tuesday, White House National Economic Council Director Larry Kudlow suggested that states would not have to put up incremental funds in order for unemployed Americans to qualify for the $300 federal benefit. “We modified slightly the mechanics of the deal,” Kudlow said. “By Tuesday evening, at least five contradictory versions of this parallel benefit system had been communicated by various Trump officials, according to a running tally from Georgetown law professor David Super,” noted Catherine Rampbell of The Washington Post. For individuals who have not received any federal unemployment benefits for roughly 20 days, as well as states who needed to stand up and administer the benefits quickly, the lack of consistency was frustrating.

Department Of Labor Guidance Provides Clarity

With so much confusion, the Department of Labor’s letter provides much needed clarity on how the Lost Wages Assistance program will work. It will help states with technical assistance to administer the program and provide some line of sight for the millions of unemployed Americans about how much they can expect to receive in supplemental funds.

While the clarity is welcome, some may be disappointed by the guidance the DOL letter provides. It includes a paragraph that relieves states of the obligation to provide an incremental $100 in unemployment benefits in order to receive the $300 federal contribution. “States may count funds that are already used to provide regular state UI payments toward the state match, if they choose to do so, eligible claimants will receive a LWA payment of $300 from the Federal Government in addition to their weekly benefit amount,” the letter states.

The letter continues to note that states may meet the $100 per claimant per week state match with the regular payments they make for state unemployment insurance benefits. It acknowledges that if states go this route, “eligible claimants will only receive a LWA payment of $300 in addition to their weekly benefit amount.”

In short the DOL makes it clear that states could provide the $100 in incremental funds, but that it is not mandatory. In reality, this means that Americans should only expect to receive $300 per week for the duration of the Lost Wages Assistance program and not count on the extra $100 from states given soaring state budget deficits. “No state has yet said it will foot the extra $100,” Forbes’ Jack Brewster noted.

The Upshot

The DOL letter is a Rorschach blob that could be interpreted differently by a politically polarized electorate. Some Americans may view the $300 as better than the zero dollars in federal unemployment aid they are currently receiving given the logjam in stimulus relief negotiations and 50 percent more than the $200 Senate Republicans had initially proposed in the HEALS Act. Other may view it as a 50 percent reduction from the $600 federal benefits they were receiving until the end of January, a 50 percent reduction in the $600 proposed by House Democrats in the HEROES Act, and a 25 percent reduction from the $400 Trump had promised less than a week ago.