More than 30 million out-of-work Americans saw their benefits drop after the $600 weekly supplemental federal unemployment benefit passed by Congress in March as part of the CARES Act expired at the end of July. Despite intense pressure to extend the benefits, which were intended to help millions of Americas who have lost income as a result of the pandemic, Congressional lawmakers have so far been unable to come to an agreement.
On Saturday, President Donald Trump stepped in, signing an executive memorandum to extend the supplemental unemployment benefits, but at a lower rate. How will it work—and does Congress need to approve it? Here’s what to know.
President Trump signed an executive memo Saturday to extend additional unemployment benefits at a … [+]
Getty Images
Will the executive action extend the $600 unemployment benefit payments?
No, the executive memo extends the offer of supplemental unemployment benefits, but at a reduced rate of $400 a week. This is the midway point between the amounts proposed by Democratic and Republican Congressional leaders.
The Democratic-led House of Representatives approved an extension of the $600 weekly unemployment benefit payments through the end of 2020 as part of the roughly $3-trillion HEROES Act, which it passed in May.
GOP Senators proposed the HEALS Act in response, which would lower the federal unemployment payments by two-thirds to $200 per week through September. Then, starting in October, the set amount would be replaced with a payment that, when combined with the state unemployment payment, would be intended to replace about 70 percent of the recipient’s estimated lost wages.
The executive memo signed by the President states that the so-called lost wages assistance program would issue a $400 supplemental payment per week, including a $300 federal contribution. The remaining $100 per week would be paid by states, President Trump said.
How long could the $400 supplemental unemployment benefit payments last?
“We’re going to enhance unemployment benefits through the end of the year. So unemployment benefits will be—that’s a big one—will be brought out to the end of the year,” Trump announced at a press conference in New Jersey.
How long the program actually lasts, though, may depend on how high unemployment remains. Under the executive action, the supplemental weekly unemployment benefits would be available for eligible unemployed Americans through the week ending Sunday, December 6, 2020, or until the balance of the Department of Homeland Security’s Disaster Relief Fund falls to $25 billion (from roughly $70 billion), whichever occurs first.
In order to continue paying out the supplemental unemployment benefits through the end of the year, the memo states that states “should also identify funds to be spent without a federal match.”
Under the executive action, eligible claimants would be able to claim the supplemental unemployment benefits retroactively from the week of unemployment ending August 1, 2020.
Does Trump have the authority to issue the unemployment benefits?
The Constitution puts control of federal spending in the hands of Congress, not the President. So, technically, no, Trump doesn’t have legal authority to order how federal funds be spent.
In his executive memo, Trump states that nearly $45 billion in emergency assistance funding in the Department of Homeland Security’s Disaster Relief Fund could be used toward the extension of the supplemental weekly unemployment benefits. He directs the Federal Emergency Management Agency to assist in providing benefits from that Disaster Relief Fund, and writes that he is “calling upon” states to use their Coronavirus Relief Fund allocation to cover the remaining costs of the $400 supplement unemployment weekly benefits for those unemployed as a result of the coronavirus pandemic.
The memo doesn’t appear to direct money to the existing unemployment program but sets up a “lost wages assistance program,” which may delay distribution of any payments. Since state governments would be responsible for paying $100 for recipients to get the full benefit, it’s also not clear how many unemployed Americans would actually be able to receive the full $400 benefit.
There may also be legal challenges to his executive action, given he doesn’t have the legal authority to dictate how federal funds be spent—something Trump himself acknowledged. “Yeah, probably we get sued,” he said during his press conference, “but people feel that we can do it.”
Trump also signed three other executive actions on Saturday, including a payroll tax holiday for Americans who earn less than $100,000 a year, as well as an extension of an eviction moratorium that expired July 25 and an extension of the deferral on monthly payments and interest for many federal student loan borrowers.
What happens next?
It’s unclear, but it’s unlikely that a $400 supplemental unemployment benefit would be distributed in the near term as a result of the memo. The action creates a program that requires states to contribute to the payments. That alone could take time to execute—and, as several states are struggling financially as a result of the pandemic, it’s unclear that they will all be able to secure funding for the additional unemployment payments.
The executive action may also be challenged in court.
In the meantime, lawmakers from both parties continue to negotiate additional stimulus aid. The House of Representatives has cancelled its traditional August recess, and Senate Majority Leader Mitch McConnell said that the Senate will also delay its recess, as lawmakers work to reach an agreement on a coronavirus relief package, which will almost certainly include some supplemental unemployment aid.
Democratic leaders have indicated that they want to maintain the $600 weekly supplemental benefits, at least through the end of the year. Republicans have opposed that level, claiming it is so high it may discourage some unemployed Americans from finding work.
House Speaker Rep. Nancy Pelosi said earlier this week that she and other Democrats are open to lowering the $600-a-week supplemental benefit as the unemployment rate decreases over time. “The amount of money that’s given as an enhancement for unemployment insurance should relate to the rate of unemployment,” she said on ABC Sunday.
So it’s likely the two parties would end up either compromising on an amount between $200 and $600 a week, or starting with $600 but decreasing the weekly amount over time as more jobs are added.
The Labor Department reported Friday that the U.S. added another 1.8 million jobs in July, but that’s down sharply from the 4.8 million jobs added in June. As of July, employment remains 12.9 million jobs, or 8.4 percent, lower than pre-pandemic levels, according to the Bureau of Labor Statistics.
Related articles:
With The $600 Unemployment Benefit Gone, Here’s What Aid May Be Coming Next
A Second Round of Stimulus Checks Seems Certain—Here’s What to Expect
Another Round of Stimulus Checks Could Go Out As Early As August
Slashing $600 Unemployment Benefits Would Be ‘Absolutely Devastating’ for U.S. Economy
