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States Already Out of Unemployment Cash Helps Prove Much-Predicted Failure of Trump's Executive Action on Covid-19 Relief

"America's economy is getting hammered, but when those who need help most look to Washington they see Senate Republicans posturing with bad legislation and the White House refusing to negotiate."

Hundreds of Kentucky residents wait in long lines for assistance with unemployment benefits at the state capitol in Frankfort on June 19, 2020 (Photo: John Sommers/AFP/Getty Images).

Hundreds of Kentucky residents wait in long lines for assistance with unemployment benefits at the state capitol in Frankfort on June 19, 2020 (Photo: John Sommers/AFP/Getty Images).

Appearing to vindicate critics who warned executive action by President Donald Trump last month would be inadequate to address the economic catastrophe unleashed by the Republican Party's refusal to extend key federal relief programs in the midst of the pandemic, some jobless workers have already been told the $300 weekly benefit provided by the president's directive is ending a mere six weeks after it began. 

"The Senate must extend the unemployment insurance provisions of the CARES Act, both to provide relief to the jobless and to the bolster the broader economy."
—Heidi Shierholz, Economic Policy Institute

While two thirds of states have not yet started—and others only recently started—paying qualified unemployed residents hundreds of dollars from the Lost Wages Assistance (LWA) program authorized last month by Trump, both Texas and Tennessee have announced that funding for the weekly income boost has been exhausted. Arizona, Iowa, Montana, and Utah are expected to join them soon, followed by Louisiana, Missouri, and New Mexico. 

"America's economy is getting hammered, but when those who need help most look to Washington they see Senate Republicans posturing with bad legislation and the White House refusing to negotiate," said Joint Economic Committee Vice Chair Don Beyer (D-Va.) in a statement late Thursday night in the wake of Democrats' rejection of the GOP's "skinny relief" bill that Sen. Bernie Sanders (I-Vt.) called "disgraceful."

"For 25 weeks in a row now the country has seen more new unemployment claims than the worst week of the Great Recession, and still the White House is refusing to take this crisis seriously," Beyer added. "Trump’s executive order is not nearly good enough for millions of unemployed workers losing food security, housing, and healthcare. The White House must resume negotiations with congressional leaders to provide strong economic stimulus as soon as possible."

Michele Evermore, a policy analyst at the National Employment Law Center, shared Wednesday on Twitter that she "just got a press release from the Texas Workforce Commission that the FEMA money is not coming for this benefit week and the last week that the $300 applied was the week ending September 5."

The press release was shared on social media by Washington Post reporter Jeff Stein, who pointed out that even though Trump's executive order was "widely taken up by the states," the money provided "was limited and only expected to last a few weeks."

Journalist Joseph Zeballos-Roig, who reports on economics and policy for Business Insider, pointed out that after just six weeks, over a million unemployed people living in Texas "are back on state benefits only, drawing 30% to 50% of their past wages." 

He also noted that Evermore and Andrew Stettner, a fellow at the Century Foundation, had predicted in August that the LWA program would provide only six weeks of enhanced unemployment insurance. 

According to Beyer, state employment agencies were told in a September 9 FEMA presentation that "payments should only be provided for the weeks that FEMA has approved," with an "initial award (weeks 1-3)" and the potential of an "additional weeks 4, 5, and 6" currently subject to FEMA processing to follow if approved.

Trump created the LWA program through executive action on August 8 after Congress failed to extend the $600 unemployment insurance enhancement, which expired at the end of July. 

The LWA program uses federal disaster relief funds taken from the Federal Emergency Management Agency (FEMA) to distribute $300 per week to qualifying unemployed Americans for a limited time. At least four states—Kansas, Kentucky, Montana, and West Virginia—have elected to kick in an additional $100 per week from their own depleted coffers, CNN reported

FEMA has already approved nearly every state—with South Dakota declining federal assistance and only Nevada remaining to be approved—enabling them to allocate enhanced payments for up to six weeks, though some states say they won't be able to begin making payments until late October. Of the $44 billion available to states, $30 billion has already been distributed. 

While out-of-work individuals in two of the states that initiated payments earlier than most have already been informed that time's up on the benefits, residents of states just beginning to implement the program have only a few weeks left before they, too, are told that it's over. 

As Common Dreams reported last month, progressives were highly critical of the series of executive actions unveiled by Trump in early August. 

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"An executive order stunt is no substitute for real relief that meets the scale of the economic and public health crisis that is currently facing Americans," a coalition of social justice and labor groups said at the time. "It is shameful that Senate Republicans and the president are refusing to work to pass the HEROES Act on behalf of the American people." 

If the president "cared about helping Americans," Sen. Elizabeth Warren (D-Mass.) said in response to Trump's four executive orders, "he would have demanded Senate Majority Leader Mitch McConnell start negotiating as soon as the House passed the HEROES Act," which happened nearly four months ago. 

"This is an administrative nightmare," Evermore said of the president's measure in early August. "States are going to have to set up a new program aside from regular unemployment insurance. It could take months for states to implement this." 

Or, if you moved as quickly as Texas and Tennessee, the LWA program—which already represented a substantial reduction of benefits compared to the unemployment insurance provisions in the CARES Act—could already be a memory.

Heidi Shierholz of the Economic Policy Institute warned in August that cutting unemployment insurance benefits was"not just cruel" but "terrible economics." She argued the "main impact" of Trump's executive order "was to divert attention from the desperate need for the real relief that can only come through legislation."

"Congress must act," the economist added, "but Republicans in the Senate are blocking progress." On social media, several lawmakers and advocates supportive of the HEROES Act concurred. 

A wide array of progressive researchers, organizers, and policymakers have consistently argued that the government must provide robust—not "skinny"—relief in order to avert catastrophic levels of inequality, immiseration, and austerity. 

Shierholz and others have made the case that extending federal assistance, in general, and the $600 unemployment insurance enhancement, in particular, is not only humane but also economically sound since doing so supports consumption and jobs.

Challenging the notion that expanded benefits disincentivize work, Shierholz argued that "millions will remain jobless no matter what they do" because "they can't find work." She added that "the Senate must extend the unemployment insurance provisions of the CARES Act, both to provide relief to the jobless and to the bolster the broader economy."

In addition, Elizabeth McNichol of the Center on Budget and Policy Priorities emphasized the importance of federal fiscal aid to prevent states and localities—which are dealing with budget shortfalls as a result of diminished tax revenues—from having to pursue "damaging cuts" that will hurt "communities nationwide, especially those hit hardest by the unprecedented events of recent months."

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