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As job losses mount, states struggle to pay extended benefits

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About two dozen states have yet to start paying out the billions of dollars in federal jobless benefits extended by Congress last month, depriving struggling Americans of income even as many have been out of work for months.

In most of the states working to reset their unemployment insurance systems, people relying on federal aid — especially a new program set up for Uber drivers and others in the gig economy — will be waiting as long as several weeks to get their hands on the money. Among states experiencing delays are California, Michigan, Florida and Washington.

Americans are less likely to have cash saved to help bridge the gap because it took months of negotiations in Congress before the additional federal aid was renewed after lapsing at the end of July, said Ernie Tedeschi, a former U.S. Treasury economist, who is now the head of fiscal analysis at financial firm Evercore ISI.

“I worry that unemployed workers may have burned through a lot of those savings and have a lot less to sustain them,” Tedeschi said. “Workers need the relief that they’re eligible for, that they’re entitled to, as quickly as possible.”

The delay comes as job losses are growing, with the economic recovery losing momentum amid a resurgence of the coronavirus pandemic. The Department of Labor reported Friday that U.S. employers cut 140,000 jobs in December, the first decline in employment since April.

President-elect Joe Biden has backed Democratic leaders’ calls for more federal aid to boost benefits — a prospect that is more achievable with Democrats winning the two Georgia runoff elections on Tuesday, which gives them control over the Senate.

Neera Tanden, Biden’s pick to lead the Office of Management and Budget, said during an event held by Business Forward on Wednesday that the presidential transition team is “thinking about how to extend unemployment insurance for the duration of the crisis.” She didn’t elaborate on how they would do that.

But Congress has already begun to leave town until Biden’s Jan. 20 inauguration, meaning that jobless Americans will likely be waiting a while before they see more financial help from Washington.

While some states like New York, Maryland and Maine were able to issue the federal jobless payments without delay, others including Nebraska, North Dakota and Kansas say they are reviewing guidance from the Labor Department and will need time to start cutting the benefit checks again.


Even in states that are paying out the aid or expect to shortly, such as New Jersey, Texas and Georgia, workers who used up all 39 weeks of their unemployment benefits offered under federal programs last year will have to wait for additional reprogramming and processing of the computer systems.

Lawmakers extended several CARES Act emergency unemployment insurance programs under the massive economic relief bill signed into law on Dec. 27. These include the Pandemic Unemployment Assistance program, which provides jobless benefits to gig workers and others not traditionally eligible for help; and Pandemic Emergency Unemployment Compensation, which extends state unemployment benefits an additional 13 weeks.

But because Congress waited until just days before the programs’ Dec. 31 expiration date to pass a bill to extend the programs into 2021, many states didn’t have the time to set up their systems to continue paying out the benefits in the new year.

The relief bill also restored the Federal Pandemic Unemployment Compensation program — which expired at the end of July — to provide all workers receiving jobless aid with an extra $300 a week through March 14.

But it was the extension of that program that created a programming headache for some state systems that hadn’t paid the benefit since late summer.

Washington state was able to reprogram its system to prevent a lapse in benefits for its residents using the federal PUA and PEUC programs, but it won’t be able to start issuing the extra $300 payments until Jan. 15.

Massachusetts’ and Nebraska’s unemployment agencies say they will be able to issue the $300 payment this week, but are still working to set up the other aid programs.

So far, at least 18 states have started to issue benefit payments this week or plan to early next week. They include Arizona, Alabama, Louisiana, Maine, Idaho and New York, among others.

Some 32 states are currently not paying out all the benefit programs or have not provided an update on their website or responded to requests for comment. They include Michigan, Montana, Florida, Alaska, Washington and Wyoming.

For its part, the U.S. Labor Department has issued dozens of pages of guidance since President Donald Trump signed the bill into law last month. The agency also says it has held three calls and sent mass email messages to states to explain the new unemployment provisions in the stimulus package and will be holding technical assistance webinars this week and next.

“Some states can’t even really give a timeline at this point,” said Michele Evermore, an unemployment insurance expert at the left-leaning National Employment Law Project.

“Some states are waiting for all five pieces of guidance before they say anything or roll anything out,” she said, noting that the DOL issued several instructional documents during the holidays.

This blog originally appeared at Politico on January 8, 2021. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.


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