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Democrats call for UI system fix as millions face another lapse in benefits

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Sen. Ron Wyden, the top Senate Democrat overseeing unemployment issues, is calling on Congress to give the Labor Department $500 million to shore up the bewildered state unemployment system.

Hobbled by antiquated computer systems, state agencies responsible for paying out unemployment benefits have struggled to administer new emergency aid programs created for the millions of people pushed out of work during the pandemic, leaving many jobless people without much-needed aid for weeks.

And if lawmakers are unable to move quickly on their latest pandemic rescue package, the issue could mean that as many as 11.4 million workers could face yet another lapse in benefits when expanded unemployment programs expire again next month.

A bill released Wednesday by Wyden and Democratic Sens. Sherrod Brown (Ohio), Mark Warner (Va.), and Catherine Cortez Masto (Nev.) is aimed at fixing those systemic issues, calling on the DOL to develop a uniform system for jobless benefits that states can use to remedy their systems.

“While enhanced jobless benefits have enabled millions and millions of families to pay the rent and buy groceries, state after state has been unable to get benefits out the door in a timely manner,” Wyden said in a statement. “My bill requires a complete overhaul of unemployment insurance technology, and paves the way for one website to apply for jobless benefits, not 53.”

But some state officials point the finger at Washington for not giving them adequate time to prevent a lapse in benefits, arguing that lawmakers have taken too long to approve extensions in the programs, resulting in delayed guidance on how to administer the changes.

As part of his $1.9 trillion economic rescue package, President Joe Biden has called on Congress to extend several federally funded CARES Act jobless benefit programs through September 2021. But, the legislation Democrats have proposed would only extend them through Aug. 29, 2021.

A Senate Finance committee staffer told POLITICO that Wyden is “certainly looking” at whether the proposals could fit into the relief package. But the measure would have to comply with the strict budget rules that accompany the fast-track process known as reconciliation that Democrats are using to pass the next Covid-19 aid package with a simple majority in the Senate.

Even if it is passed quickly under budget reconciliation, the bill won’t have an immediate effect, as it lays out a two-year timeline for implementation.

Currently, while DOL oversees the unemployment system rules and funds the administrative costs, it’s up to 53 individual state and territorial unemployment agencies to actually process unemployment claims and get the benefits into the pockets of those who qualify.

But their archaic systems have struggled under the fast pace of job losses caused by pandemic-related shutdowns throughout the past year and a wave of fraud targeting the beefed up unemployment benefits Congress provided under one of the pandemic aid packages.

As a result, any changes to jobless benefit programs have taken weeks for states to implement.

Some workers who used up all 39 weeks of their unemployment benefits offered under federal programs last year still haven’t been able to tap into the extra 11 weeks of benefit provided under the extension of unemployment aid enacted by Congress in December.

In California, six percent of unemployment claimants — 185,000 people — won’t have access to those benefits until March 7, according to California’s Employment Development Department.

“What’s the roadblock here?” California Assemblymember Jim Patterson (R-Fresno) said in reaction to news of the delay last week. “The roadblock to getting money to massive amounts of people who need it and need it desperately is the same old problem. Dinosaur technology.”

But in New Jersey, state officials blamed Congress for not giving states enough time to stand up the latest round of benefits. New Jersey prioritized getting the $300 benefit out the door first, as it would help all people who were receiving unemployment. But about 75,000 workers whose unemployment benefits had expired were left in limbo as programmers worked to feverishly update the 11-week benefits extension into their system.

The issue was ultimately resolved on Saturday, but New Jersey’s labor commissioner said in a press conference last week that Congress waiting caused “significant pain” for these 75,000 workers, who represented about 5 percent of the state’s claimants.

“The frustrations our workers are feeling are taking place all over the nation right now, as a result of last minute federal action,” Labor Commissioner Robert Asaro-Angelo said, before the programming problem was resolved. “If [Congress] had acted just weeks before the expiration date they knew was looming for months, states would have had the time needed to keep benefits for some from lapsing at all.”

New Jersey’s technology system is in desperate need of upgrades. But other states that have spent large sums of money modernizing their systems are having the “exact same challenges with this subset of claimants,” Asaro-Angelo said.

This blog originally appeared at Politico on February 10, 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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