Trump changes stance on states paying share of additional unemployment benefits

Trump changes stance on states paying share of additional unemployment benefits

US President Donald Trump said on Sunday that despite his signed memorandum stating otherwise, financially strapped states may not have to pay their 25% share – or US$100 of the US$400 per week – of new federal unemployment benefits.

Just the day before, Trump signed a series of executive orders, one of which called for states to enter into an agreement with the federal government to pay a share of the extra benefits.

The memorandum comes after the US$600 per week unemployment benefits lapsed at the end of July and COVID-19 relief bill talks in Congress stalled due to lack of bipartisan consensus.

The order received criticism from multiple governors as many states experience budget crises due to the loss of tax revenue during the pandemic. Because states are required to provide unemployment insurance to their citizens, many state funds have also been depleted.

Experts predicted that a state may choose to not enter into an agreement with the federal government to provide unemployment benefits due to the state’s own lack of funds. This would mean that unemployed individuals in that state will get no additional benefits other than the unemployment insurance states provide.

However, on Sunday Trump said that financially struggling states may not have to cover their 25% share of federal unemployment benefits, noting that the governors of these states could file an application that will be reviewed by the White House.

“We have a system where we can do 100% or we can do 75%, they pay 25%, and it will depend on the state," Trump told reporters in New Jersey.

“So you know, they may be, they’ll pay nothing in some instances or maybe they’ll – a little bit like the National Guard, like the National Guard, as you know. Sometimes we’ll pay all of it depending on the tragedy, or whatever it may be, the disaster. Sometimes the state will pay 40%, 25%, 10% or nothing – depending on how it works out."

Democrats hope to resume negotiations

Meanwhile, following Trump’s executive orders on Saturday, Democrats hope to resume negotiations over the COVID-19 relief bill in Congress.

When asked if Democrats plan to resume talks, House Speaker Nancy Pelosi told CNN on Sunday, “Well, we have to. We have to, and that’s why we’re willing to say we’ll come down a trillion."

Democrats initially pressed Republicans for a US$3 trillion package, but offered to cut it down by a trillion during negotiations.

Pelosi made it clear from the Democrat’s perspective that Trump’s orders – which include deferment of payroll tax from employee salaries, extension to the deferment on student loan payments and provision of “assistance to renters and homeowners” – are inadequate

“Everything is left out, our assistance to the schools, feeding the hungry, helping people who are going to be evicted. The President’s moratorium, he just did a study or a look at a moratorium. So again, something’s wrong."

Treasury Secretary Steve Mnuchin said at the White House on Sunday that if negotiations are to resume again, Democrats must compromise.

“Anytime they have another offer to make, they can either call me or I’ll go up and see them. But they have to compromise."

One such desired compromise has Mnuchin asking Democrats to accept an amount lower than US$1 trillion in aid for state and local governments and lower than the US$600 per week in unemployment benefits.

“I think we’ve been very clear that they need to come back with a compromise on the state and local from their trillion dollars, and the unemployment benefits, and if so we’ll respond. I think the majority of the other issues, we’ve reached a compromise on."

Mnuchin told Fox News on Sunday that states don’t need US$ 1 trillion in COVID-19 aid.

“I’ve also spoke to many governors over the last few days. We offered more money for the states. They still have US$150 billion from last time. Most of them haven’t even used half of the money.

“The governors are saying we need more money for education. We need help, and the President said, we’ll give it to you. But not a trillion dollars."

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