The Middletown Press (Middletown, CT)
Kudlow: White House changing unemployment benefit
WASHINGTON — After complaints from governors about the expense, the Trump administration is backing away from a requirement that states kick in more money for unemployment insurance as part of an executive President Donald Trump issued Saturday.
Trump proposed a new federal unemployment benefit of $400 a week with states covering a quarter of the cost, or $100 per person.
White House Economic Adviser Larry Kudlow said Tuesday the administration had “modified slightly the terms of the deal” and would waive the state contribution, as long as the state already paid people at least $100 a week in benefits. That means the unemployed would see a federal benefit of $300 a week, on top of their usual state benefit, unless their state decided to add more.
“States can still, if they put another $100 in to raise the benefit more generally, that’s fine,” Kudlow explained on Fox News. “Any state who put in $100 before, and every state did, they will then qualify for the extra $300.”
The U.S. Labor Department expects the new federal unemployment checks to start in about two weeks, Kudlow said.
But since Trump announced the new proposal, state officials have been in the dark about when they might have to start implementing the policy, among other details.
“Connecticut, along with other states and districts, is waiting for guidance from the U.S. Dept. of Labor regarding the federal supplement,” Juliet Manalan, communications director for the state Department of Labor said.
Connecticut’s unemployment rate has averaged 9.2 percent over the past 3 months — although the state’s economist indicates the actual rate is much higher. About 300,000 weekly unemployment claims are filed to the state each week.
After Trump announced the new state obligation contained in his unemployment benefit, Gov. Ned Lamont said Sunday the proposal would cost Connecticut $500 million over the next four months.
“I could take that money from testing,” Lamont said. “I don’t think that’s a great idea. I could take that money from, you know, mass disinfecting for our schools. I don’t think that’s a great idea. In fact, I think the president’s plan is not a great idea.”
Gov. Andrew Cuomo of New York said Monday the change would cost New York $4 billion it does not have. Gov. Andy Beshear of Kentucky said it could cost Kentucky $48 to $60 million a month, or over $1.5 billion for the last three months of the year, “something that is just not possible for the commonwealth of Kentucky.”
Even without the new burden, Connecticut Department of Labor officials expect they will have to start borrowing soon to keep up with the demand for unemployment in the state.
Since March 13, the state Department of Labor has paid out more than $4.4 billion in state and federal unemployment benefits. That includes the $600 per week federal pandemic unemployment compensation that expired July 31 and has proved a thorny source of division in Congress during ongoing negotiations over the next coronavirus package.
On July 31, the state Department of Labor announced it would extend state benefits from 13 weeks to 20 weeks due to several consecutive months of high unemployment.
“It builds some stability into the unemployment safety net for the longterm unemployed,” Labor Commissioner Kurt Westby said. “With the expiration of the Federal Pandemic Unemployment Program last week, many claimants are seeing a large decline in their benefits — one that Connecticut cannot remedy without federal action. This extension of benefits will help workers for as long as the state remains above the three-month average threshold.”
Without the $600 federal benefit, the average weekly unemployment benefit in the Connecticut was $269.25 in July, Manalan said.
emilie.munson@hearstdc.com; Twitter; @emiliemunson