Massachusetts officials declined to say Monday whether they would accept new funding from the federal government that could boost unemployment benefits by $400 a week, as states scrambled to understand the controversial maneuver President Trump announced over the weekend.
Charles Pearce, a spokesman for the state’s Executive Office of Labor and Workforce Development, said the Baker administration is reviewing the memorandum that Trump presented Saturday. The order, which sidestepped Congress, is meant to extend financial relief to millions after the $600 weekly unemployment bonus benefit available during much of the coronavirus pandemic expired at the end of July.
Trump would use federal disaster funding to provide $300 a week in additional unemployment benefits, beyond what states already provide. But the executive action also indicated that state governments would be required to contribute $100 a week, bringing the total benefit to $400.
Several state leaders had complained that the $100 requirement would place even greater strain on resources that Congress has failed to boost in the face of opposition from Senate Republicans.
In Massachusetts, which has the highest unemployment rate in the country at 17.4 percent, the pool of money that funds unemployment benefits has already gone into the red by more than $350 million, said Eileen McAnneny, president of the Massachusetts Taxpayers Foundation. The state is borrowing money from the federal government to pay unemployment benefits, and employers will eventually be called on to contribute more, she said.
“We’re already in a deficit position, and if you were to add $100 per employee per week, it would skyrocket,” McAnneny said. “I guess anything is possible or doable, but it would come as a significant financial burden to Massachusetts employers at a time of great fragility for them.”
But new developments Monday suggested that states may not necessarily be responsible for the $100 benefit after all.
States that are paying at least $100 a week in unemployment benefits could count that spending to unlock the $300 in additional federal assistance, according to Wayne Vroman, an unemployment expert with the Urban Institute in Washington, D.C., who reviewed federal guidance sent to states detailing the policy.
The rule would apply to vast numbers of recipients in Massachusetts, which has among the most generous unemployment policies in the country. But while it would lend states some financial relief, it would also limit additional payments to $300 a week, less than the $400 announced by Trump and half of the prior $600 benefit.
Trump’s order came after a breakdown in negotiations between the administration and House Democrats, who have sought a longer-term extension of the $600 weekly benefit and refused an interim measure. Senate Republicans have balked at extending the benefit for the long term, saying it should be smaller and structured to encourage recipients to seek work.
Despite Trump’s executive action, it may take some time for the benefits to be distributed because states will likely need to submit documentation to the federal government showing they are making their contribution, Vroman said. Trump’s extension could also be delayed by possible legal challenges over whether he has the authority to direct the additional funding toward unemployment benefits without Congressional approval. And it’s not clear how long funding for the federal portion would last before running out; one estimate pegs it at about five weeks.
The confusion and complications highlight the need for Congress to strike a deal, said David Adkins, executive director of the Council of State Governments. He accused the Trump administration of not consulting with state governments before announcing the unemployment order.
“This is an attempt to, instead of engaging in deal-making necessary to make the sausage in Congress, to simply posture,” Adkins said. “I think the collective response of the states was a collective eye roll.”
But Ohio said it would accept the added $300 in weekly federal benefits, though the state will not provide the additional $100 in state funds, according to the Associated Press.
Caught in the middle are the unemployed who have already seen the $600 weekly bonus benefit evaporate and are unclear about what will happen next, said John Drew, president Action for Boston Community Development, which works to help people with low incomes.
“It’s heart-sickening, on my end, to see this happening to the most vulnerable people,” he said. “Not only do they not have it, they don’t know when or if they will.”