While President Trump promised to partially restore $400 a week in federal unemployment aid after a bigger benefit expired, millions of jobless Americans will likely receive just $300.
Unlike the previous $600-a-week supplement, which was fully federally funded, the executive action that Trump signed on Saturday depends on states being able to fund 25%, or $100, of the aid.
Under new guidance released on Wednesday, the Labor Department suggested that rather than adding $100 a week on top of what they already pay in weekly benefits, states could count their existing payments toward the 25% share. Essentially, workers would receive a $300 boost rather than the intended $400.
States still have the option to chip in an extra $100, but few, if any, are expected to do so. So far, no state has said they plan to pay $100, according to The Wall Street Journal.
Governors of cash-poor states have warned they likely cannot afford to fund the sweetened jobless aid.
California Gov. Gavin Newsom, a Democrat, said this week there's "no money sitting in the piggy bank" for the state to pay an extra $100 in unemployment assistance.
"Simply, it does not exist," he said.
Ohio already said that it would distribute the $300 a week without adding the extra $100.
New York Gov. Andrew Cuomo, a Democrat, told reporters on Monday that it would cost the state about $4 billion between now and December to pay 25% of the unemployment insurance, saying the proposal from Trump "only makes a bad situation worse."
Florida Gov. Ron DeSantis, a Republican, also pushed back, saying it was "not an option" for the state to fund the extra $100 using money previously allocated in the CARES Act, because that money has already been earmarked for spending. DeSantis said he's instead considering taking a loan from the Department of Labor to increase benefits.
“We’re looking to see what that would entail,” he told the Miami Herald. “I think if we can do the Department of Labor enhanced benefit through that loan, we would want to do it to give people some more relief.”
Budget shortfalls in state and local governments are projected to total more than $500 billion in just one year, the Center on Policy and Budget Priorities reported.
The extra $600 a week that ended in July was part of a $2.2 trillion aid package that Congress passed in March. About two-thirds of workers on unemployment received more government aid than what they earned at their old job, according to a paper written by economists at the University of Chicago's Becker Friedman Institute.
The average state unemployment benefit is about $330 per week. With the federal supplement, Americans can expect to receive about $630 in weekly unemployment benefits.
Trump allocated $44 billion to cover the additional $300 weekly benefit, using money from the Disaster Relief Fund, the government's primary source of funding.
The sweetened benefits will last until the money in the fund runs out, or through Dec. 6, 2020, according to the executive memo. The Committee for a Responsible Federal Budget estimates the money will last for about five weeks.
Only individuals who are receiving at least $100 in unemployment assistance through regular state programs or other aid initiatives like a shared-work program are eligible for the boosted benefits, according to the memo. Benefits are calculated based in part on a worker's former income, which could mean that some of the country's lowest earners are excluded.
The Labor Department's July jobs report released last Friday showed that employers added 1.8 million jobs in July, sending the unemployment rate down to 10.2%. While it marked the third consecutive month of job growth in the millions, the economy has so far added back less than half -- about 42 percent -- of the 22 million jobs it lost during the pandemic.