Gavin Newsom said on Monday that it will be extremely difficult – and probably impossible – for the state to provide the funding needed to give California unemployment workers a full $ 400 extra benefit that President Donald Trump has announced.
That benefit would cost the state an estimated $ 700 million each week, Newsom said at a news conference this afternoon, at a time when the California government is struggling to balance a budget plagued by the sudden economic downturn triggered by the COVID-19 pandemic.
Under another scenario, Newsom said, the state would need to come up with an additional $ 2.8 billion each week.
For the state to raise another $ 700 million a week in spending, let alone, “would create a burden similar to that even a California-sized state would never be able to bear without again massive cuts in key services or additional burdens. companies and individuals, ”said Newsom.
“Participating in what is stated in the executive order would be a difficult game for the state – in addition to having to chip in to supplement with a $ 100 / week (which, given the rules of the UI program, must be borrowed from the federal government), Says Till von Wachter, faculty director of the non-partisan California Research Laboratory UCLA, which studies the development of unemployment.
He said that in order to implement the Trump program, the governor would need to sign up for a strategy whose legal foundations are questionable and which is predicted to provide additional benefits for only a limited number of weeks.
Michele Evermore, a senior researcher and policy analyst at the National Employment Law Center, saw practical problems.
“I seriously do not see how states can do this remotely quickly,” she said.
Washington wants California and other states to use some of its pandemic aids, but Newsom said more than three-quarters of that money has already been “forced and distributed.”
“There is no money in the piggy bank” from that fund, he said.
He said the president’s plan would also put an additional strain on an unemployment system that is still under fire from consumers and state legislators. It has taken four to six weeks to get calls back, and employment development officials have said their system is outdated and in dire need of modernization.
“We would need to reprogram a system that is well defined as hardly perfect at EDD,” he said.
Most of the state’s unemployed workers, as well as those around the country, received an extra $ 600 per week from late March to late July. The program has not been revived, as the White House and congressional Democrats agreed on how to proceed. Democrats wanted to keep $ 600 intact, federally funded, through January. Many Republicans believed that the amount too often was more money than people would have earned from working and wanted it.
But the non-partisan California research lab found in a study released last week that in the state, “Without $ 600 a week in additional benefits … half of all people receiving unemployment insurance benefits would have received payments below the federal poverty level.”
While unemployment insurance traditionally provides enough money to be a lifeline while someone is out of work, it is not meant to be so generous that people will not be motivated to look for work. Supporters of the $ 600 benefit claimed that people would not endanger their health by leaving their homes to look for work, so the larger payments were needed.
When the negotiations collapsed, Trump on Saturday issued an executive order saying that the federal government would pay $ 300, while the states would take up the rest.
According to the US Chamber of Commerce, the average benefit in California has been $ 347 per week.
Nationally, the total weekly benefit is $ 364.
Trump said states would be asked to “use existing funding, such as the tens of millions of dollars available through the Coronavirus Relief Fund.”
The US Department of Labor, which works with states to do just that, has so far offered some specific guidance.
Shortly after Trump’s statement, Secretary of Labor Eugene Scalia issued a statement of three sentences. It criticized the Democrats for not being more cooperative, adding, “The Department of Labor will now work closely with the states and the Department of Homeland Security and FEMA to help provide the relief available in (White House Memorandum).”