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No state extends unemployment benefits despite calls from Biden

·Reporter
·4-min read

No state has extended the pandemic unemployment programs that expired earlier this month despite the call from the Biden administration to use leftover stimulus funds to do so.

Some governors have cited the cost as being too high to manage, while other state officials said no federal funds are left to extend the programs.

“It should be noted here that no state is extending this benefit beyond September 4th,” New Jersey Gov. Phil Murphy said at a press briefing on August 30. “It would cost at current at least $314 million per week and perhaps hundreds of millions of dollars more.”

The inaction leaves millions of jobless workers without any benefits to depend on, even as the surge in cases from the Delta variant hampers the economy.

People wear face masks as they wait in line to attend a job fair for employment with SoFi Stadium and Los Angeles International Airport employers, at SoFi Stadium on September 9, 2021, in Inglewood, California. - Fewer Americans made new claims for unemployment benefits last week than at any point since the Covid-19 pandemic began, according to government data released on September 9, the latest sign of progress in the job market following last year's mass layoffs. (Photo by Patrick T. FALLON / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)
People wear face masks as they wait in line to attend a job fair for employment with SoFi Stadium and Los Angeles International Airport employers, at SoFi Stadium on September 9, 2021, in Inglewood, California. - Fewer Americans made new claims for unemployment benefits last week than at any point since the Covid-19 pandemic began, according to government data released on September 9. (Photo by PATRICK T. FALLON/AFP via Getty Images)

In August, the Biden administration called on states with high unemployment to use leftover stimulus funds to extend key pandemic-era unemployment programs that expired in early September.

Three major programs ended then: the Pandemic Unemployment Assistance (PUA) for workers who don’t usually qualify for regular unemployment insurance; the Pandemic Emergency Unemployment Compensation (PEUC) that extends the duration of unemployment benefits; and the additional $300 of weekly benefits.

“Even if states have some desire to do this, the cost of continuing the programs is very large,” Andrew Stettner, an unemployment insurance expert and senior fellow at The Century Foundation (TCF), told Yahoo Money. “In New York or California, it is going to be several billion dollars to continue benefits for a couple of months.”

‘No remaining funds available’

Pedestrians walk by a
Pedestrians walk by a "Now Hiring" sign outside a store on August 16, 2021 in Arlington, Virginia. (Photo by OLIVIER DOULIERY/AFP via Getty Images)

Biden urged states to use leftover funds from the $350 billion included in the American Rescue Plan for state, local, and tribal governments to extend benefits for unemployed workers. The funds were provided to states in March.

“States may already have plans, and may, in some cases, have even spent some of the money, if not all the money on other activities,” Matt Weidinger, senior fellow and Rowe Scholar at the American Enterprise Institute, told Yahoo Money.

For instance, California used the federal funding for its state stimulus package and for stimulus payments for residents, among other measures.

“There are no remaining funds available from that federal appropriation to be allocated,” H. D. Palmer, spokesman for California’s Department of Finance, told the Sacramento Bee.

‘Point the finger at Washington’

A provision to extend the benefits was not included in President Joe Biden's initial infrastructure proposal or in the House Democrats' version released earlier this week. Rep. Alexandria Ocasio-Cortez (D-NY) plans to introduce legislation this week to extend all federal pandemic unemployment programs into next year. 

“I'm not entirely sure of the prospects of it,” she said in a town hall on Tuesday.

An estimated 7.5 million unemployed workers lost all benefits in September when those unemployment programs ended, according to estimates by the Century Foundation. Four million more workers lost some or all benefits in June and July after 26 states opted out of the federal unemployment programs early.

While Louisiana was the only Democratic-led state to cancel the programs prematurely, other Democratic governors faced political pressure as organizations like the Chamber of Commerce called for ending the extra $300 in weekly benefits, according to Stettner.

“Although the Republican governors were the ones that cut off benefits, I think it impacted all the state governors,” Stettner said. “The political argument for letting the benefits expire was strong, and they didn't have to do anything and could point the finger at Washington.”

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Yahoo Money sister site Cashay has a weekly newsletter.

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova

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