Trump on Unemployment – Latest News on the $400 Extension

On August 8, President Donald Trump signed a series of executive orders concerning the ongoing COVID-19 pandemic. His orders came amid intense gridlock between Democrats and Republicans in Congress, and one aspect of the orders addressed a particularly tough sticking point for both parties: federal unemployment benefits.

While Democratic lawmakers fought to preserve the weekly $600 federal unemployment payments, Republicans sought to reduce the payments to $200. President Trump’s order essentially struck a middle ground—landing on $400 payments—but there’s a bit more to it than that.

Here’s what you need to know about the latest developments in unemployment payments.

What is Trump’s $400 Plan for Unemployment?

At its core, President Trump’s unemployment order redirects money from the Department of Homeland Security’s Disaster Relief Fund. That makes it fundamentally different than the previous $600 payments, which were authorized by a Congress spending bill. 

Congress can decide to spend more money, while the president is largely limited to the money allocated to the Executive branch by Congress (this is known as the “power of the purse”). Since the president can’t create new spending, his order instead allows for the redirection of up to $44 billion from the Disaster Relief Fund for making these unemployment payments.

It’s also worth noting that, like the original $600 payments, these disbursements are in addition to whatever an unemployed person was already receiving from the state unemployment program. States don’t automatically receive these funds from the president’s executive order, they must apply for them. The deadline for governors to apply for this unemployment program—known as Lost Wages Assistance—is September 10.

However, there’s a big caveat with the president’s $400 plan. While the executive order authorizes $400 in extra unemployment payments every week, only $300 of that money comes from the federal government. Therefore, it may be more accurate to say that the president’s executive order authorized $300 federal unemployment payments.

The last $100 is supposed to come from states. The White House says states should have enough money left over from previous rounds of COVD-related economic stimulus to cover those extra $100 payments. If a state doesn’t have sufficient funding to add $100 to unemployment benefits, then it only has to continue to offer the standard unemployment assistance that the state’s program provides. In other words, if your state can’t afford to kick in 25% of the extra costs, the extra $400 unemployment becomes an extra $300 payment instead.

Unemployment Update Aug. 18, 2020

The first application approvals started coming in over the weekend. On August 15, FEMA (which manages the Disaster Relief Fund) announced that Arizona, Iowa, Louisiana, and New Mexico were approved to receive the $300 per week unemployment payments. On August 16, a follow-up FEMA announcement added Colorado, Missouri, and Utah to the list of states that have been approved for the Lost Wages Assistance grants.

We’ve also seen states flatly refuse unemployment funding. South Dakota Governor Kristi Noem issued a statement on August 14 that said “South Dakota is in the fortunate position of not needing to accept it.” On August 18, an Associated Press survey reported that Mississippi’s Governor Tate Reeves also refused to apply for the program. Reeves called the program too expensive. 

It’s unclear whether any other states are considering a similar refusal of funding, but many governors have signaled a hesitancy to apply. In the immediate wake of the executive orders, several governors and state officials said they wanted to better understand the funding obligations for states before applying. The August 18 survey from the AP found that 30 states were still evaluating the program and trying to decide whether to apply. In some states, such as North Carolina, the main question is whether to simply accept the $300 federal funding or attempt to find state funds available to boost the benefits up to $400.

While some states have been approved for federal unemployment funding, it’s still somewhat unclear when payments will actually start reaching the unemployed. FEMA has said the first $400 unemployment payments could go out as soon as August 29. However, this date is based on the average amount of time it takes for a state to alter its unemployment program. After giving this estimate, FEMA added that some states may independently expedite the process, and at least one state has promised to start disbursing the funds within one week of receiving approval for the program.

Do Your Part to Smooth the Process

At this point, many aspects of unemployment benefits remain uncertain. Unless you’re a politician that has sway on a state or federal level, you probably don’t have a lot of power to help clarify any of those uncertainties. That’s cold comfort to those bearing the brunt of the COVID-induced economic crisis, but there are steps you can take now to ensure that the unemployment benefits reach you as quickly and smoothly as possible.

First, ensure that you’ve asked your state’s unemployment office to directly deposit benefits into your banking account (this process varies between states). That way, once officials figure out how much money you’re supposed to get, you won’t have to wait for a paper check to be printed and mailed out to your mailbox. 

You can get your payments even sooner by signing up for a RoarMoney account, which deposits your paychecks and government benefits into your account up to two days early. Signing up takes just minutes, and you can start by downloading the MoneyLion app.

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