States Wary of Trump’s Move for Them to Kick in on Federal Aid

August 10, 2020by Yueqi Yang, Bloomberg News (TNS)
New York Gov. Andrew Cuomo speaks during a media briefing at the Office of the Governor of the State of New York on July 23, 2020, in New York City. (Jeenah Moon/Getty Images/TNS)

A day after President Donald Trump took executive action to offer $400 per week in supplemental unemployment benefits, including 25% he said should be kicked in from state coffers, governors are pushing back.

The leaders of states including New York and Michigan said Trump’s plan ignores the cash-strapped reality of most states, which have deep budget holes as a result of the coronavirus pandemic.

New York Gov. Andrew Cuomo said the president’s order was based on “shaky ground legally” and it was “impossible” for states to pay.

“The concept of saying to states ‘you pay 25% of unemployment insurance’ is just laughable,” Cuomo, a Democrat, said on a call with reporters on Sunday. “The whole issue here was getting states funding.”

Michigan Gov. Gretchen Whitmer, also a Democrat, said Trump is ordering states “that are facing severe holes” in their budgets to pay 25% of the funding while the federal government cuts funding for unemployed workers.

“His refusal to provide full federal funding to states across the country to help us combat this virus will hurt the brave men and women on the front lines,” Whitmer said in a statement.

Unlike the federal government, which can run massive budget deficits, many states must balance their budgets each year — and if there’s a revenue shortfall, they must cut services, raise taxes or use other tactics.

Democrats and Republicans are trillions of dollars apart on overall spending and on key issues. Trump’s executive actions to bypass the Congressional impasse may face legal challenges, although House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer stopped short of saying that Democrats would attempt to stop them in court.

White House economic adviser Larry Kudlow defended Trump’s order Sunday on CNN’s “State of the Union,” saying estimates from the Treasury Department show states will be able to provide the extra dollars, because they haven’t spent all the money that was allocated to them under the CARES Act passed in March.

Asked how many states will be able to pay, Kudlow answered, “We will probably find that out today and tomorrow as we make our canvass.”

The Center on Budget and Policy Priorities said in a statement that Trump’s executive actions will “force states to choose” between letting the federal supplemental jobless benefits end entirely, or slashing other parts of their budgets.

Ohio Gov. Mike DeWine, a Republican, said on CNN that he doesn’t know yet if his state can afford to pay.

“We have set some money aside, a significant amount of money, for testing. Testing is going to be very, very important.” DeWine said, adding he’s “reviewing this issue.” Meanwhile, he urged Congress to “get back in and negotiate.”

The administration is directing states to use part of the $150 billion Coronavirus Relief Fund, while the federal government will tap $44 billion of the existing Disaster Relief Fund. To participate, states would have to establish a new measure, the “lost wages assistance program.”

Economists estimate the money discussed by Trump could be enough for one to two months of payouts.

Treasury Secretary Steven Mnuchin said Sunday on Fox News that the 25% match would be “coming from money we already gave the states. So this is effectively 100% paid for by the federal government.”

———

©2020 Bloomberg News

Distributed by Tribune Content Agency, LLC.

Economy

Economists Say Pandemic Needs to End Before U.S. Economy Returns to Normal
Economy
Economists Say Pandemic Needs to End Before U.S. Economy Returns to Normal
September 23, 2020
by Tom Ramstack

WASHINGTON -- Economists warned Congress Tuesday of long-term damage to the U.S. economy if the coronavirus pandemic is not brought under control soon. They cautioned during two separate congressional hearings that the slow improvement to the economy since the pandemic hit the United States eight months... Read More

Mnuchin, Powell Say Congress Needs to Pass More COVID-19 Relief
Economy
Mnuchin, Powell Say Congress Needs to Pass More COVID-19 Relief

WASHINGTON — Treasury Secretary Steven Mnuchin, Federal Reserve Chairman Jerome Powell and representatives from both parties agreed on at least one point at a hearing Tuesday: The economy needs more relief from Congress to sustain the recovery from the coronavirus. Despite that broad consensus, Congress, paralyzed... Read More

Fixing Unemployment Insurance for Better Economic Recovery
Economy
Fixing Unemployment Insurance for Better Economic Recovery
September 18, 2020
by Kate Michael

WASHINGTON — Emergency expansions to Unemployment Insurance provided critical support to workers across the country during the early months of the pandemic. But the major component of these expansions, an additional $600 in weekly benefits, expired at the end of July. With lawmakers continuing to be... Read More

Democrats Weigh Next Steps After Trump Backs Bigger Stimulus
Congress
Democrats Weigh Next Steps After Trump Backs Bigger Stimulus

WASHINGTON — Some House Democrats are keeping pressure on House Speaker Nancy Pelosi to bring a new coronavirus relief bill up for a vote next week as they look to signal to voters that the party is pursuing a deal to bolster the economy. Pelosi said... Read More

Fed Signals Rates Will Stay Near Zero for at Least Three Years
Federal Reserve
Fed Signals Rates Will Stay Near Zero for at Least Three Years

The Federal Reserve left interest rates near zero and signaled it would hold them there through at least 2023 to help the U.S. economy recover from the coronavirus pandemic. The Federal Open Market Committee “expects to maintain an accommodative stance of monetary policy” until it achieves... Read More

Despite Pressure for COVID-19 Relief Deal, Stalemate Continues
Congress
Despite Pressure for COVID-19 Relief Deal, Stalemate Continues

WASHINGTON — Speaker Nancy Pelosi on Tuesday headed a call from her members to commit to keeping the House in session until there’s a coronavirus relief deal, but the vow does little to break the stalemate in bipartisan negotiations that is at the heart of Democrats’... Read More

News From The Well
scroll top