That is why there are lagging claims for unemployment and why it only gets worse.
Labor and unemployment experts worry that this could leave many unemployed Americans confused about what to do at a time when the money ordered by Trump is already delayed and Congress has failed to adopt a new unemployment benefit package. Some lawmakers say more financial relief is unlikely to reach Americans before November.
If Republicans and Democrats agree to new aid in the future, the unemployed who benefit from federal aid could be seen as a double whammy: they will get back from the new legislation, even though they have already been paid through Trump’s executive action.
“All this confusion just creates more administrative burdens as people stay longer without benefits, living standards fall and poverty rises after millions lose their jobs through the pandemic,” said Heidi Schierholtz, a senior economist. Director of Policy at the Institute for Economic Policy.
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A spokesman for the Wisconsin Department of Labor Development said the state was following instructions from the Federal Emergency Management Agency, which funds Trump’s lost wage support program, and the Department of Labor. However, FEMA said the states administer the program while the agency provides the funds.
It is not yet clear how widespread this is beyond Wisconsin. Colorado, Indiana, Georgia, Iowa, Alabama, Idaho, Arizona, Arkansas, Hawaii, Alaska and Nebraska have said they do not advise recipients to return the money.
The Louisiana Labor Commission said it would monitor Congressional legislation and added that it would ensure that all future guidelines were followed, as provided by the Department of Labor.
The $ 300 weekly benefit is retroactive to Aug. 1 for skilled workers. Wisconsin’s DWD does not expect to be forced to recover aid from plaintiffs, although its own website publishes a warning for unemployed residents who have tried to file for unemployment.
It remains unclear whether future congressional aid will have retroactive effect by Aug. 1, meaning payments will overlap, a spokesman said.
DWD expects that if Congress passes new legislation, it will begin after Trump’s lost wage support program expires for the week ended Sept. 5, so there will be no overlap, they added.
Still, a potential overpayment problem threatens to create problems in states other than Wisconsin if Congress allows retrospective payments to overlap, experts say. They warned that countries could face how to get their money back if people are overpaid.
“There’s a good chance Congress will set a date for a new support program, creating problems for countries that have already distributed money from the lost wage support program,” said Andrew Stetner, an unemployment expert and senior fellow at The Century Foundation’s think tank. .
“If Congress does not address this in a new relief package, there will be a situation of overpayment for many unemployed Americans across the country that will have to be resolved,” he added.
A “nightmare” scenario for unemployed Americans
Michele Evermore, a senior researcher and policy analyst at the National Labor Law Project, was concerned that something similar could happen when states rushed to introduce and launch Trump’s lost wage support program when it was adopted in August. The program replaces the $ 600 federal unemployment benefit, which expired in late July.
“It would be a nightmare for both unemployed Americans and state unemployment systems if people were forced to return the money,” Evermore said. “Wisconsin isn’t necessarily wrong in sharing a disclaimer. It’s worth letting people know that this temporary benefit is uncertain.”
In August, President Trump called for federal-funded unemployment benefits of $ 300 a week for workers who lost their jobs due to the pandemic after talks on coronavirus aid stalled in Congress.
Trump has ordered FEMA to manage the $ 300 a week support program through its Disaster Relief Fund, which will be limited to $ 44 billion. It was to last until December. However, experts estimate that the states will spend the funds in about five or six weeks from the beginning of August, threatening to leave Americans without jobs without additional assistance within a few weeks after Congress failed to adopt another aid package this month.
And some states, including Arizona, Missouri and Montana, have already run out of funds. And Texas said Wednesday that the additional $ 300 payment will expire for the week ending Sept. 5.
The latest failed deal in Washington may have been the last chance for lawmakers to reach an agreement on a stimulus bill before the November election. Some economists say the lack of aid could lead to problems with household spending, which accounts for more than two-thirds of US economic growth.
According to the Department of Labor, nearly 30 million Americans receive unemployment benefits. State unemployment programs cover only about 41% of someone’s lost wages, according to data from the Brookings Institution.
“Some people cannot cover their basic needs with regular state aid. It will get harder as the economy recovers, “Stetner said.” People may be forced to make more drastic decisions by attacking their 401 (k) or selling their homes, creating a greater divide of inequality in America. “
Almost all states except South Dakota have applied through FEMA. So far, at least 22 of them have started paying the money.
States usually cannot pay for unemployment insurance that is not approved by Congress. Thus, they are forced to reconfigure their systems to allocate funds, which leads to long delays.
Wisconsin, a key swing state in the U.S. election, was approved to provide an additional $ 300 a week in federal aid for three weeks to those receiving unemployment due to lost wages from the pandemic. And additional funding weeks will be determined on a weekly basis thereafter.
But the state warned last week that it could take eight weeks to reprogram the state’s unemployment system to pay off the funds.
States have no guidelines without new legislation
U.S. Department of Labor guidelines suggest that the Trump administration’s program to support lost wages must be completed if Congress passes new legislation providing additional unemployment benefits, including an extension of the federal unemployment pandemic compensation program that has expired. in July.
However, the question of whether people should return the money provided by Trump’s program cannot be answered until the new legislation provides guidance, according to the Ministry of Labor.
In essence, the federal government says it has yet to determine how any overpayments under the program will be paid. This has left the door open for countries like Wisconsin to interpret how to get their money back, according to Victor Forberger, a Wisconsin-based labor and employment lawyer who specializes in unemployment cases.
“Wisconsin has made an administrative interpretation, as opposed to what the law allows,” said Forberger, who added that the state was “very aggressive” when it came to recovering overpaid amounts.
Of course, Wisconsin may exceed its authority, some experts say, because there is nothing in this declaration to allow states to require people to pay aid for losses.
The Department of Labor directed the United States TODAY to contact FEMA for comment.
“FEMA provides the funding, the states administer the program,” FEMA said in a statement today. “FEMA cannot assess whether people will be entitled or not eligible for lost wages. Eligibility determinations are made at the state level. “
How could people get their money back
It is not clear how people would return the money, but there are several ways to make it happen.
If Congress adopts a new boosted unemployment program, people could cut their federal payments retrospectively to cover the overpayments, Schierholz said. Or they could receive full payment under the new program, but have to repay what is due, she added.
Contributions: Brent Schrotenboer and Charisse Jones
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