A Republican proposal to replace the expiring $600 weekly emergency unemployment benefit with variable amount could result in weeks or even months of delayed payments in some states.
Older computer systems that took weeks to set up for the initial federal unemployment enhancement would need to be reprogrammed again twice under the new GOP plan.
In Florida, state Rep. Anna Eskamani, a Democrat from Orlando, said the state has not even gotten the original supplemental benefit to everyone entitled to it.
“So the idea of changing the current process that has taken us months to put into place, that is still not even perfect, is a scary thought,” she said.
“These changes, whatever they end up being, are going to create more bureaucratic layers for people to get the relief they need. Meanwhile we have bills to pay, we have to put food on the table, we have medical expenses, and a lot of people are suffering.”
How to handle unemployment is a fiercely contested part of the debate as Congress negotiates the latest relief legislation.
Democrats want to bring back the federally funded $600-a-week unemployment bonus that is expiring, saying it’s a way to keep families and the economy afloat in a time when there are far more people out of work than jobs available.
Republicans argue the current amount is so high that it encourages people to remain on unemployment. They want to replace it in two steps: First, by changing the amount to $200 a week through September. Then they want to switch that flat rate to a percentage in which the unemployed would receive benefits equal to no more than 70% of their previous incomes in November and December.
Because the $600 federal benefit comes on top of state unemployment, many people are indeed making more money by not being employed. University of Chicago researchers found that two-thirds of people who lost jobs in the pandemic were receiving more in unemployment benefits than what they had been earning while working.
The debate isn’t only about the economy and ideology. It’s also about what’s doable technologically, especially on software many states use that dates to the 1970s.
Some states took a month to handle the initial $600-a-week benefit when it went into place this spring, leaving laid-off workers in the lurch as the numbers of unemployed skyrocketed. Last week, more than 16 million Americans were receiving unemployment benefits.
“Anything other than a flat rate would take time to program in our system because it would require individual income calculations for hundreds of thousands of Ohioans receiving unemployment benefits,” Bret Crow, a spokesman for the Ohio Department of Job and Family Services, said in an email.
He said it wasn’t clear how long it might take to switch the system.
In Tennessee, the Department of Labor and Workforce Development says it would need “ample time” to make changes; just how much depends on what the policy is.
Washington was among the first states to implement the $600 benefit boost. But Mike Faulk, a spokesman for Gov. Jay Inslee, a Democrat, said big changes would slow things down there, too.
“We are concerned by any large-scale changes to the federal pandemic unemployment benefits,” Faulk said in a statement. “It could delay benefits to hundreds of thousands of Washingtonians and put a significant burden on state unemployment agencies.”
The state’s employment security commissioner, Susan LeVine, wrote the state’s congressional delegation this month telling them, “Simply put, state unemployment systems cannot flip a switch overnight on Aug. 1, 2020, and will require a transition period.”
Democratic California Assemblyman David Chiu said the state is struggling to provide benefits on time as it is.
“I have no confidence they’ll be able to adjust,” he said. “To me, this is why I really hope that Congress will simply extend the $600 a week to make this as seamless as possible.”
Annelies Goger, a fellow at the Brookings Institution, a left-of-center public policy organization, said even a change in the flat-rate boost could be delayed because states need to wait for federal guidance before implementing changes. Switching to a percentage of income would be even harder, she said.
For instance, it would be hard to gather the data needed to determine the previous incomes for people who were self-employed or were gig workers. Such workers are generally not eligible for unemployment benefits, but they are under coronavirus relief legislation.
And Goger said it would take a lot of resources to modify a program twice that is scheduled to end in December.
“Most states are still very overloaded with initial claims every week and are struggling to keep up with bottlenecks in the adjudication process and getting payments out accurately in a timely manner,” Groger said in an email.
“Any resources diverted from getting through those backlogs will delay getting relief to families that are struggling to pay rent and put food on the table.”
U.S. Senate Minority Leader Chuck Schumer, a New York Democrat, said on the Senate floor Monday that the fallout from both delays and benefit reductions could be significant.
He pointed to an analysis from the left-leaning Economic Policy Institute that found cutting the boost to $200 a week would result in 3.4 million more layoffs.
“The economy crashes, people are hurt, they get kicked out of their homes, they can’t feed their kids,” Schumer said. “The Republican proposal on unemployment benefits, simply put, is unworkable. It will delay benefits for weeks if not months as we slide into a greater degree of recession.”