Economy

Only Two States Paying Benefits Under Trump Order

SK Ashby
Written by SK Ashby

The $600 per week pandemic unemployment program expired nearly a month ago and congressional Republicans have refused to renew it. The GOP's latest stimulus proposal doesn't include the program even at a reduced level.

Even the Trump White House can see that consumer spending and the economy are going to suffer without those billions being pumped into the economy each week so Trump issued an executive order to haphazardly resurrect the program by order the Federal Emergency Management Agency (FEMA) to distribute aid without congressional approval.

Under Trump's orders, FEMA can distribute up to $300 per week or $400 if states contribute, but as of today only two states are paying out under the program and neither are offering the extra money.

Participation is up to individual states, and as of Monday just two -- Arizona and Texas -- had begun paying out the supplemental $300 a week in benefits. Of the other states that have received funding for the program, Missouri hopes to start paying by this weekend; Utah and New Mexico anticipate it will be a few weeks before payments reach residents; Colorado is targeting mid-September; Iowa didn’t provide a timeline; and Louisiana didn’t respond to requests for comment, though it said on Aug. 19 it expected to distribute benefits “within the next week.”

Up to 30 states have said they'll participate in the program, but suffice to say they won't actually be operational anytime.

Based on the current timeline of events, they may never be operational.

There's only $44 billion in funding available for the unemployment program at FEMA and those funds could be exhausted sooner rather than later. Historically large wildfires are raging in California. Hurricane Laura is currently projected to make landfall as a category 3 storm on Wednesday night. And on top of all that, Congress will have to fund the federal government to prevent a shutdown on October 1st. Shutdown negotiations will almost certainly include funding for FEMA and stimulus of some description.

I think it's fair to say that at least some people in a handful of states will benefit from this program for a matter of weeks or a month, but it's not a long term solution or even much of a short term solution. Even if Trump's program were paying out in every state, consumer spending would still be up to $15 billion lower every week than it was under the pandemic unemployment program. Trump's program is currently only paying out in two states with a small handful of others joining them soon. That's not enough to move the economic needle.

Trump's program will deplete FEMA at a time when we need it most -- peak wildfire and hurricane season -- and it won't boost the economy by a significant amount. So, in that respect, it's the perfect Trump program: mostly useless if not outright harmful.

It's worth highlighting that congressional Republicans who believe enhanced unemployment benefits should be lower or eliminated entirely do not seem to care about Trump's executing spending policy.

Anyone who was at risk of losing their homes or missing their bills will have crossed that line by the time most states start this program.