$400 extra unemployment benefits: when does it start?

Amid an impasse in negotiations over the next coronavirus stimulus bill in the United States, President Donald Trump last Saturday signed a series of executive orders vowing to provide further economic relief to Americans during the pandemic, with the extension of enhanced unemployment benefits among the measures.

Trump executive order seeks to give unemployed extra $400 a week

Additional unemployment insurance proved one of the major sticking points in two weeks of unsuccessful talks between Republicans and Democrats over an aid package, as negotiators failed to agree an outline deal by their self-imposed deadline of 7 August.

Trump’s executive order on unemployment benefits seeks to give those out of work an extra $400 a week on top of their basic benefits, replacing the $600 weekly boost that was distributed as part of the CARES Act. Known as the Federal Pandemic Unemployment Compensation scheme, this initiative expired at the end of July.

$400 is halfway between the amount Democrats and Republicans have been seeking. While Democrat negotiators Nancy Pelosi and Chuck Schumer wanted to maintain the $600 boost, GOP senators’ HEALS Act called for the figure to be reduced to $200 until October, before being replaced by a 70% wage-replacement scheme that would rely heavily on the ability of cash-strapped individual states to foot a good portion of the bill.  

$300 comes from federal funds, $100 to be paid by states

The president revealed that $300 of the $400 would be paid with federal money, while states would have to make up the remaining $100.

According to Trump’s executive memorandum, the renewal of enhanced unemployment insurance takes effect as of 1 August - with jobseekers able to claim extra benefits retroactively up to that point - and is to last until either Sunday 6 December or when the balance of the Department of Homeland Security's Disaster Relief Fund (DRF) falls to $25 billion - whichever happens earlier. According to the memorandum, there is currently about $70 billion in the DRF.

Speaking at his luxury golf club in Bedminster, New Jersey, on Saturday when he unveiled his plans to the media, Trump said of the $400 boost: "So that’s generous, but we want to take care of our people. Again, it wasn’t their fault, it was China’s fault."

Trump executive orders may face legal challenges

How quickly Americans can actually start to claim their additional $400 a week remains to be seen, however. According to the US Constitution, Congress has control over how to spend federal government funds, not the president, so the implementation of the measure could well find itself delayed by legal challenges.

In a news conference Trump said he was prepared for legal action, declaring: "You always get sued. Everything you do you get sued. But people feel that we can do it."

Echoing the words of Republican Senator Ben Sasse, Pelosi branded Trump's executive orders as "unconstitutional slop" in an interview with Fox News Sunday. However, US Treasury Secretary Steve Mnuchin - who was also involved in the failed relief-bill negotiations - warned Democrats against mounting a legal challenge.

"We’ve cleared with the office of legal counsel all these actions," Mnuchin told Fox News Sunday. "If the Democrats want to challenge us in court and hold up unemployment benefits to those hardworking Americans that are out of a job because of Covid, they’re going to have a lot of explaining to do."

Meanwhile, Forbes also notes that states may take time to get their systems organized to start paying the $100 that Trump’s plan calls on them to contribute - if they can afford it at all.

Cuomo: New York can't pay 25% of extra benefits

New York Governor Andrew Cuomo on Sunday said his state does not have the funds to kick in such a sum, for example, describing Trump's executive order as "impossible".

"What the president has done has made it impossible, impossible on the state," Cuomo told reporters, per The New York Post. "The concept of saying to states 'you pay 25% of unemployment insurance' is just laughable."

Unemployment soars in US amid pandemic

Unemployment has rocketed in the US during the coronavirus pandemic. The jobless rate reached as high as 14.7% in April, and although it has since fallen to 10.2%, this figure remains nearly 7% higher than February’s 3.5%. Per the Economic Policy Institute, moreover, it is worse than the nadir of the Great Recession, which saw unemployment reach 10.0% in 2009.

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