How long could the extra unemployment benefits be delayed?

When the coronavirus pandemic sent the economy careening off a cliff in March, Congress and the White House were quick to take steps to cushion the blow. However the unemployment benefits as part of the CARES Act were less quick to get out to the people who needed them as state unemployment systems buckled under the demand.

Congress once again is working to avoid another cliff with programs that help the most vulnerable set to expire at the end of the month. On top of that a government shutdown looms all while cases of and hospitalizations for covid-19 surge pushing many states and localities to reinstate lockdowns on par with the spring. The two could put all sides' feet to the fire and get some legislation out the door but those same state systems could once again have difficulty handling the rising demand.

Congress is working against the clock

Congress passed a short-term spending bill last week to keep the government funded until 18 December. Failing to reach a deal by then and the government will shut down. The delay to get a more comprehensive spending bill gave Congress time to find agreement on proposals to get a relief package out the door before the lawmakers go home for the holidays. The one that has the most support at the moment is a $908 billion plan to meet some of the most pressing needs.

That bill still had two main sticking points, mainly funding for the states and liability protection for businesses. These two parts of the bill have been broken off into a separate bill to leave a $748 billion lifeline bill. The bill would provide for a weekly expansion of unemployment insurance, funding for small businesses, money for schools, rental aid, food aid, and a one-month eviction moratorium.

These are areas that both parties agree on to help people through the first quarter of next year expected to be the worst. By separating it from the $160 billion rump left over there is a better chance that the much-needed funding can pass. However even if the legislation passes the unemployment aid might not reach those who are laid off right away.

Antiquated unemployment IT systems

As was widely reported in the spring the states have antiquated IT systems for handling unemployment claims. The systems were set up 40-plus years ago and running software developed when Steve Jobs was a four-year-old. The systems are designed to handle a certain load but the pandemic layoffs caused those systems to buckle under the deluge of claims.

Additionally, states over the years have made it harder for the jobless to claim benefits. In June Michele Evermore, a senior policy analyst with NELP testified to the US Senate Finance Committee that in addition to putting in more restrictions to filing for unemployment insurance she said “States have programmed their computer systems to pause applications at every decision point, which can generate multiple eligibility determinations and denials,”

The result of these two factors caused the system to collapse under the weight of the unprecedented number of claims. Some states have rushed to make fixes like New Jersey which used $50 million of is coronavirus relief funds to update its systems. The systems will be put to the test again with the number of people filing unemployment claims increasing again as new lockdowns are being put into place to stem the tide of infections yet again.

The bureaucratic hurdle to getting unemployment benefits out.

Another possible delay if the bill is signed into law, will come when the US Labor Department issues guidance on the rules to the state labor agencies. This may only take a few days but then the states need to interpret the rules and put them into their computer systems. To avoid fraud, which plagued the California unemployment system the last time, the systems will need to be tested.

So depending on what steps the states took after the last rollout those who are out of work may have to wait for a couple of weeks or they may have to wait months. That is if Congress can beat the deadline to avoid another dive off the cliff.