Trump’s Unemployment Benefit Plan Won’t Work in California, Newsom Says

Monday, August 10, 2020

Publication: Los Angeles Times

With millions of Californians jobless during the COVID-19 pandemic, Gov. Gavin Newsom said Monday that the state would face “massive” budget cuts if it carried out President Trump’s plan to have states provide $100 of a $400 supplemental weekly unemployment benefit.

Newsom and legislative leaders called on federal officials to overcome a stalemate involving Congress and the president to provide additional funding for states now that a $600 weekly unemployment payment from the federal government has expired. He noted that the plan would cost the state at least $700 million per week and up to $2.8 billion if the Coronavirus Aid, Relief and Economic Security Act funding is depleted.

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If Trump’s order only provides $300 a week, California would have to come up with the same amount to maintain the $600 supplemental payment.

Assemblyman Phil Ting (D-San Francisco), chairman of the Assembly Budget Committee, said Monday that legislative leaders are working to find a solution.

“Supplemental unemployment benefits have worked in the short term to help many families keep a roof over their heads and put food on the table,” Ting said. “That stability is now at risk. If federal payments fall short of $600 per week, California must do all it can to make up the difference, as long as the jobless rate remains high.”

Ting is a leader of a legislative working group that proposed the state consider borrowing money from a federal trust fund to extend supplemental unemployment benefits. The state has borrowed from that fund to help pay benefits to the more than 9 million Californians who have applied for unemployment.

Traditionally, the federal loans are paid back by increasing payroll taxes paid by employers.

“We’re discussing with the governor’s office on how to move forward on this aid, including ways to fund it without putting additional burdens on small businesses,” Ting said.

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