State: Extension of jobless benefits easiest to manage
As Congress starts work on President Joe Biden’s proposals to extend pandemic unemployment benefits, the acting director of the Oregon Employment Department says straightforward extensions that are on the table will be easier to manage.
But David Gerstenfeld also said he and counterpart agencies in other states would like as much lead time as possible to prepare for any changes and avoid interruptions in benefit payments. States pay benefits, but the U.S. Department of Labor oversees them.
The latest extensions, which Congress approved at the end of December, are scheduled to end March 13.
Federal benefits for self-employed and gig workers under a program known as Pandemic Unemployment Assistance. These workers did not qualify for any benefits until they were included for the first time in the CARES Act last spring.
Federal benefits, on top of 26 weeks of regular benefits from the state unemployment trust fund, under a program known as Pandemic Emergency Unemployment Compensation.
Weekly federal supplemental benefits of $300. They had been $600 for four months in 2020, and a diversion from the Federal Emergency Management Agency kept payments going for five more weeks through Sept. 5.
A balance from federal funds, instead of the state trust fund, under Work Share programs for employees whose hours have been cut 20% or 40%.
“From the summaries I’ve seen of what is being discussed right now, I didn’t see brand-new programs being created, which is certainly a more challenging issue than just extending the time frame of some of the programs,” Gerstenfeld told reporters Wednesday on a weekly conference call.
“Of the vastly more complicated options that have been discussed in the past, it does not look like those proposals are actively being talked about now. So that is promising.”
Some proposals would have capped benefits at a share of an employee’s former wage.
Gerstenfeld also said he hopes Congress will act before the March 13 cutoff. Congress let the supplemental benefits in the CARES Act expire July 25, and all benefits expired one day before then-President Donald Trump signed the current extension Dec. 27.
The Employment Department was able to continue many benefit payments uninterrupted, but some people are having to wait for benefits because federal law imposed some new identity requirements for claims.
“Certainly, the more lead time we have, the easier it will be,” Gerstenfeld said.
“One of the problems we face is the timing of knowing what the program is and being able to get guidance from the Department of Labor before the benefits are supposed to be paid. We will have to wait and see what ultimately is passed to see what we need to do in our systems to implement the new programs.”
President Biden has proposed extending all these programs for about six more months, to the end of the federal budget year Sept. 30. He also proposes to increase the weekly supplemental benefit from $300, which is at the federal minimum wage, to $400. The money is part of his $1.9 trillion plan for pandemic recovery.
Oregon Sen. Ron Wyden, the Democrat who now leads the Senate Finance Committee, has said he would like a $600 supplemental benefit, the same amount he secured in the CARES Act for four months last year. But he says he supports the rest of what Biden wants.
Wyden reacted Wednesday after Federal Reserve Chairman Jerome Powell spoke in New York about the U.S. economic outlook, which Powell paints as bleaker because 5 million people have left the U.S. workforce and the jobless rate is closer to 10%, not the official 6.3%.
“Even more troubling, Chair Powell emphasized that while the situation has improved for upper-income workers, there has been no progress for workers of more modest means. That bears repeating — there’s been no progress for those workers who are the least financially secure,” Wyden said. “Chair Powell’s assessment reiterates the need for the strongest possible benefits package in our COVID relief bill, which is why I’m going to continue to push for at least a $400 weekly boost and six months of enhanced benefits.”
The Senate Finance Committee and the House Ways and Means Committee have authority over tax legislation. Unemployment benefits come largely from payroll taxes.
The House committee plans to take up initial legislation proposing an Aug. 29 cutoff for all the extensions.
Chad Stone, chief economist for the liberal-leaning Center on Budget and Policy Priorities, argued for the Sept. 30 deadline.
“Unemployment, particularly among workers of color and workers without college degrees, will likely remain elevated in the fall,” Stone writes.
“In addition, extending benefits an additional month better aligns their expiration with a time when Congress will be in session and focused on budget matters (with the fiscal year ending Sept. 30) and, thus, well positioned to further extend benefits.”
Congress typically takes an August recess that runs through Labor Day.