WASHINGTON — The extra $300 federal boost to unemployment benefits created under an executive action signed by President Donald Trump is already running out for some states, less than a month after the program launched.
Both Texas and Tennessee, some of the first states to start paying the extra benefit, were notified by the Federal Emergency Management Agency this week that they will no longer receive funding to provide the $300 under Trump’s new Lost Wages Assistance Program.
Montana, one of the first states FEMA approved to participate in the program, was also told funding for the program was to be cut off after the week ended Sept. 5. Iowa, which just started paying out the extra $300 benefit last week, said it too had been notified from the federal government that the program has ended.
And in Arizona, the Department of Economic Security recently warned that the extra payment could end in the state as soon as this week.
Why is the money running out? Under Trump’s Aug. 8 executive memo, FEMA set aside $44 billion from the disaster relief fund to help pay for the extra benefit. So far, the agency has paid out $30 billion of that limited pot, to the 48 states, plus Guam and the District of Columbia, that were approved for the program.
What about other states applying for the program? Regardless of where the states and territories are in the process of obtaining the funding from FEMA, an agency spokesperson told POLITICO it will provide money for six weeks of the $300 benefit to every state and territory that has applied for the program by Sept. 10.
How did we get here? The money is supposed to be a stopgap as Congress remains stalled over whether to restart payments of $600 in extra federal benefits that expired July 31. Democrats want to extend the $600 through January, but Republicans say that payment is too much and instead want to provide $300 until Dec. 27. Senate Democrats on Thursday blocked a scaled-down, $500 billion Republican coronavirus relief measure, weakening the chances that Congress will approve another package before the November election.
How many people are relying on the benefit? The announcement that extra unemployment funding is already running out for some states comes as new applications for jobless benefits in state programs have started to flatline, suggesting the economic recovery could be slowing.
Some 884,000 new unemployment claims were filed in state programs last week, the Labor Department reported Thursday. An additional 838,916 applied for benefits under the Pandemic Unemployment Assistance program, created for those not traditionally eligible for unemployment benefits like the self-employed and gig workers.
In total, nearly 30 million unemployed Americans are receiving jobless benefits.