(CBSNewYork) — With unemployment near record highs and Congress locked in a standoff on a second round of stimulus, President Trump issued an executive order meant to address the problem. The order, issued Saturday, extends additional weekly unemployment insurance payments in the amount $400.
The first round of stimulus, which included $600 weekly unemployment insurance payments from the federal government, ran out at the end of July. Those payments were meant to counteract the economic effects of the coronavirus pandemic and came on top of whatever each individual state provided.
It’s unclear whether the president has the authority under the Constitution to establish unemployment benefits by executive order. It’s also not known yet if Congress, which traditionally controls spending, would yield the power of the purse. Were these and other issues to work out in the president’s favor, any payments would still likely be delayed by weeks. Unemployment insurance is disbursed by individual states through their individual systems. Re-calibrating them would likely require at least a few weeks.
And there’s still another issue. The order also requires individual states to contribute $100 of each $400 payment. Most states are required to balance their budgets. And many states currently face extreme budget shortfalls brought on by coronavirus and the shuttering of local economies. Where their $100 portion would come from is unclear.
Here’s where some states stand as of Monday.
“The state does not have an identified resource of $700 million per week that we haven’t already obliged. There is no money sitting in the piggy bank of the previous CARES Act to be re-prioritized or reconstituted for this purpose. Simply does not exist,” explained California governor Gavin Newsom. “And for the state to absorb $700 million per week, potentially close to $3 billion per week – when, not if, the identified $70 billion fund the President is looking to draw down from – would create a burden the likes which even a state as large as California can never absorb without, again, massive cuts to important services.”
On Face The Nation, Connecticut governor Ned Lamont saw the order as untenable “Look, that would cost us about $500 million dollars between now and the end of the year. I could take that money from testing. I don’t think that’s a great idea. I could take that money from, you know, mass disinfecting for our schools. I don’t think that’s a great idea. In fact, I think the president’s plan is not a great idea.”
A spokesman for Maryland governor Larry Hogan responded via email that “we will wait on new guidance from US Department of Labor before looking at any (unemployment insurance) changes.”
Massachusetts’ Republican governor Charlie Baker had no comment over the weekend. But multiple Democratic representatives did.
Representative Ayanna Pressley tweeted “Don’t let the occupant of the White House distract you. He just unilaterally cut Social Security and your unemployment benefits. In the middle of a pandemic.” Representative Joe Kennedy tweeted “He’s breaking the law to cut your Social Security.”
Michigan governor Gretchen Whitmer said “it’s time for the president to do the right thing, stop playing political games, and work with Congress on a recovery package that will help us fight this virus, protect working families, and send our kids, educators, and support staff back to school safely.” She pointed out that the president “cut federal funding for unemployed workers and is requiring states that are facing severe holes in our budgets to provide 25% of the funding.”
Governor Cuomo called the plan “laughable.” In a phone interview, he said it would be “impossible, on the state. The president by his executive order has us paying 25% of the unemployment insurance. That could cost us $4 billion. It’s just an impossibility.”
Phil Murphy, the Democratic governor of New Jersey, said Monday “States are going broke and millions of Americans are unemployed, yet the solution calls for the states to create a new program we can’t afford to begin with and don’t know how to administer.”
A spokesman for Tom Wolf, the Democratic governor of Pennsylvania, said “reducing the benefit by a third will make it harder for families to get by and it places a larger financial burden on states.” State officials are studying the impact of the cuts.