The Biden administration proposed that the Blue States extend the unemployment allowance, but they all rejected the offer.

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Democrats of the Biden administration and parliament design NS The biggest profit cliff in US history And as more than 7 million unemployed people saw the federal benefits suddenly end on Workers’ Day, they tried to change the subject.Meanwhile, the administration is quiet Offer The Blue States ran into the most difficult opportunity to continue paying residents using previously provided federal funds. But “no state has said it plans to do so,” he said. New York Times.. Why?

Some background is needed.States usually gather around $ 30 billion Annual payroll tax to support the state’s unemployment allowance. It usually lasts up to 26 weeks per recipient.Before the pandemic, about 2000000 People have collected state unemployment checks.

The last 18 months have not been normal.First a pandemic, then Congress Unprecedented Temporary Federal Unemployment Allowance Package. As is common in recessions, this included extended benefits for those who ran out of status checks. However, it also included the first ever federal program called Pandemic Unemployment Assistance. It quickly became the country’s largest unemployment allowance provider. Simple qualification criteria, Generous benefits, When Unprecedented scam..Congress also gives all unemployment benefits $ 600 a week (And recently, $ 300 a week)at first”Make the wholeThe worker was fired due to a pandemic shutdown.

As a result, most early recipients collected Details of unemployment allowance From salary.As a whole, with the condition Federal government Benefit spending surged by more than $ 800 billion. Checks eventually peaked at over 30 million recipients a week before declining as the state economy resumed. Some extensions continued these temporary federal benefits throughout Labor Day.

But during the summer, another unprecedented event happened — simply stated. opt out Of paying temporary federal benefits.Final half Of all the states that opted out, most were red states, led by Democrat John Bel Edwards, with the exception of Louisiana. Said He was trying to find a “reasonable balance” between helping the unemployed and helping a company that says it’s having a hard time finding someone to meet the ranks of its employees. “

As the graph below shows, most federal benefits will be paid in the blue states. If these benefits suddenly expire, you will eventually hit the Labor Day cliff.

source: Ministry of Labor When Congressional Research Service..

August 19 letter Written by Treasury Secretary Janet Yellen and Labor Secretary Walsh, it provided the almost blue states with a way to keep profits flowing.

The American Rescue Plan has allocated $ 350 billion to state and local governments to support the community’s continued response to the pandemic. .. .. .. In states where it currently makes sense to gradually reduce income support for the unemployed based on local economic conditions, to cover the cost of providing support to the unemployed after September 6th. You can activate the American Rescue Plan Fund.

This will return you to the first question. If the government thinks it “reasons” for the unemployed blue states to continue to pay these profits, why not anyone choose to do so? There are several possible reasons.

First, the $ 350 billion federal funding provided to the state in March may have already been talked about, even if it hasn’t been fully used.For example, New York soon used some of those funds Providing new unemployment benefits to undocumented workers..The same is true for other states Presentation We plan to use these funds for local priorities.

Second, without new federal funding, the Biden administration’s offer would only require higher state costs. Like the Congressional Budget Office, not only does the cost of managing such expanded benefits cost the state, but their continued availability is the state’s benefits, and ultimately the state’s payroll tax. It will push up billing even further. Point out..

Third, states offering such benefits today will be forced to repeat such expansion whenever temporary federal benefits expire in the future. The state has long shown to be reluctant to pay for such expanded benefits. For example, following the Great Recession, there are 28 states, including large blue states such as California, Illinois, New York, and Pennsylvania. Adopted eligibility criteria As soon as all federal funds expired and the state was expected to bear half the cost, it ended payment of some benefits. Why does the state set a precedent for paying such profits when all costs may be incurred by them?

After all, it’s no wonder that even the blue states rejected the Biden administration’s offer to continue to provide unprecedented profits after the federal funds dedicated to them expired. The only real surprise is if the administration actually believed that some might do so.

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tag: think tank

Original author: Matt Weidinger

Original location: The Biden administration proposed that the Blue States extend the unemployment allowance, but they all rejected the offer.

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