Half of states run out of funds for Trump’s $300 unemployment expansion

Half of all states have depleted their funding for the extra $300 in weekly unemployment benefits that President Trump ordered after failing to strike a deal with Congress.

A congressionally approved expansion of benefits amid the coronavirus pandemic this spring provided the unemployed an additional $600 in weekly unemployment payments, but that expansion expired in July. Democrats pushed to renew the benefits, but Republicans argued they were too high and in fact discouraged people from returning to work.

Disagreement about the benefits was one of a slew of major issues that prevented congressional Democrats and the White House from striking a deal on a new COVID-19 relief package.

After the unemployment boost expired, Trump signed an executive order to retool Federal Emergency Management Agency (FEMA) funds for an additional $300 in weekly benefits. 

States could add a further $100 from their own COVID-19 relief funds, but only three — Kentucky, Montana and West Virginia — opted to do so. South Dakota was the sole state to opt out of the program altogether.

But setting up a new system and requiring states to apply caused most to go at least a month before issuing their first payment. Ten states still haven’t sent out their first payment under the order. 

The limited funding in the FEMA disaster account meant that they would only be able to cover about six weeks overall.

Unemploymentpua.com, a website that follows the minutia of state-level COVID-19 unemployment relief programs, found that 25 states had reached their funding limit, though only seven had already sent out their final payments.

Because state unemployment benefits on average only cover about a third of people’s income, losing the supplemental funds adds to the financial strain on the 26 million people currently receiving benefits.

Talks over a legislative solution appear frozen, as Republicans and Democrats remain $1 trillion apart in their respective asks for a fifth COVID-19 relief package.