2 States Say They Are Running Out of Unemployment; More Could Follow

Arizona and Hawaii are two states already reporting that they expect the federal unemployment supplements created by President Donald Trump’s Lost Wages Assistance program and funded by FEMA to run out soon.

The news comes as House Speaker Nancy Pelosi, White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin have failed to reach a deal on a new package including stimulus checks.

States must reapply after the initial guaranteed three weeks of supplemental payments from the Federal Emergency Management Agency, according to KTNV Las Vegas. “Additional disbursements will be made on a weekly basis in order to ensure that funding remains available for the states who apply for the grant assistance,” according to a guide on the program.

Residents of Arizona & Hawaii Could See Their Unemployment Benefits Drop Significantly

According to Arizona Central, the more than 400,000 residents who have been part of the Lost Wages Assistance program could see their supplements abruptly stop. Michael Wisehart, the director of Arizona’s Department of Economic Security, said, “Unfortunately, we are going to have very little notice when this happens. And so it is likely that the ($300) benefit will stop abruptly for individuals.”

Arizona Central reported that the state “will need to borrow money from the U.S. Labor Department in about two months to keep paying unemployment.” If they cannot get access to more funds and the additional federal funds expire, Wisehart said that those on unemployment would only receive a maximum of $240 a week.

Hawaii’s Honolulu Star-Advertiser reported a similar issue, writing that the “new $300 weekly bonus … may already be exhausted because state officials aren’t sure if they can obtain such funds beyond four weeks.” According to the director of the state’s Department of Labor and Industrial Relations, Anna Perriera-Eustaquio, when the state’s application was accepted, it was only accepted for four weeks.

In fact, the department has yet to provide any payments because it has to create an entirely new system to receive money from FEMA and process claims, the Star-Advertiser reported.

Only 3 Weeks Were Guaranteed Under the LWA Program

In Trump’s August 8 memo about LWA, he announced that FEMA, which typically assists states in moments of crisis associated with natural disasters, would administer the payments for a guaranteed three weeks; the program was then set to end either (a) December 27, 2020, (b) whenever FEMA’s Disaster Relief Fund (DRF) drops to $25 billion or (c) whenever Congress passes another stimulus bill.

South Carolina’s Department of Employment sent a letter to the state’s governor warning him that they believe LWA “would reduce the DRF to $25 billion well before December 27, 2020.”

Susan Dickinson, director of the Pennsylvania Office of Unemployment Compensation, also agreed that the funds will likely run out before the end of the year. She told the Philadelphia Inquirer, “The FEMA money is limited even though it has been authorized through the end of the year. There is a chance it won’t take us through the end of the year.”

Vermont Governor Phil Scott told reporters at a press conference that he realizes the temporary nature of the program. “There’s not a big pot of money there, so that will run out in about three to four weeks without further action by Congress and the president and so forth, so we’re following the same timeline,” he said, according to VTDigger.

In a press release on the program, Scott said, “We continue to urge Congress and the White House to work together on a longer-term solution for these displaced workers.”

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