Thirteen states have allowed unemployment benefits to fall below the $ 245 a week poverty rate of $ 12,760 a year, according to a study by the Government Accountability Office (GAO) published Monday.
The change has occurred since the end of July, when a federal program providing additional benefits of $ 600 per week expired.
The CARES Act, passed into law in March, required a weekly payment of $ 600 for all recipients of unemployment benefits. The amount attempted to bridge the gap between average weekly salaries of $ 333 per week and median income.
Congress sought to reach an agreement that would include renewed benefits as part of COVID-19’s new aid, but was unable to do so.
The $ 600 weekly benefits were one of the sticking points. Republicans argued that the comprehensive increase created distorted incentives for workers, two-thirds of whom earned more with unemployment than at work. Studies have shown that benefits have had little effect on the overall labor market due to extremely high unemployment.
In September, President TrumpDonald John TrumpTrump rages against ’60 minutes’ for interview with Krebs Cornyn spox: Neera Tanden has’ no chance ‘to confirm as Biden’s OMB-elect Pa legislator was informed of the positive coronavirus test while meeting Trump: MORE REPORT instructed the Federal Emergency Management Agency to provide an additional $ 300 per week supplement for up to six weeks.
“These additional benefits have been discontinued,” GAO noted.
In 13 states falling below the poverty line, in addition to regular unemployment benefits, the special CARES program for those working in the GIG economy and the self-employed, the Pandemic Unemployment Assistance (PUA), was even worse. These benefits were below the poverty line in 29 of 41 states, according to GAO.
The PUA and a number of other CARES Act programs, including the one extending the deadline for claiming unemployment benefits, will expire on December 31 unless Congress renews them. The prospects for the fifth COVID-19 aid project before the new year remain slim, although some important program extensions may be included in the year-end government funding law.
Together, high unemployment and a lack of federal funding have placed an increased financial burden on states.
The GAO report found that federal loans to 20 states and the U.S. Virgin Islands totaled about $ 40.2 billion.
This amount is the same among the 20 states that a larger group of states owed after the financial crisis of the last 2000s.
“This total credit balance is roughly equal to about $ 40.2 billion held by 30 states and territories at the end of 2010, which is a high level of borrowing after 18 months of the 2007-2009 recession and early recovery,” the report said.