Trump wants states to pay a quarter of his new unemployment benefit. States say they can't afford it.

"The concept of saying to states 'you pay 25 percent of the unemployment insurance' is just laughable," New York Gov. Andrew Cuomo, a Democrat, said.
Image: Donald Trump
President Donald Trump signs an executive order during a news conference at the Trump National Golf Club in Bedminster, N.J., on Aug. 8, 2020.Susan Walsh / AP
By Allan Smith and Ezra Kaplan

President Donald Trump is calling on states to provide 25 percent of the expanded unemployment benefit called for in his recently signed executive order.

But in states facing significant budget shortfalls because of the coronavirus pandemic, governors say the idea that they can pitch in for a quarter of the expanded benefits for the foreseeable future is misguided.

"The concept of saying to states, 'you pay 25 percent of the unemployment insurance' is just laughable," Gov. Andrew Cuomo, D-N.Y., said Sunday. "The whole issue here was getting states funding, state and local funding. You can't now say to states who have no funding, and you have to pay 25 percent of the unemployment insurance cost."

Maine Gov. Janet Mills, a Democrat, said Trump's action flies in the face of what states and localities have been pushing for — substantial budget relief.

"Asking states now to take on additional expenses is unresponsive to these needs and threatens important programs and services," she said.

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In signing a series of executive actions Saturday, Trump presented new enhanced unemployment benefits — after an earlier program expired at the end of July — at a rate of $400 per week, reduced from $600. The order required states to bear 25 percent of the cost.

In a memo obtained by NBC News, the Department of Labor is offering a second option that allows states to count existing unemployment benefits as part of their cost share. The federal government would then pitch in $300 in expanded benefits — half of what people were making on unemployment in recent months.

"While we wait for Congress to strike an agreement, the president’s actions, as long as they are found to be valid, can hold us over a little while longer," Conor Cahill, a spokesman for Colorado Gov. Jared Polis, said in a statement. "Colorado will now need to contribute part of the cost of unemployment benefits above and beyond our regular cost, but without new federal aid it is unlikely that Colorado can find the money to keep this up for more than a few weeks."

Elsewhere, California Gov. Gavin Newsom said Monday the redesigned benefits would cost his state, hard hit by coronavirus fiscal woes, about $700 million per week.

While some states have substantial unspent CARES Act relief dollars in their coffers, a recent National Association of State Budget Officers survey found that states and territories already allocated about 75 percent of the funds, which totaled $150 billion and came with conditions.

Shelby Kerns, executive director of NASBO, said "most states will have a difficult time paying a share of the enhanced benefits as state revenues are declining and CARES Act funds are largely allocated to other needs."

"This will force states to choose between commitments to testing, contact tracing, measures to safely reopen schools, economic support programs, other necessary expenditures, and paying enhanced benefits," she said in an email. "At this time state and local governments most need additional federal support to avoid significant cuts to services instead of additional federally-directed expenditures."

A number of states reached by NBC News, including Maine, Michigan, Kansas, Alabama, and Mississippi, said they were awaiting additional administration guidance before determining how to proceed.

"There are far more questions than answers, and there is currently almost no guidance from federal agencies about how it might work," Mike Faulk, a spokesman for Washington Gov. Jay Inslee, said.

The benefits may take a week or longer before they can begin to be sent out, with states needing time to adjust their distribution system or even create a secondary program.

Because the funds are being distributed via the Stafford Act, "that means this is not an extension of the existing program, but is a new program as currently outlined in the president’s memorandum," Penny Ickes, a spokeswoman for the Pennsylvania Department of Labor and Industry, said in a statement. "It would have to be created from scratch and run parallel with Pennsylvania’s existing unemployment benefits programs. This is not something that any state will be able to do quickly."

The president signed the orders as Congress was at a stalemate over new coronavirus aid. Democrats have pushed for about $1 trillion in aid to state and local governments in that package. Trump on Monday told reporters "we can't do that."

State Republicans praised Trump for the executive action as they too determined next steps.

"We are very thankful to President Trump for extending these critical benefits," said Patrick Ptak, a spokesman for Arizona Gov. Doug Ducey. "We will be working diligently to apply these changes in Arizona, and will have more information early this week."

Speaking with CNN's "State of the Union" Sunday, Ohio Gov. Mike DeWine said his state was still determining how to handle the order, suggesting money could be drawn from other sources to pay for the benefits.

"He's trying to do something," DeWine, a Republican, said of Trump. "He's trying to move the ball forward."