Hey what's going on everybody? Today is Wednesday August 12th. Hope you're doing
well. I hope you had a good weekend. I'm gonna be talking about unemployment
insurance today and some of the issues with the executive order that President
Trump signed over the weekend. So just to give you a little background,
President Trump signed an executive order over the weekend
extending $400 per week of added unemployment benefits to unemployed
people. The problem with this executive order is that
$300 of it will be covered by the federal government
and the other $100 will be covered by the state. If there's no additional funding
for the states, you can already see that this is going to put states in
a big bind. How did we get here? As you know, the
CARES Act signed back in March added an additional
$600 per week in unemployment benefits for
unemployed people and that was fully funded by the federal
government. And as you also know, the CARES Act also
expanded unemployment to self-employed people, people who drive for
Uber or Lyft, you know independent contractors, those kinds of people. So you
have more people who qualify for unemployment.
So as you can see here states already have a pretty big burden
just from that alone, just from the additional amount of unemployed people
that can draw on unemployment. So now
comes this executive order, this executive order has no additional
funding for states, it's going to put states
in a heavier burden, states that already are running at a deficit.
So take for example California. California is running at a big
deficit compared to last year and they have over seven million people
on unemployment right now. So this executive order, if they choose to run
with this program, will add an additional $700 million
per week that they have to pay out. Now think
about that $700 million per week. They're already running out of a deficit.
That means that they're going to have to do some major cuts
to a lot of their programs in order to make this even work.
You know they they might not even choose to participate in this particular
program which is unfortunate because a lot of the people really need this
extra money. So that's the thing with this executive
order, like states can choose to not participate
and then there just won't be an additional $400 per week
and you'll still get your state funded unemployment but no
expanded unemployment benefits. The other problem here
is that states will have to reprogram or "retweak"
their unemployment software or their unemployment systems
to adjust for this change. We saw originally in the CARES Act that it took
several weeks for many states to get their systems
upgraded or updated with that $600 per week information in
order to properly pay out to unemployed folks.
And some states are still you know, as of the end of July, we're still having
problems with that extra $600 a week. So now
we have this $400 per week program that's supposed to only last for a few weeks,
and I'll go into that later, but it's only supposed to last for a few
weeks and states have to reprogram their computers.
And then essentially they might have to reprogram their computers again
because of any new laws that may be agreed upon between the Senate and House.
So, so far that's a couple pieces of bad news for folks
that were looking for unemployment extensions.
So why is it this way, like how how does an executive order
differ from a law? Well first of all, an executive order is something that the
President can just sign into the law without having the required votes by the
House and Senate, okay. So what that means is yes
the President can have a certain amount of powers, but they're also still a
little limited. For example, he can't create more funding
for the program. You know the CARES Act they allocated
several , several hundred billion dollars to unemployment benefits or to the
Paycheck Protection Program. They they were able to create that
funding for those programs in order to make those programs work. But
in this case, the President can't just create more
funding or create a budget for this program. So he had to
basically reallocate budget from one program to
another program. So he's taking money from the Department
of Homeland Security's Disaster Relief Fund, which has about
$70 billion in there right now, okay. He's allocating about $44 billion
of it for this program which means that if all the states participate
in this program it will last only four to five weeks
at most, okay. Because we have about 30 million people unemployed,
at $300 per person, that's the federal portion, $300
per person divided into $44 billion that's about 4.8 weeks.
So not a long time, but what this could do is give
Congress more time to at least come to an agreement
for an actual law to be passed. Most likely Congress will agree upon law
or legislation that would be a more permanent solution.
So that would be a good thing and hopefully in the meantime
people will be getting some expanded benefits. Now
people won't be getting expanded benefits if their states choose not
to participate in this program because there'll be such a huge burden on them.
And also people won't be getting benefits if they
are receiving less than $100 per week off their state
unemployment benefits, okay. So that was another thing
in this executive order is that if you don't
make at least $100 per week from your state benefits you don't get
any of this expanded benefits. Whereas the law
passed in the CARES Act, with the $600 additional benefits
even if you were making like $50 or $90 or $80
on your state unemployment you would still get the additional $600
per week no matter what. But in this case, you have to make at least $100
per week which will leave I think between 10% -
15% of unemployed folks out of this program completely.
This program at least gives lawmakers a little more time.
It's not perfect. You know none of these programs will probably be perfect but
it's something right? It's going to give them more time
to at least come to an agreement for unemployment, a more permanent
solution, a more long-term solution. Hopefully with the pressure, with such a
pressure off their backs they'll be able to make better decisions.
But at, you know, again the problem there is if they if
lawmakers come up with another program then states will have to do, will have to
basically retweak and rework their systems to make another
adjustment which could take several weeks. So we're
looking at several, several weeks possibly before
folks even get additional unemployment benefits which
is just too bad because that's you know, that's Congress's fault for
not coming to negotiations sooner than you
know, a couple weeks before the expanded
benefits expired. Now there are other things that Congress
also still need to agree on such as funding for schools or potentially
funding for states. We know that one thing that they for
sure agree on is a second stimulus check okay. $1,200 per
individual, per qualifying individual, and $500 per qualifying
dependent will receive a stimulus check. When, we
just don't know. Congress has been saying oh hopefully
it's this week, hopefully it's this week. They've been doing that for several
weeks now. So at this point, I'm not going to hold my breath.
The only thing I know for sure is that they, both sides, Democrats and
Republicans agree on on having a second stimulus
check. And they agree on the amount of it. The
Senate Republicans did introduce the HEALS Act which is a
conglomerate of bills okay, a conglomerate of different bills
covering different programs. So it's kind of strange to me as to why
the Congress doesn't just agree on the stimulus check portion
while they hash out all these other details. You know like if,
if stimulus check is one bill, unemployment is on another bill,
uh school funding is on a separate bill, I would just you know, agree on the stimulus
check bill and sign that into law so that people
get their funding quicker. That would be beneficial for more people
more quickly, get the money now while they hash out
all these other details. We'll see what goes on there. Thanks for joining me
today. My name is Ryan. If you haven't done so already, please
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important updates regarding the stimulus packages every day.
And please let me know in the comments below what you think about
this executive order. What you think about Congress,
what your experience has been like getting unemployment,
and any other comments or questions that you may have,
and I'll be sure to try to get to them. Alright thanks for joining me.
Take care for now and stay safe.