SACRAMENTO — Along with added stress for struggling businesses and a failing unemployment agency, California Governor Gavin Newsom estimated Monday it would cost the state $700 million per week to implement President Donald Trump’s proposed unemployment plan.
Newsom said Trump’s offer, which would require states to pick up 25% of the cost, would cause further delays at the state’s beleaguered unemployment department and force harsh new cuts in a state saddled with a record $54 billion deficit.
“There is no money sitting in the piggy bank,” Newsom told reporters. “It would create a burden the likes which even a state as large as California can never absorb.”
After negotiations for a new round of coronavirus relief broke down in Congress, Trump issued a host of executive actions over the weekend including one that would provide millions of unemployed workers with an extra $400 per week. Trump called the order “generous” and said the federal government’s share would be pulled from an $8 billion pool of unspent funds leftover from the last round of relief negotiations.
“This is the money they need, this is the money they want, this gives them a great incentive to go back to work,” Trump said.
But along with questions about the legality of Trump’s various orders, critics are warning it places an undue burden on states that have gone broke due to the pandemic.
New York Governor Andrew Cuomo called the offer “laughable” and said it would be impossible for the Empire State to implement.
Newsom echoed Cuomo’s concerns on Monday during a press conference, saying Trump’s bridge deal falls short of governors’ requests for aid and bemoaned Congress’ failure to pass the $3 trillion Heroes Act. He claimed California has already spent its stake of the first federal relief and warned contributing $100 per week, per person would cost the state billions and trickle down in the form of budget cuts and potentially added responsibility for employers.
Hit with a record number of claims, California’s Employment Development Department has left scores of unemployed in the dark since March.
Residents have been unable to reach claims handlers on the phone due to understaffing and some have been without a source of income for months. Lawmakers have bashed the agency and called on Newsom to scrap its management team.
While he has deployed a “strike team” to address the department’s failures, Newsom acknowledged Monday executing Trump’s unemployment boost could cause California workers awaiting relief new delays.
“The reality is, reprogramming that system from $600 down to $400…would create time delays and more consternation for millions of those that would seek those benefits,” Newsom said.
— By Nick Cahill and Nathan Solis, CNS