Trump’s unemployment benefit plan won’t work in California, Newsom says

SACRAMENTO —  With millions of Californians jobless during the COVID-19 pandemic, Gov. Gavin Newsom said Monday that the state would face “massive” budget cuts if it carried out President Trump’s plan to have states provide $100 of a $400 supplemental weekly unemployment benefit.

Newsom and legislative leaders called on federal officials to overcome a stalemate involving Congress and the president to provide additional funding for states now that a $600 weekly unemployment payment from the federal government has expired. He noted that the plan would cost the state at least $700 million per week and up to $2.8 billion if the Coronavirus Aid, Relief and Economic Security Act funding is depleted.

“The state does not have an identified resource of $700 million per week that we haven’t already obliged,” Newsom said. “There is no money sitting in the piggy bank.”

Newsom’s comments followed Trump’s announcement Saturday that he signed an executive order to provide $400 a week to unemployed Americans as long as states pick up a quarter of the cost.

“The states have the money,” Trump told reporters Saturday. “It’s sitting there.”

Trump proposed that states use their portion of the CARES Act fund, but Newsom said 75% of its share has been spent and the rest has been allocated.

Coming up with $700 million to $2.8 billion “would create a burden the likes of which even a state as large as California can never absorb without massive cuts to important services or further burdening businesses and individuals,” Newsom said.

In addition, reprogramming the state unemployment agency’s antiquated technology system to process weekly $400 claims shared by the federal government and state “would create time delays and would create enormous consternation for those who receive those benefits,” Newsom warned.

The governor said he is disappointed that a congressional proposal to continue the $600 benefit has not been agreed to by Republicans, including Trump.

“We have been waiting for Congress, we have been waiting for the president to respond to that,” Newsom said. “Unfortunately, there was a disconnect, and as a consequence, that program no longer exists and there has been no bridge.”

Some Democrats have questioned Trump’s legal authority to extend unemployment benefits through executive order without congressional approval.

Trump’s plan was also criticized Monday by state Assembly Speaker Anthony Rendon (D-Lakewood).

“The president’s executive action is unreasonable and impractical,” Rendon said in a statement. “We need meaningful, comprehensive legislation from Congress to support Californians. They’re struggling now — they can’t wait any longer.”

Pressure for federal action also came from state Senate President Pro Tem Toni Atkins (D-San Diego), who oversaw the recent passage of a state budget that put off cuts in hopes that additional federal money would arrive.

“We have said all along that California must have financial support from the federal government to address the needs created by this pandemic,” Atkins said. “We need Congress and the [Trump] administration to collaborate and deliver meaningful COVID-19 relief as soon as possible for the sake of California’s families.”

The governor said he is in talks with state legislative leaders on alternatives to continue helping Californians who lost jobs after Newsom’s March stay-at-home order to reduce the spread of the coronavirus.

Democratic lawmakers said last month that they were prepared to make sure Californians continue to get the $600 weekly supplement that expired at the end of July, and could borrow the money from a federal trust fund if necessary.

If Trump’s order only provides $300 a week, California would have to come up with the same amount to maintain the $600 supplemental payment.

Assemblyman Phil Ting (D-San Francisco), chairman of the Assembly Budget Committee, said Monday that legislative leaders are working to find a solution.

“Supplemental unemployment benefits have worked in the short term to help many families keep a roof over their heads and put food on the table,” Ting said. “That stability is now at risk. If federal payments fall short of $600 per week, California must do all it can to make up the difference, as long as the jobless rate remains high.”

Ting is a leader of a legislative working group that proposed the state consider borrowing money from a federal trust fund to extend supplemental unemployment benefits. The state has borrowed from that fund to help pay benefits to the more than 9 million Californians who have applied for unemployment.

Traditionally, the federal loans are paid back by increasing payroll taxes paid by employers.

“We’re discussing with the governor’s office on how to move forward on this aid, including ways to fund it without putting additional burdens on small businesses,” Ting said.

Newsom also said Monday that he and legislative leaders are in discussions about additional renter protections against evictions, given that a moratorium is set to expire this month.