|Phoenix — Today Gov. Doug Ducey announced that he signed an agreement with President Donald Trump that will provide a $300 weekly enhanced unemployment benefit to Arizona’s jobless, half the amount previously provided under the CARES Act.The governor’s action follows a memorandum by Trump on Aug. 8 that bypassed Congress in order to extend enhanced unemployment benefits using FEMA funds after the US House of Representatives and the White House could not agree on a relief package in response to the COVID-19 pandemic. The previous weekly federal unemployment supplement was $600.While Trump’s memo encouraged states to use COVID Relief Funds to provide an additional $100 state matching contribution to the unemployed, Ducey has opted not to do so even though the state still has $424 million in unallocated relief funds.
Questions remain as to whether Trump’s action is legal. In addition, the Stafford Disaster Relief and Emergency Assistance Act requires states to provide a 25% match to any federal help, but Ducey appears to have reached an agreement with the president that bypasses that requirement. While circumventing the law is likely illegal, it will go forward unless a court challenge is filed and an injunction ordered as a result.
Apart from legalities, recipients will have to wait weeks if not months to receive this additional help due to the challenges in re-programming the Arizona Department of Economic Security’s computers.
Ducey and state lawmakers have refused to take action to fix Arizona’s unemployment system which was last adjusted in 2004. The previous CARES Act $600 weekly federal unemployment supplement expired on July 25. It was a lifeline for Arizona’s unemployed given the state’s $240 weekly benefit cap, the second lowest in the nation. The Grand Canyon Institute recommends raising Arizona’s benefit cap to half the average weekly wage, which is currently $490 per week.
In addition, the Grand Canyon Institute has estimated that more than 40,000 people with reduced hours have lost all benefits but would still receive them if they lived in a state with a better unemployment insurance system like Utah or Texas.
Ducey’s agreement with Trump will exclude anyone receiving less than $100 per week in unemployment or pandemic unemployment assistance, which is common for people whose hours have been cut. This will further exacerbate the extreme hardship being experienced by Arizona’s underemployed.
On Monday, GCI will release an estimate of the number underemployed Arizonans impacted by this decision.
For further information, contact:
Dave Wells, Ph.D., Research Director