Edwards: More clarity on unemployment enhancement, but funding poses problems

Even Louisiana workers receiving less than $100 in weekly unemployment pay will be eligible for President Donald Trump's jobless pay enhancement, Gov. John Bel Edwards said.

But the governor talked at his Thursday COVID-19 press conference about tough choices that remain.

The president signed an executive order Saturday calling for a $400 weekly boost in unemployment benefits on top of the conventional jobless pay administered by individual states. The enhancement would replace the $600 weekly boost approved by Congress. That enhancement expired July 31.

Trump's extension not only calls for a smaller enhancement, but it requires states to put up $100 per eligible recipient to be matched by $300 from the federal Disaster Relief Fund. Edward said Louisiana's unemployment insurance trust fund has already shrunk from $1.05 billion March 1 to about $230 million as of Thursday.

The other option offered by the Trump administration is to count the weekly benefit already received by unemployed workers, a maximum of $247, as the state's match. That left 200,000 idled Louisiana workers who receive less than $100 a week in bureaucratic limbo.

But Wednesday night, Edwards said, the administration offered new guidance: If the average state benefit for all unemployed workers is at least $100 -- and it is in Louisiana, the governor said -- all unemployment benefit recipients would be eligible for the $300 federal enhancement. The added benefits would be retroactive to Aug. 1.

Edwards said he heard Treasury Secretary Steven Mnuchin say the administration plans to begin making money for the enhancement available in a couple of weeks. In the meantime, the state government is updating computer software that would make it possible for those receiving less than $100 a week in benefits to receive the enhancement..

Based on recent experience, Edwards said, the Disaster Relief Fund has only enough money for five or six weeks of enhanced pay. That would cost about $44 billion before the fund is reduced to the $25 billion the administration believes should be kept in reserve to deal with hurricanes or other disasters.

"The good news is I think it gives Congress more time to deliver the comprehensive assistance we need at least through the end of this year," Edwards said.

Congressional leaders are negotiating over the size of a benefit enhancement of its own as well as aid to state and local governments, a possible second stimulus payment and other issues.

Louisiana would still have to cope with the erosion of its unemployment trust fund. When the fund is reduced to $100 million, it would be necessary to borrow money to replenish it, Edwards said. And that would mean a surcharge on employers to pay off the loan.

"Nobody thinks, and I certainly don't think, that now is a good time to be adding a surcharge on employers across Louisiana," Edwards said.