- Unemployment in the U.S. has dropped to 5.4%.
- “We still have more work to do, but the trend is clear,” Yellen and Walsh wrote.
- Yellen and Walsh said it “may make sense” to keep additional benefits where unemployment remains high.
WASHINGTON — President Joe Biden’s administration won’t seek to reinstate enhanced weekly $300 unemployment benefits set to expire on Sept. 6 and is instead urging states that want to continue the extra payments to use their share of COVID-19 rescue funds.
“The temporary $300 boost in benefits will expire on September 6th, as planned,” Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh co-wrote in a letter to lawmakers Thursday. “As President Biden has said, the boost was always intended to be temporary and it is appropriate for that benefit boost to expire.”
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The enhanced benefits, designed to help Americans who lost jobs because of the pandemic, were enacted in the federal CARES Act under former President Donald Trump last year. The boost, originally $600 but later cut in half, was extended twice, most recently to Sept. 6 under Biden’s American Rescue Plan that Congress passed in March.
Unemployment in the U.S. has dropped to 5.4%. Several states with Republican governors have already opted out of the benefits, slamming the extra money as a financial disincentive for the unemployed to get back to work.
Other enhanced benefits during the pandemic – the extended length of benefits and coverage of individuals who wouldn’t typically qualify – will also expire Sept. 6.
More:These 9 states will end participation in unemployment assistance programs. Their reasons vary.
Some moderate Senate Democrats had indicated they wouldn’t support extending the benefits past September. Biden’s decision not to seek congressional approval to do so was outlined in a letter to Sen. Ron Wyden, D-Ore., chairman of the Senate Finance Committee, and Rep. Richard Neal, D-Mass., chairman of the House Ways and Means Committee.
“We still have more work to do, but the trend is clear,” Yellen and Walsh wrote. “Our nation is getting back to work.”
States can use rescue funds to extend unemployment benefits
Still, even as the U.S. economy recovers, Yellen and Walsh said it “may make sense” for unemployed workers to continue receiving additional benefits in states where unemployment remains high. They said the rise in the COVID-19 delta variant “may also pose short-term challenges to local economies and labor markets.”
For states that want to keep extra benefits going, the administration is emphasizing that states can use their portions of $350 billion in direct aid from the American Rescue Plan.
“Where a more gradual wind down of income support for unemployed workers makes sense based on local economic conditions, American Rescue Plan funds can be activated to cover the cost of providing assistance to unemployed workers beyond September 6th,” Yellen and Walsh said.
More:Economy adds 943,000 jobs in July despite COVID surge, worker shortages as unemployment falls to 5.4%
Letting the expanded benefits end stands in contrast to the Biden’s administration’s move this month to issue a new federal moratorium on evictions for renters unable to make payments in areas hardest hit by COVID-19. The freeze expires Oct. 3 after a previous moratorium ended Aug. 1.
The administration said the Labor Department will be ready to assist states that want to use existing unemployment insurance infrastructure for enhanced benefits that are funded by rescue funds. The Treasury Department also announced an additional $47 million in new CAREER grants to help Americans find a path back to employment.
Biden is also calling on Congress to take up “long-term UI reform” as part of Congress’ consideration of a $3.5 trillion budget reconciliation plan in the coming weeks, according to Yellen and Walsh.
“Beyond the immediate issue of expiring benefits,” they said, “President Biden believes that the pandemic has exposed serious problems in our UI system that require immediate reform.”
More:Panicked cities pressed Biden on rescue funds during the pandemic. Months later, some are slow to spend.
Reach Joey Garrison on Twitter @joeygarrison.