The recent move by Republican governors and state legislators to end pandemic-era federal unemployment programs earlier than their Sept. 6 expiration date will cost local economies more than $12 billion, a new report from Congress's Joint Economic Committee found.
So far, 25 GOP-led states have said they will end federal unemployment insurance (UI) programs as early as June 12, including the Federal Pandemic Unemployment Compensation (FPUC) program, the Pandemic Unemployment Assistance (PUA) program and the Pandemic Emergency Unemployment Compensation (PEUC).
Most of those states are ending all three programs, while a handful are only ending the FPUC program, which provides the unemployed with an extra $300 per week on top of their state benefit. You can see a break down of the new timelines here.
Ending the FPUC program early alone will take over $755 million from those receiving UI, according to the JEC report. The report also estimates that every $1 in UI generates $1.61 in local spending. Without the $755 million in FPUC benefits, states stand to lose $12 billion from June 19 through September 5.
"By ending these programs early, states are refusing billions of already appropriated federal dollars that could be spent in local groceries, restaurants and retail shops," the report reads.
Because the report does not take into account the early cancellation of the PUA and PEUC programs, that $755 million figure is likely an underestimate of the effects of early cancellation. The report was also prepared before Maryland announced Tuesday that it too would end the programs.
Republicans claim that the federal benefits are keeping people from returning to work. Economists believe the federal aid may play a small role in some businesses not being able to fill open slots, but that there are other larger factors at play, including child-care issues and workers still not feeling safe.
Sign up now: Get smarter about your money and career with our weekly newsletter
Don't miss: Millions of Americans in 24 states are set to lose unemployment benefits as early as June 12
Source: Read Full Article