Major cuts to California’s budget would be required if the state puts President Donald Trump’s new unemployment plan into place, according to Gov. Gavin Newsom.
It “would create a burden the likes which even a state as large as California could never absorb without, again, massive cuts to important services, or further burdening ... businesses and individuals,” Newsom, a Democrat, told reporters during a Monday virtual press conference.
Trump, a Republican, signed an executive order over the weekend that enhances the unemployment payment by $400 a week. The increase will be funded in a 75-25 split between the federal government and states, according to a White House memo.
California’s 25 percent responsibility would be $700 million a week, state officials said. They could draw from a fund that currently has $70 billion, but if the fund drops to $25 billion or less, the federal government support disappears.
“If the state of California was to absorb those costs, you’re looking at $2.8 billion every week of state resources that we would have to find, programs we'd otherwise have to cut, or revenue we would have to generate, to make up for that gap,” Newsom said.
“We’re going to need the federal government to provide the support on that 25 percent, or we are at peril of being in a position where we are making false commitments, false promises to millions of Californians, that ultimately we simply cannot meet,” he added later.
“We have a system where we can do 100 percent or we can do 75 percent, they pay 25, and it will depend on the state, and they will make an application. We will look at it, and we’ll make a decision,” he said.
Other governors have also spoken out about the executive action.
New York Gov. Andrew Cuomo, a Democrat, told reporters in a joint press conference with Kentucky Gov. Andy Beshear on Monday that it would cost the state $4 billion between now and December to pay the 25 percent responsibility for the unemployment payment enhancement.
“We started with a 30-billion-dollar hole and your solution is to cost me another 4 billion dollars? Thank you. That’s handing the drowning man an anchor. ‘Hold onto this maybe it’ll help,'” Cuomo said.
Beshear, another Democrat, claimed that “virtually no state” can afford to pay for the proposed cost-share.
“I think it’s really important that we see ultimately a Congressional solution, and I'd like to see it at the $600 level but if it’s at $400 it needs to be fully federally-funded with administrative cost attached to it,” he said.
The CARES Act included a federally-funded $600 enhancement to unemployment but those benefits expired in late July.
White House counselor Kellyanne Conway told reporters on Tuesday morning that Trump’s orders were signed because of the absence of congressional action.
“He knows you’re looking at needing a couple extra hundred bucks on top of whatever they’re receiving through unemployment or the other government assistance, or maybe even part-times jobs, and saying 400 extra dollars, you can meet some of those expenses, whether they’re food, medicines, whatever your family or household needs,” she said.
President Donald Trump at a White House press conference Monday said officials want states to participate in what he described as a cost-sharing unemployment plan.
“We'd like to get the Democrats to focus on other than what they’re focusing on, which is a bailout of poorly running states,” he said.
Appearing on “Fox News Sunday,” House Speaker Nancy Pelosi (D-Calif.) said Trump’s orders “don’t give the money in enhanced benefits, but puts a complicated formula there which will take a while, if at all, to accomplish to put money in the pockets of the American people.”
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