The Unemployment Cuts Have Begun


Share  Tweet

Alaska, Mississippi, Missouri, and Iowa cut unemployment benefits for their residents over the weekend. They are the first four states to do so. Another 21 states are scheduled to do so over the next month.

All four states cut the $300 per week Pandemic Unemployment Compensation (PUC) supplement that the American Rescue Plan Act (ARPA) extended through September 6. This cut is the equivalent of an annualized income reduction of $15,600 for unemployed people.

The PUC statutory text enabled governors to make this cut with 30 days of notice, which these states provided in early May. All 25 Republican-controlled states have now given notice that that they will cut these benefits on or before July 10, dealing a devastating blow to Biden’s most significant legislative accomplishment so far and significantly undermining the touted anti-poverty benefits of that legislation.

Three of the four states — Mississippi, Missouri, and Iowa — have also said that they are ending their participation in the Pandemic Emergency Unemployment Compensation (PEUC) and Pandemic Unemployment Assistance (PUA) programs. Together, these two programs extended the duration of unemployment benefits and expanded their reach to self-employed and gig workers who are not usually eligible for unemployment benefits.

As I discussed last week, cuts to the PUA program are not allowed by the legislation that enacted the program. The PUC and PEUC programs allow states to quit the programs with 30 days of notice. The PUA program does not allow that and instead uses language that requires the Department of Labor to get the benefits to all eligible individuals.

The cutting of these PUA programs thus represents a violation of the law, not just by MS, MO and IA, but also by Biden’s DOL. Biden’s DOL must ensure that these benefits continue to flow, either by suing the offending states or working around them by working with PUA-friendly states to administer the benefits for the residents of the non-cooperative states. Failure to do so amounts to a decision by the Biden administration to illegally cut unemployment benefits for millions of people across the country.