California eyes state extension of the extra unemployment benefits as Congress dithers

Denitsa Tsekova
·Reporter

California is planning to step in to help their jobless residents remain whole if Congress doesn’t extend the extra coronavirus unemployment benefits that expire Friday.

On Monday, the state announced a $100 billion stimulus plan with a provision that fills the gaps in unemployment insurance “if the federal government does not extend the $600 per week payment,” according to the proposal outline.

Read more: Do you have to pay taxes on unemployment benefits?

“Millions of Californians are suffering in this economic downturn, and Republicans in Washington, D.C., don’t seem to care,” Assembly Speaker Anthony Rendon, a Democrat, said in a statement. “I look forward to further development of today’s proposals and others in the weeks and months ahead.” 

Maria Mora came to find information about her claim but found the California State Employment Development Department was closed due to coronavirus concerns on Thursday, May 14, 2020 in Canoga Park, CA. (Brian van der Brug / Los Angeles Times via Getty Images)
Maria Mora came to find information about her claim but found the California State Employment Development Department was closed due to coronavirus concerns on Thursday, May 14, 2020 in Canoga Park, CA. (Brian van der Brug / Los Angeles Times via Getty Images)

The funding will be raised through issuing future tax vouchers and securitization of existing revenue streams, according to the proposal. California lawmakers will share the proposal with Gov. Gavin Newsom and his task force.

“States can do that because they are the ones who run the unemployment insurance system,” Gbenga Ajilore, a senior economist at the Center for American Progress, a non-profit for public policy research and advocacy, told Yahoo Money. “States are at liberty to provide extra benefits through many different types of programs.”

‘The administration has wildly different priorities’

In the meantime, Congress is debating the GOP’s new stimulus proposal, but it may take weeks until a deal between the two parties is reached, according to Senate Majority Leader Mitch McConnell.

On Wednesday, Mark Meadows, the White House chief of staff, told Politico’s Jake Sherman that “we’re nowhere close to a deal...it means enhanced unemployment insurance will expire.”

Even if the GOP plan goes through, the extra benefits would be reduced. The Republican proposal released Monday calls for cutting the extra unemployment benefits to $200 a week through September and then ultimately transitioning to having the benefits replace only 70% of wages.

Read more: What to do before you lose your job

In the case of cutting the benefits from $600 to $200, California lawmakers propose filling in that gap. The proposal also suggests extending the unemployment benefits to undocumented immigrants, according to the outline.

“You just have to look at the administration versus the state priorities and you see certain states are very proactive about helping out their residents,” Ajilore said. “The administration has wildly different priorities, so some states feel the need to make up that difference.”

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This comes after some states — including California, Ohio, New Jersey, and others — extended their regular benefits to cover more weeks versus other states. Additionally, some states have used the work-share program that keeps employees on the payroll, another strategy that helps jobless workers more.

“There hasn't really been a national strategy in terms of tackling this pandemic,” Ajilore said, “so a lot of states feel the need to go on their own.”

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.

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