- After much confusion, the Department of Labor finally issued guidelines clarifying how President Trump’s executive action expanding unemployment benefits would be enacted and funded.
- While Trump said that he would provide $400 a week in benefits, his plan only provides $300 in federal funds, and states would be required to cover the other $100.
- Under Trump’s original memo, if a state did not agree to chip in $100, it would not be able to access the additional benefits. After bipartisan backlash, his administration agreed to give states the $300 without requiring the extra payout.
- But even after walking back that decision, there are still concerns as to whether states will opt-into the program because it has many legal and logistical problems.
Trump’s Unemployment Plan
The Department of Labor issued guidelines Wednesday for states to execute the $300 expansion of unemployment benefits President Donald Trump authorized in an executive memo Friday.
The move comes after days of confusion over the implementation and funding levels of the executive action.
In announcing the memo, Trump claimed that the move would give people an additional $400 a week on top of the benefits they receive at the state level. But there was a big catch: the federal government would only pay 75%, or $300, and states have to cover 25% by chipping in $100.
Under the initial plan Trump laid out, even just to get that $300 states would need to enter into a financial agreement with the federal government that says they will give people the $100 from their own funds.
However, many states have already tapped out their unemployment funds because of the millions of Americans who have filed for unemployment throughout the pandemic.
Governors from both parties expressed concern over the idea that states would have to agree to payout more from their already depleted funds to access the federal benefits, and because Trump’s memo allowed states to opt-in to receive the extra $300 but did not require them to do so, many worried that states would opt-out.
In the days following the announcement, the Trump administration seemed to walk back the plan to make it mandatory for states to pay the extra $100 to get the $300 in federal benefits. However, between Trump’s announcement and Tuesday, administration officials also offered five different contradictory versions of how the benefits would work.
The new DOL directive clears that up. Under the new guidelines, the agency says that states can either chip in the $100 or count the first $100 they already pay in state-level benefits.
While that does lower a significant barrier, it also means that unless states chipped in— and many would probably be unable to— their citizens would only get half of the $600 they had been receiving before.
Even without that barrier, there are still concerns that states will not want to opt-in to the extra $300 for a number of reasons.
States cannot legally use their existing unemployment systems to give out benefits that have not been authorized by Congress. As a result, Trump’s memo would require them to create and implement entirely new insurance disbursement programs from scratch to even be able to give out the benefits.
However, some states are struggling so much financially that they might not be able to do it at all, and even for the states that can financially implement new programs, experts have said that it could take weeks or even months for them to set up and implement those systems.
For many, that onerous and expensive process may not be worth it, especially because there are serious concerns about how Trump plans to fund the extra benefits.
In his memo, Trump calls for $44 billion of funding from the Department of Homeland Security’s Disaster Relief Fund— which is normally used for national disasters like hurricanes, tornadoes, and fires— to be shifted to unemployment.
Not only would that be pulling from natural disaster funds in the middle of what is expected to be a major hurricane season, at the current rate of unemployment, experts say that money would run out in about five or six weeks.
Additionally, opting-in to Trump’s program could also pose a risk for states because of two major legal issues with his plan.
First, the emergency fund that Trump is using to bankroll the executive action is one that is set aside by Congress. But Congress, not the president, has the power to allocate federal funds under the Constitution, so there are legal questions as to whether Trump can unilaterally divert that money.
“The basic notion here is the president is rejecting Congress’ power of the purse,” David Super, a constitutional law expert at Georgetown Law told the Washington Post. “That is something nobody who cares about separation of powers can let slide, even if they like what the money is being spent on.”
The second issue, as Super also explained to The Post, is that it is actually illegal for the Trump administration to waive the additional state contributions of $100 as a requisite for receiving the $300.
In fact, the 25% state funding match that was in Trump’s initial plan because it’s required under the law Trump cited to create this benefit program. What’s more, counting the first $100 states already payout in state-level benefits rather than requiring new spending to meet the state-match requirement also violates a federal rule outlined by the Office of Management and Budget.
Unemployment Claims Drop, But Indicators Worry Experts
The questionable legality and other underlying issues with Trump’s plan paired with the inability of Senate Democratic leaders and the White House to negotiate a coronavirus relief bill has left many worried about their livelihoods nearly two weeks after the $600 federal unemployment benefits expired.
On Thursday, the government reported that the number of people who filed for this week fell to under one million for the first time since March, with new unemployment claims clocking in at 963,000, down 228,000 from the week before.
While it is significant that new claims dipped after 20 consecutive weeks of being more than a million, like all good news during the pandemic, there is some nuance here.
First of all, the unemployment numbers that are reported every Thursday are not the full picture. They do not account for people who have exited the workforce entirely or independent contractors and self-employed workers who are not eligible for unemployment and are currently receiving benefits under a separate federal program.
This week, another 489,000 people applied for that program, and when those people are including the count, there are still over 1.4 million people who filed to receive some kind of unemployment benefits this week.
On top of that, while the 963,000 number on its own is the lowest count since the economic closures started, it is still incredibly high by historic measures. According to reports, before the pandemic, the previous worst week on record was in 1982 when 695,000 people filed for unemployment.
Additionally, while unemployment has been trending down in general, many of the claims filed earlier on in the pandemic were due to temporary layoffs and furloughs. Now, however, experts say that most of the new job losses that are being reported now are likely going to be permanent.
Last week, the DOL reported that employers brought back 1.8 million jobs in July, which is way down from the 4.8 million they brought back in June. With multiple enhanced benefits and protections provided under the CARES Act already expired, economists warn that the slowdown will continue through August.
See what others are saying: (Business Insider) (Forbes) (The New York Times)
Donald Trump and Eldest Three Children Hit With Fraud Lawsuit From New York AG
AG Letitia James says that the former president “falsely inflated his net worth by billions of dollars to unjustly enrich himself.”
Lawsuit Filed Against Trump
New York Attorney General Letitia James announced on Wednesday that she filed a civil lawsuit against former president Donald Trump and his three eldest children over allegations that they fraudulently inflated asset valuations within the Trump Organization.
Donald Trump Jr., Eric Trump, and Ivanka Trump are all listed alongside their father in the lawsuit. Executives Jeffrey McConney and Allen Weisselberg, the latter of whom recently pled guilty to tax crimes, are also listed alongside other Trump businesses.
“Donald Trump, with the help of his children…and senior executives at the Trump Organization, falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits, among other things,” a press release announcing the lawsuit claimed.
The Attorney General’s office claims that between 2011 and 2021, Trump and the Trump Organization made 200 false and misleading claims about asset values on annual financial statements.
The lawsuit was filed Wednesday in a State Supreme Court in Manhattan.
“The complaint demonstrates that Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and to cheat the system, thereby cheating all of us,” James said while announcing the complaint.
Her office is seeking to permanently ban Trump and his children from serving as an officer or director in any New York corporation and to bar Trump and his organization from entering into any New York real estate acquisitions for five years. The office is also seeking to recover $250 million in penalty payments, among other forms of relief.
The Office of the Attorney General has also referred the matter to the federal attorneys in New York and to the IRS for criminal investigation.
“There aren’t two sets of laws for people in this nation: former presidents must be held to the same standards as everyday Americans,” James added in a statement on social media.
“Trump’s crimes are not victimless,” she continued. “When the well-connected and powerful break the law to get more money than they are entitled to, it reduces resources available to working people, small businesses, and taxpayers.”
Trump Allegedly Inflated Key Assets
According to James’ release, Trump “made known through Mr. Weisselberg that he wanted his net worth on his statements to increase every year.”
“And the statements were the vehicle by which his net worth was fraudulently inflated by billions of dollars year after year,” the release continued.
Among the assets Trump and his organization allegedly inflated was the Trump Tower Triplex, an apartment Trump allegedly claimed was 30,000 square feet when it is just around 11,000 square feet. Because of its ballooned size, the property was valued at $327 million in 2015, roughly three times as much as the sole apartment in New York City to ever sell for over $100 million at the time.
For further comparison, the highest sale for a listing in Trump Tower at the time was only $16 million.
Trump also allegedly claimed Mar-a-Lago was valued as high as $739 million based on the “false premise” that the property could be developed and sold for residential use. The lawsuit claims that Trump actually signed deeds donating those rights, limiting the property’s use to a social club. James and her office claim its value would fall closer to $75 million.
Inflated Clauations Cannot Be “Excused”
“The inflated asset valuations in the Statements cannot be brushed aside or excused as merely the result of exaggeration or good faith estimation about which reasonable real estate professionals may differ,” the lawsuit states, adding that instead, they are the result of improper methodology intentionally meant to falsely boost Trump’s net worth.
The investigation into Trump’s alleged fraud began nearly three years ago, and the former president has repeatedly called it a politically motivated witch hunt. His attorney, Alina Habba, doubled down on that rhetoric in a statement Wednesday.
“Today’s filing is neither focused on the facts nor the law – rather, it is solely focused on advancing the Attorney General’s political agenda,” Habba said. “We are confident that our judicial system will not stand for this unchecked abuse of authority, and we look forward to defending our client against each and every one of the Attorney General’s meritless claims.”
For his part, Trump has blasted the lawsuit on Truth Social, calling James a “fraud” and a “crime-fighting disaster.”
Trump previously tried to impede the probe but was ultimately ordered by a judge to sit for a deposition and turn over subpoenaed documents. Reports say he pled the fifth hundreds of times during his deposition.
See what others are saying: (Bloomberg) (The Washington Post) (Reuters)
Hurricane Fiona Causes “Catastrophic” Damage in Puerto Rico, Leaving Many Without Power
While power has been restored to some, more than a million remain without it as continued rainfall, flooding, and landslides are expected to cause further damage across the island.
Hurricane Fiona Wreaks Havoc
Hurricane Fiona made landfall in Puerto Rico Sunday, bringing heavy rains, flooding, and landslides, while also knocking out power for the entire island and killing at least one person.
Photos and videos posted on social media show floodwaters consuming major streets and engulfing cars. Some pictures show an entire bridge flooded, making it impassible. Other footage shows a different bridge entirely uprooted and a metal barrier ripped away from the road and floating down a river of floodwater.
Officials have said conditions are still too dangerous to fully evaluate the extent of the crisis. In remarks to the public, Puerto Rico’s governor, Pedro Pierluisi, described the damage as “catastrophic.”
He asserted that the storm has been one of the most significant since Hurricane Maria — which hit the island almost exactly 5 years ago to the day — killing more than 3,000 people, leaving many without power for months, and causing destruction that the island is still recovering from.
Pierluisi noted that Puerto Rico has received over 30 inches of rain and that some areas have even gotten more rain than during Hurricane Maria. As of Monday afternoon, the National Gaurd has led 30 rescue operations so far, saving more than 1,000 stranded residents in 25 municipalities, according to the governor.
Pierluisi also added that more than 2,000 people were in the island’s 128 shelters, with officials further saying there is plenty of shelter space for those who need it. On Sunday, President Joe Biden approved an emergency declaration for Puerto Rico, which will allow federal agencies to coordinate disaster relief.
Continued Issues As Storm Rages On
Meanwhile, Puerto Rico’s water authority has confirmed that just over 70% of the island is still without water. According to poweroutage.us, more than 1.3 million customers were still without power as of Monday morning.
The power company LUMA also stated that electricity had been restored to around 100,000 customers over the course of Sunday night, though it previously warned that the full restoration of power could take several days as the storm has created “incredibly challenging” conditions.
While Hurricane Fiona has passed through Puerto Rico, having now made landfall in the Dominican Republic, officials and experts say that heavy rains and further flooding are still to be expected for the next few days.
The National Weather Service has warned that “life-threatening and catastrophic flooding” as well as mudslides and landslides are expected to continue across the island. As a result, Pierluisi has urged Puerto Ricans Monday to remain home and in shelters so that officials can continue to respond to others in need.
He also noted that the areas most impacted by the hurricane include the southern part of the island, the southwest, and the mountains.
After moving through the Dominican Republic, Hurricane Fiona is expected to head towards Turks and Caicos Tuesday. The National Hurricane Center has said that the storm will continue to grow and by Wednesday, it is set to become a major hurricane — which means a Category 3 or higher.
See what others are saying: (The New York Times) (The Washington Post) (CNN)
Government Aid Cut Child Poverty in Half During Pandemic, Data Shows
The reduction occurred similarly across geography, race, family type, and citizenship status.
Largest Drop in Half a Century
The United States’s child poverty rate sank to the lowest level on record last year, primarily thanks to pandemic relief measures and other government programs, according to an analysis of census data released Tuesday.
The Center on Budget and Policy Priorities analyzed data from the Census Bureau’s supplementary poverty measure, which accounts for safety net programs and tax credits as well as regional differences in the cost of living.
From around 11% in 2019, the percentage of kids living below the poverty line fell to 9.7% in 2020 and 5.2% the year after that.
In just two years, nearly 5.5 million kids were lifted from poverty, marking an almost 60% drop in the child poverty rate.
The Center’s researchers gave most credit to the federal government’s numerous interventions in the economy, from stimulus payments and the expanded child tax credit to eviction moratoriums and expanded unemployment insurance.
Without government intervention, poverty in 2020 would have experienced its second-largest recorded increase, the Center claimed, but instead, it underwent the largest single-year decline in over half a century.
Especially impactful was the expanded child tax credit, which sent up to $300 per child to households with children every month between July and December 2021.
According to the analysis, this policy alone pulled nearly three million kids out of poverty.
But the tax credit’s expansion expired at the end of the year despite Democrats’ efforts to prolong it with Biden’s signature Build Back Better bill, which was blocked by Sen. Joe Manchin (D-WV), who reportedly told colleagues he was concerned that families might use the payments to buy drugs.
Poverty Before COVID
Child poverty has fallen by 59% since 1993, when it sat at around 28%, according to another analysis published Sunday by The New York Times and the nonpartisan group Child Trends.
They found that the decline occurred across all 50 states and D.C., as well as in different levels of poverty.
It similarly affected nearly all subgroups of children, — white, Black, Asian and Hispanic, single-parent and two-parent, immigrant and non-immigrant.
The causes driving the pre-pandemic decline included general economic improvement — low unemployment, a higher labor force participation rate among single mothers, and growing state minimum wages — but the researchers pinned government welfare programs as the dominant factor.
They specifically mentioned the earned income tax credit, social security, unemployment insurance, and nutrition and housing assistance.
Despite the positive trend, more than eight million children still live below the poverty line, and that number excludes those who live just above it but still struggle to meet basic needs.
The current poverty line sits around $29,000 for a family of four in a location with typical living costs.
Moreover, disparities still persist, with Black and Latino children about three times as likely as their white peers to be poor.