- 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)
Lawmakers Call For Action as Oil Companies Post Record Profits Amid Rising Gas Prices
A recent analysis from the Center for American Progress found that the top five oil companies earned over 300% more in profits during the first quarter of 2022 than the same period last year.
As Consumer Prices Climb, Big Oil Profits
American oil companies are facing increased scrutiny over profiteering practices as gas prices continue to surpass record highs driven by Russia’s ongoing war in Ukraine.
Last week, costs surged to above $4 per gallon in all 50 states for the first time ever, according to the auto club AAA. Prices are currently averaging over $4.59 per gallon nationwide, which is 50% higher than they were this time last year.
In addition to consumers hurting at the pump, there are also rising concerns for industries that rely on fuel and oil like trucking, freight, airlines, and plastic manufacturers.
To account for high prices, some in sectors have responded by ramping up prices further down the supply chain to account for costs, putting even more of a burden on consumers to pay for everyday items.
But as Americans struggle with sky-high gas prices at a time of record inflation, recently released earnings reports show that many of the world’s largest oil companies thrived in the first quarter of 2022.
ExxonMobil more than doubled its earnings from the same period last year, reporting a net profit of $5.5 billion. Meanwhile, Chevron logged its best quarterly earnings in almost a decade, and Shell had its highest earnings ever.
According to a new analysis conducted by the Center for American Progress, the top five oil companies — including the three mentioned above — earned over 300% more in profits this quarter than during the same time last year.
“In fact, these five companies’ first-quarter profits alone are equivalent to almost 28 percent of what Americans spent to fill up their gas tanks in the same time period,” the report noted.
Per Insider, for at least four of those companies, that growth marks a tremendous increase in profits from even before the pandemic.
Lawmakers Ramp-Up Efforts to Reduce Prices
To address these startling disparities, federal lawmakers have moved in recent weeks to increase pressure on oil companies and take steps to lower prices.
On Thursday, the House of Representatives passed a bill proposed by Rep. Katie Porter (D-Ca.) that aims to reduce gas prices. The legislation, called The Consumer Fuel Price Gouging Prevention Act, would give the president the authority to issue an Energy Emergency Declaration that would be effective for up to 30 days with the possibility of being renewed.
In that emergency period, it would be illegal for anyone to increase gas or home energy fuel prices to a level that is exploitative or “unconscionably excessive.”
The proposal would also give the Federal Trade Commission the power to investigate and manage instances of price gouging from larger companies and give state authorities the ability to enforce price-gouging violations in civil courts.
The bill, which has already seen widespread opposition from Republicans and extensive lobbying from pro-oil interest groups, faces an uphill battle in the 50-50 split Senate.
During debate on the act Thursday, Rep. Porter delivered an impassioned speech accusing oil companies of driving their record profits by using their market power to unfairly increase prices.
“The oil and gas industry currently has more than 9,000 permits to drill for oil on federal land, but they are deliberately keeping production low to please their investors and increase their short-term profits,” she said. “Even when the price of crude oil falls, oil and gas companies have refused to pass those savings on to consumers.”
“Let me be clear: price gouging is anti-capitalist,” Porter continued. “It exploits a lack of competition, which is a hallmark of capitalism. It is an effort to juice corporate profits at the expense of customers. Energy markets are reeling because of Russia’s invasion of Ukraine. Big oil companies, however, are using this temporary chaos to cover up their abuse.”
See what others are saying: (The Washington Post) (Vox) (NPR)
Lincoln College to Close for Good After COVID and Ransomware Attack Ruin Finances
Last year, 1,043 schools in the U.S. were the victim of ransomware attacks, including 26 colleges or universities, according to an analysis by Emsisoft.
One of the Only Historically Black Colleges in the Midwest Goes Down
After 157 years of educating mostly Black students in Illinois, Lincoln College will close its doors for good on Friday.
The college made the announcement last month, citing financial troubles caused by the coronavirus pandemic and a ransomware attack in December.
Enrollment dropped during the pandemic and the administration had to make costly investments in technology and campus safety measures, according to a statement from the school.
A shrinking endowment put additional pressure on the college’s budget.
The ransomware attack, which the college has said originated from Iran, thwarted admissions activities and hindered access to all institutional data. Systems for recruitment, retention, and fundraising were completely inoperable at a time when the administration needed them most.
In March, the college paid the ransom, which it has said amounted to less than $100,000. But according to Lincoln’s statement, subsequent projections showed enrollment shortfalls so significant the college would need a transformational donation or partnership to make it beyond the present semester.
The college put out a request for $50 million in a last-ditch effort to save itself, but no one came forward to provide it.
A GoFundMe aiming to raise $20 million for the college only collected $2,452 as of Tuesday.
Students and Employees Give a Bittersweet Goodbye
“The loss of history, careers, and a community of students and alumni is immense,” David Gerlach, the college’s president, said in a statement.
Lincoln counts nearly 1,000 enrolled students, and those who did not graduate this spring will leave the institution without degrees.
Gerlach has said that 22 colleges have worked with Lincoln to accept the remaining students, including their credits, tuition prices, and residency requirements.
“I was shocked and saddened by that news because of me being a freshman, so now I have to find someplace for me to go,” one student told WMBD News after the closure was announced.
When a group of students confronted Gerlach at his office about the closure, he responded with an emotional speech.
“I have been fighting hard to save this place,” he said. “But resources are resources. We’ve done everything we possibly could.”
On April 30, alumni were invited back to the campus to revisit the highlights of their college years before the institution closed.
On Saturday, the college held its final graduation ceremony, where over 200 students accepted their diplomas and Quentin Brackenridge performed the Lincoln Alma Mater.
Last year, 1,043 schools in the U.S. were the victim of ransomware attacks, including 26 colleges or universities, according to an analysis by Emsisoft.
See what others are saying: (The New York Times) (Herald Review) (CNN)
U.S. Tops One Million Coronavirus Deaths, WHO Estimates 15 Million Worldwide
India’s real COVID death toll stands at about 4.7 million, ten times higher than official data, the WHO estimated.
One Million Dead
The United States officially surpassed one million coronavirus deaths Wednesday, 26 months after the first death was reported in late February of 2020.
Experts believe that figure is likely an undercount, since there are around 200,000 excess deaths, though some of those may not be COVID-related.
The figure is the equivalent of the population of San Jose, the tenth-largest city in the U.S., vanishing in just over two years. To put the magnitude in visual perspective, NECN published a graphic illustrating what one million deaths looks like.
At the beginning of the pandemic, the White House predicted between 100,000 and 240,000 Americans would die from the coronavirus in a best-case scenario.
By February 2021, over half a million Americans had died of COVID.
The coronavirus has become the third leading cause of death in the U.S. behind heart disease and cancer.
The pandemic’s effects go beyond its death toll. Around a quarter of a million children have lost a caregiver to the virus, including about 200,000 who lost one or both parents. Every COVID-related death leaves an estimated nine people grieving.
The virus has hit certain industries harder than others, with food and agriculture, warehouse operations and manufacturing, and transportation and construction seeing especially high death rates.
People’s mental health has also been affected, with a study in January of five Western countries including the U.S. finding that 13% of people reported symptoms of PTSD attributable to actual or potential contact with the virus.
Fifteen Million Dead
On Thursday, the World Health Organization estimated that nearly 15 million people have died from the pandemic worldwide, a dramatic revision from the 5.4 million previously reported in official statistics.
Between January 2020 and the end of last year, the WHO estimated that between 13.3 million and 16.6 million people died either due to the coronavirus directly or because of factors somehow attributed to the pandemic’s impact on health systems, such as cancer patients who were unable to seek treatment when hospitals were full of COVID patients.
Based on that range, scientists arrived at an approximate total of 14.9 million.
The new estimate shows a 13% increase in deaths than is usually expected for a two-year period.
“This may seem like just a bean-counting exercise, but having these WHO numbers is so critical to understanding how we should combat future pandemics and continue to respond to this one,” Dr. Albert Ko, an infectious diseases specialist at the Yale School of Public Health who was not linked to the WHO research, told the Associated Press.
Most of the deaths occurred in Southeast Asia, Europe, and the Americas.
According to the WHO, India counts the most deaths by far with 4.7 million, ten times its official number.