Aug 9, 2020 - Politics & Policy

Pelosi: "States don't have the money" for Trump's unemployment order

House Speaker Nancy Pelosi claimed on "Fox News Sunday" that states don't have the funds to comply with the executive order President Trump signed on Saturday, which requires them to cover 25% of an additional $400 in weekly unemployment benefits.

Why it matters: Many state and local governments have had their budgets devastated by the economic impacts of the coronavirus, which have caused expenses to soar and revenues to plunge.

  • White House economic adviser Larry Kudlow said Sunday he wasn't sure whether states could afford the costs, telling CNN's "State of the Union": "We'll probably find that out today or tomorrow."
  • One of the major sticking points in coronavirus stimulus negotiations between Democrats and Republicans was relief for state governments. Trump has called the request a "bailout" for years of mismanaged budgets in Democratic-led states.

What she's saying: "States don't have the money to do that. They have expenses from the coronavirus, they have lost revenue from shelter-in-place and the fact that people are not being able to go out and spend money and inject demand into the economy as they would normally."

The other side: Treasury Secretary Steven Mnuchin said on "Fox News Sunday" that states can either use money already appropriated by the federal government to provide the 25% of unemployment benefits, or they can request a waiver from Trump. "We've been told by the states they can get this up and running immediately," he added.

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