White House warns unemployment benefits at risk in shutdown
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The White House is warning that unemployment benefits are in jeopardy in some states if the shutdown drags on, though the risks are far less dire than for food assistance or SNAP.
Why it matters: About 1.6 million Americans are unemployed and rely on unemployment insurance to get by — including about 20,000 former federal workers.
Where it stands: "When we're talking about the SNAP program, one of the other programs we're definitely concerned about is unemployment insurance," Labor Secretary Lori Chavez-DeRemer said Thursday, speaking beside Congressional Republicans.
- "That will be the next thing that we have to be concerned about."
Catch up quick: The Trump administration stopped paying SNAP on Saturday, blaming the shutdown, though two federal judges have ordered the resumption of those benefits to the roughly 42 million people who rely on them.
How it works: Unlike SNAP, which is paid for by the federal government, unemployment insurance benefits are funded almost entirely by the states through taxes paid by employers.
- The federal government funds only the administrative costs — i.e., the money used to pay staff to process the benefits. It represents only about 7% of the total cost of the program.
The latest: States haven't received any new funds funds for those admin costs since October 1, a Labor Department official tells Axios.
- Some states are already running low. "We are hearing informally that many states will start to feel the impact by mid-November," a department officials tells Axios.
Reality check: Former DOL officials and experts on unemployment say that there's little chance that Americans will go without unemployment insurance.
- "I'm easily freaked out about unemployment insurance problems, and I'm not freaked out about this," says Michele Evermore, a senior fellow at the National Academy of Social Insurance and a leading UI expert who worked on the program during the Biden administration.
- States "will move heaven and earth" to pay unemployment insurance, says Andrew Stettner, director of economy and jobs at the Century Foundation, who also worked on the program during the Biden administration. "I don't believe any state is on the brink."
Zoom in: In a letter sent out to states last week, the Labor Department points to other ways they can fund those costs, and suggests states will be reimbursed once the shutdown ends.
- "Some states will be fine for months and months. Some will not," a source familiar with the Labor Department tells Axios.
- Ohio might be among those most at risk — the state warned this week that it may have to furlough workers across its agencies amid the shutdown.
The bottom line: The ongoing shutdown is putting more Americans in a rough financial spot.
Go deeper: Trump says SNAP will only get paid after shutdown, defying multiple court orders
