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Illustration: Sarah Grillo/Axios

It's not just the extra $300. A subset of workers around the country is getting shut out of the unemployment system altogether.

Driving the news: Of the 26 states cutting topped-up benefits, all but four are ending (or have already ended) the program that allowed self-employed, gig and freelance workers to collect jobless aid.

Why it matters: It's part of a grand experiment underway in states across the country: preemptively shutting off pandemic-era programs in an effort to coax people back to work as businesses say they can't find staff.

  • "They were promised benefits until September. Months later, states are saying 'nope, just kidding.' That's what's truly unprecedented," says The Century Foundation's Andrew Stettner.

Flashback: Typically, contractors or others with limited work history are ineligible for unemployment. Pandemic Unemployment Assistance (PUA), created in the first stimulus package, changed that.

  • Nearly 6 million are collecting unemployment through this program, according to government data — though that's likely overstated.

What they're saying: "We have full industries that are coming back slowly, like entertainment," which employs people currently relying on the program, says Stephanie Freed, who helped create ExtendPUA.org, an advocacy group.

  • Uber and Lyft — whose workers leaned on PUA — say they are facing a driver shortage as demand soars back.

What's happening: The early cutoff of the program so far impacts at least 2 million Americans, according to estimates by Stettner.

  • That includes workers in a program that offers benefits for those who have exhausted traditional state benefits (also ending in 22 states).

The big picture: "Some people are losing some money and others are losing all money," in states cutting unemployment benefits, says Kathryn Edwards, an economist at RAND.

  • "It's not a consistent strategy, which made me think there's no clear target — it's just 'let's cut unemployment benefits, somehow.'"

Go deeper

Fears grow for the financially vulnerable, index shows

Data: Morning Consult/Axios Inequality Index; Chart: Axios Visuals

Inequality widened in September, driven by income losses and fears among the most financially vulnerable, according to the latest Morning Consult/Axios Inequality Index released today.

Why it matters: As COVID continues to spread, expanded pandemic-era unemployment benefits expired this month, removing a financial safety net for 7.5 million Americans.

2 hours ago - World

Coast Guard searches for 39 people after boat capsizes off Florida coast

A U.S. Coast Guard ship leaving its base in Miami Beach, Florida, in July. Photo: AP/Marta Lavandier

U.S. Coast Guard crews were searching into the night for 39 people whose boat sank off Florida's coast over the weekend after traveling from the Bahamas.

The big picture: A "good Samaritan" contacted the Coast Guard about 8 a.m. Tuesday to say they "rescued a man clinging to a capsized vessel" 45 miles east of Fort Pierce, per a tweet from the agency, which noted it was dealing with "a suspected human smuggling venture."

Scoop: Race to lead NRCC kicks off

Reps. Darin LaHood (left) and Richard Hudson. Photos: Al Drago/Getty Images (LaHood) and Chip Somodevilla/Getty Images

Reps. Richard Hudson (R-N.C.) and Darin LaHood (R-Ill.) are both telling colleagues they plan to run for chair of the National Republican Congressional Committee for the 2024 cycle, people familiar with the matter tell Axios.

Why it matters: Republicans are confident they'll win the House majority back this fall, and the early jockeying to lead the caucus' fundraising apparatus is just another indicator of their optimism.