Janet Yellen and Marty Walsh confirmed Biden’ won’t extend federal unemployment benefits past September.
They wrote in a letter that Biden still supports states using stimulus funds to help the unemployed.
26 states, all but one governed by Republicans, moved to end the unemployment boost early. See more stories on Insider’s business page.
As part of his American Rescue Plan, President Joe Biden extended $300 weekly unemployment benefits through September 6. Top officials in his administration confirmed on Thursday that he won’t be extending the benefits any further.
Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh wrote a letter to the chairs of the House and Senate finance committees with an update on where unemployment benefits stand. They wrote that although the weekly benefits have been a “critical lifeline” for millions of unemployed Americans, a further extension of the benefits — which some Democrats have been pushing for — is off the table.
“The temporary $300 boost in benefits will expire on September 6th, as planned,” Yellen and Walsh wrote. “As President Biden has said, the boost was always intended to be temporary and it is appropriate for that benefit boost to expire.”
However, the officials noted that even as the economy is recovering from the pandemic and payrolls are being added to the labor market, unemployed people may still require financial assistance, and the Delta variant could bring economic setback, as well.
That’s why they said the Labor and Treasury Departments will take the following steps to help those are unemployed:
The Treasury is reaffirming that states can use what they received from the $350 billion in stimulus aid to provide additional support for unemployed people beyond the expiration of the benefits;
Labor will communicate with states on how they can best use their “existing UI (unemployment insurance) infrastructure” to support state-funded benefits using stimulus funds;
And Labor is announcing $47 million in new grants to support reemployment services for all Americans.
Yellen and Marsh also wrote the pandemic has exposed “serious problems” in the UI system that requires reform, which is why Biden is asking Congress to consider long-term reform of UI in Senate Democrats’ $3.5 trillion reconciliation bill.
“The President has already laid out his principles for such reform: he believes a 21st century UI system should prevent fraud, promote equitable access, ensure timeliness of benefits, provide adequate support to the unemployed, and automatically expand benefits in a recession ,” they wrote.
After a weak April jobs report, 25 GOP-led states — and one governed by a Democrat, Louisiana — moved to end unemployment benefits early for their residents because they believed the benefits disincentivized work. According to an analysis from the left-leaning People’s Policy Project, over 20 million Americans will lose their benefits when the September expiration rolls around.
Insider’s Joseph Zeballos-Roig and Juliana Kaplan reported that the Delta variant has people begging for more benefits, given that the variant could jeopardize the return to work. But even before Yellen and Walsh’s announcement, moderate Democrat Joe Manchin of West Virginia told Insider he would not support a further extension of the benefits in a reconciliation bill, suggesting a slim likelihood of it passing through Congress.
“I’m done with extensions,” he said. “The economy is coming back.”