Home Forums Hunting & Shooting Hunter's Campfire Nearly half of states don't have enough funds to pay all those unemployment claims

Somebody is going to have to go to the bank

https://www.nbcnews.com/business/ec...o-not-have-enough-funds-pay-all-n1175246

By Martha C. White
Even as states are struggling to process a record number of jobless claims, experts warn that even greater challenges loom: A Labor Department report found that, as recently as February, unemployment insurance trust funds in nearly half the states were underfunded.

The staggering 6.6 million jobless claims filed last week call into question even the best-funded states' ability to pay unemployment benefits over a sustained period, said Howard Gleckman, a senior fellow at the nonpartisan Tax Policy Center, making it likelier than not that more federal intervention will be needed.

"We're talking about 10 million people filing for unemployment insurance in two weeks. Nobody is prepared for that," he said. "That's unprecedented."

Alon Ozer, chief investment officer at Omnia Family Wealth, said: "The flood of unemployment claims is something no state was planning for. I believe many states will still require federal aid."

The anticipated intervention would come on top of the additional unemployment insurance support included in the Coronavirus Aid, Relief and Economic Security (CARES) Act, which expands eligibility and access to payments.

According to the Labor Department, states are supposed to build up their reserves during economic expansions "in anticipation of paying a higher amount of benefits during recessionary periods." Ozer said low interest rates and the strong economy leading up to the crisis gave states time to refortify unemployment insurance trust funds depleted by the Great Recession, but the numbers suggest that some states didn't do enough to ensure solvency even in a more run-of-the-mill downturn.

"The flood of unemployment claims is something no state was planning for. Many states will still require federal aid."

Daniel Zhao, senior economist at Glassdoor, said: "The real concern is the long-term impact here. Some states are still struggling to return to pre-Great Recession funding levels a decade afterwards."

The Labor Department's report found that 22 states fell below the threshold for the recommended minimum adequate solvency level, including Pennsylvania, Ohio, Massachusetts, Texas and California — the five states with the highest weekly jobless claims.

"Because states have to balance their budgets, they are stuck between a rock and a hard place right now," Zhao said. "The CARES Act does provide some federal funding in order to support unemployment benefits, but at this point, the question is where is that money going to come from. Either spending on other benefits is going to have to decrease or taxes are going to have to increase ... or the federal government is going to have to expand funding."

Gleckman said it likely will be a little while before states can even begin to assess the full magnitude of their unemployment insurance payment obligations as reports of backlogs, long lines at offices and computer system crashes continue across the country. It's probable that many state agencies are facing staffing shortfalls because of coronavirus, as well, he said.

"In some places, the unemployment office staff is probably sick or not coming to work. There's a demand side problem and a supply side problem," Gleckman said. "This is going to be a tremendous challenge."

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And it's a challenge likely to remain undefined in the near term. The unknown trajectory of the virus in the coming weeks and months renders accurate forecasting nearly impossible, Ozer said.

"It very much depends on the length and the magnitude of the crisis," Ozer said. "At this point there's much more unknown than known."

Gleckman predicted that "the states are going to be back to the feds for more assistance."

"The goal is going to be to help them get out from under this enormous burden they're going to have to face," he said. "I think the CARES Act is just the first tranche."

Martha C. White
Martha C. White is an NBC News contributor who writes about business, finance and the economy.

by Taboola

Tough chit. They can send 350 million to Africa; they can take care of Americans. What we really need is to hang politicians

Trump should audit the state's spending before providing any aid.
No benefits for illegals should be allowed and this should include
no welfare, loans or tuition breaks.

he Labor Department's report found that 22 states fell below the threshold for the recommended minimum adequate solvency level, including Pennsylvania, Ohio, Massachusetts, Texas and California — the five states with the highest weekly jobless claims.

"Because states have to balance their budgets, they are stuck between a rock and a hard place right now," Zhao said. "The CARES Act does provide some federal funding in order to support unemployment benefits, but at this point, the question is where is that money going to come from. Either spending on other benefits is going to have to decrease or taxes are going to have to increase ... or the federal government is going to have to expand funding."

https://www.nbcnews.com/business/ec...o-not-have-enough-funds-pay-all-n1175246

Sorry, I post the same info before reading

Sooooooo many people out of work. Folks I work with laid off 800 and some just in this state. Likely near 3000 total.

Most people I know are out of work or working reduced hours. Best bud is a painting contractor and his jobs are getting thin. Last month he had a backlog and was bidding jobs with start dates into next year.

It’s fugked.

Good time to be a .gov employee!

Bingo.

Where do "they" get the money to send to Afreaka or phuggin Germany for that matter?

The printing press and fiat currency has about run its course. If it hasnt, Im promoting fiat labor, fiat welfare and fiat taxpayers....but fiat food would suffice.

Once applied for, I believe it takes up to 6 weeks to actually receive the money if it’s approved.

New York should be alright. The wife and I have been trying to sign up everyday for 3 weeks now with no luck.

I wish you luck but New York of all states would be one of the more suspect to me .

If businesses use the CARE Act, we won’t have this problem.


The fûcking media is driving fear and panic. It’s profoundly fücking fücked.

Some of my young colleagues keep commenting on all of the $$$ out there now that may just end up being free down the road. These are people who make decent livings, are "employees" of ther own professional corporations, and most likely living beyond their means like many others.

No such thing as free $$$ regardless of what they say is what I tell them. They will learn. I encourage them to read about, study, and understand the Laws of Thermodynamics which governs all things natural in the macro state. Too many selfish "micro" thinkers out there. Mother nature does not smile down on stupidity... many (not all of course) should take a minute and think.

Lessons to be learned by many, if not most. Sobering. Printing endless amounts of money will never last!

Ummm we are in a PANDEMIC omg, we aren't suppose to leave home let alone work.....

The goobermint workers & pensioners want you to stay home and not infect them......

Damn deplorables ... jeesh

I think people in New York will be OK...........Cuomo cares. All kidding aside.............good luck to you.

Well they're not going to have to pay out to folks who can't get signed up. I know a lot of people besides us who have been trying for days and weeks unsuccessfully. We have enough money to last a few months but lots of folks don't. I imagine they're going to be getting pretty desperate along about now.

Yep and the stimulus checks are a few weeks out, too.

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I want interest and penalties with mine

Wife and I are looking at retirement and we have paid into the system all our life. Never took one penny from the fund.
Union state road workers draw on it 5 months a year, every year. Union socialist slush fund.

In the long run, the effect that this has had on our economy is going to be much worse than what's happening medically. There will be a lot of small businesses that will never recover.

Ponzi scheme.