Politics

California Faces Massive Budget Cuts if Trump Unemployment Plan Implemented: Newsom

Major cuts to Californias budget would be required if the state puts President Donald Trumps new unemployment plan into place, according to Gov. Gavin Newsom.

It “would create a burden the likes which even a state as large as California could never absorb without, again, massive cuts to important services, or further burdening … businesses and individuals,” Newsom, a Democrat, told reporters during a Monday virtual press conference.

Trump, a Republican, signed an executive order over the weekend that enhances the unemployment payment by $400 a week. The increase will be funded in a 75-25 split between the federal government and states, according to a White House memo.

Californias 25 percent responsibility would be $700 million a week, state officials said. They could draw from a fund that currently has $70 billion, but if the fund drops to $25 billion or less, the federal government support disappears.

“If the state of California was to absorb those costs, youre looking at $2.8 billion every week of state resources that we would have to find, programs wed otherwise have to cut, or revenue we would have to generate, to make up for that gap,” Newsom said.

“Were going to need the federal government to provide the support on that 25 percent, or we are at peril of being in a position where we are making false commitments, false promises to millions of Californians, that ultimately we simply cannot meet,” he added later.

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President Donald Trump takes questions from the media on the tarmac at Morristown Municipal Airport in Morristown, New Jersey, on Aug. 9, 2020. (Jim Watson/AFP via Getty Images)

Trump told reporters on Sunday that some states may pay nothing for the enhanced unemployment payment.

“We have a system where we can do 100 percent or we can do 75 percent, they pay 25, and it will depend on the state, and they will make an application. We will look at it, and well make a decision,” he said.

Other governors have also spoken out about the executive action.

New York Gov. Andrew Cuomo, a Democrat, told reporters in a joint press conference with Kentucky Gov. Andy Beshear on Monday that it would cost the state $4 billion between now and December to pay the 25 percent responsibility for the unemployment payment enhancement.

“We started with a 30-billion-dollar hole and your solution is to cost me another 4 billion dollars? Thank you. Thats handing the drowning man an anchor. Hold onto this maybe itll help,'” Cuomo said.

Beshear, another Democrat, claimed that “virtually no state” can afford to pay for the proposed cost-share.

“I think its really important that we see ultimately a Congressional solution, and Id like to see it at the $600 level but if its at $400 it needs to be fully federally-funded with administrative cost attached to it,” he said.

The CARES Act included a federally-funded $600 enhancement to unemployment but those benefits expired in late July.

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