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Political tussle focusing on $600-a-week payments hits home for more than 130,000 people across the state.

PMG FILE PHOTO - A state Unemployment Department office.As Congress tussles with the next coronavirus aid plan, more than 130,000 Oregonians are in danger of having their pandemic unemployment benefits interrupted — or even losing the extra $600 per week that Congress approved four months ago.

The money runs out July 31. The acting director of the Oregon Employment Department says unemployed workers would still get all of their money retroactively if they were deemed eligible for benefits as of Saturday, July 25.

David Gerstenfeld said Wednesday, July 22, that the length of any interruption will hinge on what Congress does or does not do. "If Congress were to take the most easy-to-implement route of just extending the current program to a future date, we'd probably have a few more days before we would be forced to have an interruption in those payments," he told reporters during a conference call.

"If it is anything other than that, unfortunately, we're likely already at a point where there would be some interruption, because it would take some changes to our computer coding, we would need to look at the processes and train our employees. All of that takes time."

Gerstenfeld estimates his agency has paid out $2 billion in the extra benefits, which Congress included in the $2 trillion CARES Act on March 27.

The House is scheduled to start its summer recess July 31; the Senate, on Aug. 7.

Political tussle

The Democratic-led House acted back on May 15 to pass a $3 trillion plan in the HEROES Act, which includes a simple extension of the $600-per-week extra benefit through Dec. 31. The Republican majority in the Senate, however, has balked both at the price tag of the House plan and any extension of benefits. Some critics have argued that the higher unemployment benefits, which are intended as full wage replacement, deter some people from going back to work.

But some Republicans, eying the possibility that inaction will cause their party to lose its majority in the Nov. 3 elections, have said they might be open to a short-term extension while Congress resolves a larger pandemic aid plan.

U.S. Sen. Ron Wyden is a Democrat who negotiated the original extra benefits with the Republican chairman of the Senate Finance Committee and Treasury Secretary Steven Mnuchin back in March. He said if there is any delay, it's on the part of Republicans.

Wyden issued this statement Thursday, as Senate Republicans and President Donald Trump's administration work out features of their own proposal:

"Donald Trump and Senate Republicans are responsible for this catastrophe, and they are responsible for millions of families not having money to pay rent or buy groceries on Aug. 1. Even today, they have no proposal, except some vague plan to cut benefits and make the program even more difficult for overburdened states to administer. In contrast, I released my proposal in May and House Democrats passed the HEROES Act in May.

"Let me make one point clear: Due to ancient technology, states need between one and four weeks to adjust the $600 boost. At this late hour, the only option to guarantee benefits do not lapse is the Democratic plan to extend the $600 weekly benefit. Republicans rejected that plan outright. They were never serious about preventing a lapse in benefits."

Wyden is the top Democrat on the Senate Finance Committee, which writes tax legislation. State unemployment funds draw from employer taxes, although the U.S. Department of Labor sets the guidelines. Benefit levels are set by states. 

Wyden's plan would tie future extra benefits to a state's three-month average unemployment rate. For every percentage-point drop below 11%, the benefit would be reduced by $100 until the rate reached 6%.

During the 2007-10 recession, similar economic triggers were used. But they applied only to how long a state could provide regular unemployment benefits, which cover only a portion of lost wages. The maximum period then was extended to 99 weeks, which finally expired in 2013.

Gerstenfeld said if Congress does something other than a straightforward extension, it will take time for his agency and counterparts in other states to get the money out to unemployed workers.

"For some types of extensions being considered, it might be a brief interruption, depending on what they do," he said. "If it's the most complex of the options we've heard about, it could be a significant one. At this point it's hard for us to give people any guidance because we don't know what will pass, if anything."

Upgraded systems

Also on Wednesday, Wyden proposed $500 million for states to upgrade their unemployment claims systems. Oregon has used a mainframe system dating back three decades. It's based on a computer language — COBOL — that was introduced in 1959. Gerstenfeld said his agency is about ready to announce the selection of a vendor for a new system, which has been in the works for almost a decade.

"There's no excuse for workers waiting in line for hours outside state unemployment offices because they can't access websites," Wyden said. "While Congress has provided funds to help states administer supercharged unemployment benefits, more is needed. My bill would provide critical funding and ensure states develop accessible, user-friendly online filing systems." 

Gerstenfeld said a recent Google application to the agency's mainframe system, which processes all benefit payments, will help applicants who are newly eligible for unemployment benefits. The CARES Act made self-employed people, independent contractors, freelancers, gig and temporary workers eligible for benefits for the first time since the unemployment began in the 1930s. But it also required state agencies to verify that they do not qualify for regular benefits.

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NOTE: Updates with Sen .Wyden's statement Thursday.

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