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Pennsylvania May Seek Federal Loan To Pay Jobless Benefits

labor_department_is_seen_near_the_capitol_in_washington._the_record_unemployment_rate.jpg
J. Scott Applewhite
/
AP
In this May 7, 2020, photo, the entrance to the Labor Department is seen near the Capitol in Washington.

Pennsylvania has contacted the U.S. Department of Labor about a loan to prop up its unemployment compensation trust fund as President Donald Trump pushes states to help pay for an extension of federal unemployment benefits.

Gov. Tom Wolf’s office said it was waiting for federal guidance to understand the full impact of Trump's executive order. But, it said, reducing the benefit from $600 a week to $400 a week will make it harder for families to get by during the pandemic.

It places a larger financial burden on states, the administration said, noting that it has inquired about a federal loan as a precautionary measure.

It's not clear whether Trump has the constitutional authority to extend federal unemployment benefits by executive order or whether states will sign on.

Under Trump’s plan, the $400 a week requires a state to commit to providing $100.

Pennsylvania had $3.4 billion in its unemployment compensation trust fund at the beginning of the year, according to federal figures. Wolf's administration didn't immediately say how much is left.

Just this year, Pennsylvania paid the final installment on $2.8 billion in bonds it issued in 2012 to retire a post-recession unemployment compensation debt that businesses owed to the federal government. The total debt service was $3.4 billion.