As GOP-run states slash jobless aid, the Biden administration finds it has few options

The Biden administration has scrambled to devise a way to keep paying heightened unemployment benefits to an estimated 3.6 million Americans who stand to lose them soon in Republican-led states, but Labor Department officials have come to believe that the law does not allow them to do so.

With a federal intervention now unlikely, jobless Americans in at least 22 states including Arizona, Ohio and Texas are set to see their payments fall by $300 each week — or be wiped out entirely — as GOP governors try to force people back to work in response to a potential national labor shortage.

Federal officials have been reviewing whether they could mandate that states continue paying their unemployed workers, preserving a series of coronavirus stimulus programs dating to last spring. That includes Pandemic Unemployment Assistance, which provides weekly aid to self-employed workers and others who labor on behalf of gig economy companies such as Uber.

But Labor Department officials have come to believe that the government cannot legally force states to administer these benefits, according to two people briefed on the matter who spoke on the condition of anonymity to describe private deliberations. Nor can Washington circumvent Republican governors by administering unemployment checks on its own or through cooperating agencies in other states, the sources said.

A more formal determination on the matter from the Labor Department is expected soon.

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Even if the Labor Department had the authority, the agency probably would face significant legal and logistical hurdles in distributing the aid swiftly, one of the officials said. The federal government most likely cannot erect a system to review unemployment claims and dole out weekly sums before the stimulus aid is set to expire in early September — a complex task involving a web of technology and personnel that has flummoxed many state agencies despite decades of experience.