U.S. lets states use federal pandemic funds to extend jobless aid

FILE PHOTO: U.S. Treasury Secretary Janet Yellen answers questions during a Senate Appropriations Subcommittee hearing
U.S. Treasury Secretary Janet Yellen.
Greg Nash/Pool via REUTERS

U.S. states can use federal pandemic-related funds passed this year to extend unemployment aid, President Joe Biden’s administration said on Thursday, saying the Delta variant impact on some local economies may mean people need help for longer.

“There are some states where it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time, allowing residents of those states more time to find a job in areas where unemployment remains high,” U.S. Treasury Secretary Janet Yellen and U.S. Labor Secretary Martin Walsh told congressional leaders in a letter.

“The Delta variant may also pose short-term challenges to local economies and labor markets,” they added.

Extra federal unemployment benefits will expire as planned on Sept. 6, they said. But states can tap funds from a law enacted in March called the American Rescue Plan, they told the heads of the Senate Finance Committee and the House of Representatives Ways and Means Committee.

COVID-19 deaths in the United States reached a five-month high this week, with cases most prevalent in the U.S. South as the highly contagious Delta variant continued to spread, according to a Reuters tally.

Surging infections have threatened to upend the nation’s battle with the pandemic as well as its economic recovery.

Still, data released on Thursday showed U.S. weekly jobless claims hit a 17-month low as the ranks of the unemployed continued to shrink despite threats from rising COVID-19 cases.