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Louisiana becomes first Democrat-led state to drop enhanced unemployment benefits

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Louisiana will become the first Democrat-led state to end federal enhanced unemployment benefits early, joining 25 Republican-led states that announced they will end the programs before they were set to run out in September.

Democratic Governor John Bel Edwards signed a bill into law on Wednesday that ends the $300-a-week supplementary federal unemployment assistance as well as other pandemic-related unemployment programs at the end of July. At the same time, Louisiana will increase the state's weekly maximum unemployment benefit by $28 starting next year.

Some of the GOP-led states have already begun ending enhanced federal benefits, citing the recovering economy and workforce shortages. Iowa, Missouri and Mississippi ended federal programs extended under the American Rescue Plan until early September on June 12. This week, nine more states will join them in exiting the programs, including Alabama, Alaska, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming. Not including Louisiana, more than 3.9 million workers in the 25 states will lose the weekly $300 supplemental payments, the National Employment Law Project recently found.

Governor John Bel Edwards had previously said he was already considering ending federal unemployment programs as early as August 1, and that the bill's July 31 end date was a good compromise. 

"What we know is that when kids go back to school, parents have more of an opportunity to go back to work without having to worry about child care, and that really was always the reason for picking August as opposed to September," Edwards said last week. He argued jobs are coming back to Louisiana pretty quickly, but he said the state needed a little more time than those who had already started ending benefits, if they were going to end benefits "responsibility."

When the first GOP-led states started announcing last month they were ending participation in federal unemployment programs early, the Biden administration pushed back, arguing unemployed Americans were still facing challenges such as a lack of child care and health concerns. However, earlier this month, the White House said GOP-led states had the right to end programs early. 

Responding to a question about enhanced benefits before a House committee hearing on Thursday, Treasury Secretary Janet Yellen said states are in different situations and some still face extremely high unemployment. She said states should have the flexibility to do what is appropriate for their circumstances.

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