Hogan administration defends decision to cut federal unemployment benefits

Members of Gov. Larry Hogan’s administration on Tuesday defended his decision to end federal unemployment programs two months early, an action that will cut benefits for several hundred thousand Marylanders this summer.

In a briefing with state lawmakers, the Republican governor’s chief legislative officer said Hogan looked at factors including increasing vaccination rates, job growth and stories from business owners who say they can’t find people to hire.

“The governor did not make this decision in a vacuum,” Keiffer Mitchell Jr. told members of the Economic Matters Committee.

The virtual meeting came a week after Hogan announced that Maryland would end participation in multiple federal pandemic programs in July, including one that provides $300 extra weekly payments and another for gig workers and the self-employed. The state also will reinstate its work-search rule, which requires unemployment claimants to document that they are looking for a new job.

At the time of the announcement, Hogan said “we look forward to getting more Marylanders back to work.”

Business groups have pushed to end the enhanced benefits and to resume the work-search requirement, saying that will help them fill job openings.

Del. Dereck Davis, a Prince George’s County Democrat who chairs the committee, noted that the state has committed $1.1 billion in federal funds to replenish the state’s unemployment insurance trust fund — a move that means businesses will not see increased unemployment tax rates for two years.

“If you’re getting something, you shouldn’t be going after someone else’s safety net when yours is still there,” Davis said.

Republicans on the committee said Hogan’s actions will get people who lost jobs in the pandemic back to work.

“That is the best and most direct way to get money to people, is to put them back on the payroll working,” said Del. Christopher Adams, an Eastern Shore Republican.

Del. Lorig Charkoudian, a Montgomery County Democrat, questioned how Hogan’s decision was made. She pointed to research, including a University of Chicago study that found expanded unemployment benefits during the pandemic boosted spending more than expected and had little effect on whether people looked for jobs.

The two-hour meeting also touched on ongoing customer-service issues that have frustrated unemployment claimants throughout the pandemic. Most recently, people reported this week that they could not file their required weekly questionnaire to continue receiving benefits.

Some legislators told State Labor Secretary Tiffany Robinson that more than a year into the pandemic they are still inundated with calls for help from constituents who need to resolve problems with the labor department, such as delayed payments.

“I’m talking about very poor people in the district that I represent,” said Del. Talmadge Branch, a Baltimore Democrat. “They’re trying to get the basic benefit that’s owed to them because they’re no longer working.”

Robinson said no state could have been prepared for the record-breaking volume of claims received during the pandemic.

The department added 10 new federal unemployment programs and put hundreds of thousands of people who never had qualified before into the system, she said.

During the meeting, Robinson also said fraud, mostly involving identity theft, is “rampant.” She said 89% of claims flagged for investigation have been confirmed as fraudulent.

She said she expects fraud to be reduced when Maryland ends the expanded federal benefits.

The end of those programs also will give the agency more capacity “to get through the backlog faster and address every single claimant’s issues,” she said.

“We do believe there’s a light at the end of the tunnel for our customers to be fully serviced and have the customer service they deserve by our department,” she told lawmakers, “but also for a reduction in calls and complaints to your offices, as well.”