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- Biden is encouraging states to use stimulus funds to help the unemployed after benefits expire.
- Janet Yellen and Marty Walsh confirmed Biden won't extend unemployment benefits past Labor Day.
- They wrote in a letter they will work with states on how stimulus funds can best be used for unemployed workers.
- See more stories on Insider's business page.
Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh confirmed on Thursday that President Joe Biden won't extend unemployment benefits beyond September 6. But at the same time, they encouraged states to keep helping unemployed people beyond that date.
Walsh and Yellen wrote a letter to the House and Senate finance committee chairs with an update on where unemployment benefits stand. While they said benefits will expire on Labor Day "as planned," they also noted that Biden encourages states to make use of funds allocated from his American Rescue Plan to continue helping unemployed people after the benefits expire nationwide.
"Now, in states where a more gradual wind down of income support for unemployed workers makes sense based on local economic conditions, American Rescue Plan funds can be activated to cover the cost of providing assistance to unemployed workers beyond September 6th," they wrote.
States received $350 billion from Biden's stimulus plan, and given the rise of the Delta variant, which could jeopardize people's return to work, further aid might be necessary.
Specifically, Yellen and Walsh wrote the Treasury Department is encouraging states to use the stimulus to provide additional support for workers whose benefits expire on September 6 and for workers outside of regular state unemployment programs, and the Labor Department will communicate to states how they can use their "existing UI (unemployment insurance) infrastructure" to support the benefits.
After a weak April jobs report, 25 GOP-led states - and one governed by a Democrat, Louisiana - moved to end unemployment benefits early for their residents because they believed the benefits disincentivized work. According to an analysis from the left-leaning People's Policy Project, over 20 million Americans will lose their benefits when the September expiration rolls around.
Despite ending the benefits, Yellen and Walsh wrote Biden still wants unemployment insurance reform to be included in Democrats' $3.5 trillion reconciliation bill, which recently passed the Senate.
"The President has already laid out his principles for such reform: he believes a 21st century UI system should prevent fraud, promote equitable access, ensure timeliness of benefits, provide adequate support to the unemployed, and automatically expand benefits in a recession," they wrote.