California on Monday borrowed money from the federal government to make payments on unemployment benefits, the first state in the U.S. to do so, reports The Wall Street Journal.
Illinois and Connecticut may soon follow suit – both received approval for federal loans of up to $12.6 billion and $1.1 billion, respectively.
California borrowed $348 million after receiving approval to draw up to $10 billion until the end of July.
The funds can be used to pay out regular claims separate from the $600 in federal benefits added to weekly checks for Americans under the coronavirus rescue package approved in March. To repay the money, reports say, borrowing states will face tough budgeting decisions down the line.
Aprils’ job report is likely to show the highest unemployment rate on record, according to the Journal, at 16.1 percent. Workers filed 26.5 million claims for unemployment benefits from March 15 through April 18, according to the U.S. Labor Department.
California’s unemployment rate jumped to 5.3 percent in March, the largest jump on record since 1976, but things could get much worse for the nation’s most populous state as the job losses were based on a survey taken the same week the NBA announced it was suspending its season and Gov. Gavin Newsom banned gatherings of more than 250 people.
More than 30 million people have filed unemployment claims in the U.S., including about 3.7 million in California.
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.
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