News and Commentary

South Dakota Governor Declines Federal Funding For Unemployment Boost, Cites State’s Economic Rebound
Kristi Noem, governor of South Dakota Governor, speaks during an event at Mount Rushmore National Memorial in Keystone, South Dakota, U.S., on Friday, July 3, 2020. The early Independence Day celebration, which will feature a speech by President Donald Trump, a military flyover and the first fireworks in more than a decade, is expected to include about 7,500 ticketed guests who won't be required to wear masks or socially distance despite a spike in U.S. coronavirus cases.
Al Drago/Bloomberg/Getty Images

South Dakota Governor Kristi Noem (R) has declined to accept additional federal funding for the $400 weekly unemployment insurance boost, which the Trump administration recently extended via an executive memorandum.

In a statement released on Friday evening, the Republican governor thanked President Donald Trump for his unilateral executive action in the face of congressional gridlock but maintained that the Mount Rushmore state is in the “fortunate position” to not need it.

“South Dakota’s economy, having never been shut down, has recovered nearly 80% of our job losses,” said Noem in a statement Friday. “South Dakota is the only state in the nation that didn’t have extended benefits kick in because our insured unemployment rate has been the lowest in the nation.”

The governor added that the housing construction market in the state is “the third best” in the nation, and “many, many businesses are looking to relocate to South Dakota because of the decisions we made during the pandemic.”

“South Dakota is open for business – that applies to our business owners and their employees,” she concluded.

The unemployment insurance boost was first passed by Congress back in March at $600 per week to supplement the existing unemployment insurance system. Although the original boost expired on July 31, Trump extended it last week at $400 per week 25% of which would be covered by the states using the Disaster Relief Fund.

According to the South Dakota Department of Labor and Regulation, the state had a June 2020 unemployment rate of 7.2%. The percentage of people who are receiving unemployment insurance in the state has gradually declined from a peak of 6.03% in mid-May to 3.51% in early August.

During the recent round of coronavirus relief negotiations between Trump administration officials and Democratic leaders, Treasury Secretary Steven Mnuchin favored a roughly 70% wage replacement cap instead of the flat unemployment insurance boost that was enacted back via the bi-partisan CARES Act.

The push for change echoed the concerns of several Republican senators who spoke out against the $600 boost before it was enacted, arguing that it could incentivize unemployment among people who would receive more money from not working.

“If this is not a drafting error, then it’s the worst idea I’ve seen in a long time, and that’s saying a lot given that we’re in Washington,” said Senator Lindsay Graham (R-SC) of the policy during a press conference in March.

House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY), who were recently leading negotiation on behalf of Democrats, were favoring the unemployment insurance boost that the House passed in May, which would extend an extra $600 through January of 2021.

The negotiators ultimately failed to reach a deal, and Pelosi reportedly compared the difference in priorities between Democrat and Republican negotiators as trying to breed a giraffe with a flamingo.

Both the House and the Senate are expected to be out of session until early September.

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The Daily Wire   >  Read   >  South Dakota Governor Declines Federal Funding For Unemployment Boost, Cites State’s Economic Rebound