Newsom announces reforms to improve processing CA unemployment claims amid backlog

The California EDD says it has processed 8 million unemployment insurance claims since March and distributed roughly $49 billion in benefits.
As Californians struggle financially during the pandemic, Gov. Gavin Newsom announced changes to address the back up at the Employment Development Department.

More than 1.4 million laid-off Americans applied for unemployment benefits last week, further evidence of the devastation the coronavirus outbreak has unleashed on the U.S. economy.

The California EDD says it has processed 8 million unemployment insurance claims since March and distributed roughly $49 billion in benefits.

RELATED: Economy shrank at record-breaking 33% rate last quarter as 1.4M sought unemployment aid last week

Newsom said the state's backlog of unemployment claims will take two months to clear, so he plans to deploy a strike team to address issues with the system and streamline the process for resolving claims. The team will focus on immediately processing claims and enhancing the partnership the state Legislature.

Meanwhile, lawmakers are working on a new stimulus bill. The proposal from the Senate includes another $1,200 in direct payments to taxpayers, but it cuts the enhanced unemployment benefit from $600 to $200.

State lawmakers are looking for ways to fill the gap as the extra $600 per week in unemployment benefits expire Friday. One move lawmakers are considering is borrowing billions of dollars from a federal stimulus plan and providing the additional funds to the unemployed in California.

RELATED: CA may create $600 weekly unemployment benefit as enhanced federal aid set to expire

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California lawmakers may offer relief for recipients of unemployment benefits as the $600 weekly federal aid is set to expire July 31.

In Lake View Terrace, a food distribution event is being held Thursday at the All Nations Church. Organizers are expecting 2,500 people -- a reminder of how many people are struggling with basic necessities like food.

The U.S. economy shrank at a dizzying 33% annual rate in the April-June quarter -- by far the worst quarterly plunge ever -- when the viral outbreak shut down businesses, throwing tens of millions out of work and sending unemployment surging to 14.7%, the government said Thursday.

The Commerce Department's estimate of the second-quarter decline in the gross domestic product, the total output of goods and services, marked the sharpest such drop on records dating to 1947. The previous worst quarterly contraction, a 10% drop, occurred in 1958 during the Eisenhower administration.

The Associated Press contributed to this report.

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