Senate GOP bill could pose 'huge challenge' for Wisconsin's stressed unemployment system, DWD secretary says

MADISON - Wisconsin's massive backlog for unemployment benefits could get far worse if Congress passes a new relief package from Republicans in the U.S. Senate, a top official in Gov. Tony Evers' administration says.

Senate Republicans are proposing a $1 trillion coronavirus relief bill known as the HEALS Act which would, among other measures, cap federal unemployment assistance to 70% of workers' pay instead of extending a weekly $600 unemployment subsidy through January as Democrats have proposed. 

Department of Workforce Development Secretary Caleb Frostman said the state's system to process unemployment claims — which has been overwhelmed since the pandemic hit — would all but grind to a halt. 

"That would be a gigantic undertaking and absolutely would have impacts downstream," said Frostman, a former Democratic state senator. "It would absolutely require a ton of programming and a gargantuan amount of staff time to determine the (benefits)."

Frostman said staff would have to touch every claim to determine 70% of each unemployed workers' salary. 

Staffing within the workforce development agency has quadrupled in recent months in an effort to clear hundreds of thousands of unemployment claims but more than 100,000 people are still waiting for their claims to be processed. 

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Lawmakers and state officials knew more than a decade ago that the state's system to process unemployment claims needed an upgrade but significant changes weren't made. In 2014, an audit showed that at one point up to 80% of calls to the department for help were blocked because of the system's limits during times of higher unemployment.

The warning also came nearly a decade after state officials began and abandoned a project to replace the department's 1970s-era system used to track unemployment insurance claims and appeals — an effort that would take years and cost tens of millions of dollars. 

Frostman said the programming needed to make a change like the one U.S. Senate Republicans are proposing wouldn't be easy. 

"It would be really disruptive and a huge challenge for an already stressed situation as we deal with an unprecedented economic crisis," Frostman said. 

Wisconsin’s congressional delegation has been split on extending the $600 unemployment payments, with Democrats for it and Republicans against it.

In May, the state’s House Democrats voted for legislation that would extend the benefit until January. Wisconsin Republicans voted against it and the measure has stalled in the Senate.

Democratic Sen. Tammy Baldwin supports the Democratic House bill, which calls for a $3 trillion in relief.

Republican Sen. Ron Johnson told Wisconsin Public Radio earlier this month he opposed spending more money to stimulate the economy and extending the $600 in additional benefits.

Johnson called the bonus a "perverse disincentive to return to the workplace, which is what we need people to do, as much as possible, as safely as possible."

He told WPR he believes unemployment insurance should cover no more than two-thirds of people's average weekly earnings. In Wisconsin, weekly unemployment benefits without the $600 federal add-on are capped at $370.

Republican Rep. Glenn Grothman in June said he didn’t want to keep the additional $600 a week in benefits going.

“We can’t extend that,” he said then. “A, we’re broke and, B, it’s not hard to find employers who already can’t find people to work because they can’t pay them more than unemployment.”

Republican Reps. Bryan Steil, Mike Gallagher and Tom Tiffany expressed similar sentiments, saying the additional $600 per week was making it hard to get the economy restarted.

RELATED:Department of Labor says Wisconsinites on disability can get Pandemic Unemployment Assistance

State Senate Majority Leader Scott Fitzgerald, who is running for Congress, said in June he was disinclined to support extending the $600 in unemployment benefits, but added, “never say never.”

Democrats said it was essential to get people more help.

"We need to make sure people are not getting behind on rent or mortgage or all the other expenses that will have a negative ripple effect through the economy," Democratic Rep. Mark Pocan said in June as he argued for continuing the unemployment benefits.

Contact Molly Beck and Patrick Marley at molly.beck@jrn.com and @patrick.marley@jrn.com.