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South Dakota Governor Rejects Trump's Plan For Expanded Unemployment Benefits

MARY LOUISE KELLY, HOST:

President Trump's plan to boost unemployment benefits by $300 a week is getting a fairly cool reception around the country. A $600 a week benefit expired last month. And in the 10 days since Trump made the offer, only a handful of states say they will take him up on it. Treasury Secretary Steven Mnuchin told CNBC today that the president's plan is starting to catch on.

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STEVE MNUCHIN: We have five states that have already been approved. We have another four states that have submitted and about another 10 states that are in the process.

KELLY: Well, that leaves more than half of all states still wary of the president's plan. As NPR's Scott Horsley reports, that is threatening to leave a big dent in the spending power of tens of millions of jobless workers.

SCOTT HORSLEY, BYLINE: South Dakota Governor Kristi Noem was one of the first to reject the president's offer, saying, in effect, thanks but no thanks. Noem, who's a Trump ally, says her state doesn't need the extra money for jobless benefits. Here she is on Fox News.

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KRISTI NOEM: We're doing very well. Our infection rates are low. Our job losses are low. Our economy is doing better than virtually any other state.

HORSLEY: South Dakota does have the nation's ninth-lowest unemployment rate, but at 7.2%, it's still more than double what it was a year ago. And Jennifer Stensaas of Feeding South Dakota says the food pantries' weekly giveaways are still drawing twice as many hungry people, many of them for the first time.

JENNIFER STENSAAS: People that have found themselves just in a place they've never been before and making some pretty tough choices. They've been furloughed from work. They've been laid off for a period of time. A lot of businesses just closed.

HORSLEY: With tens of thousands of South Dakotans still out of work, Democratic State Senator Reynold Nesiba is mystified by the governor's decision to turn down the extra benefits Trump is offering. Nesiba, who teaches economics at Augustana University, says that's $10 million a week that South Dakotans could have used to help buy groceries or school supplies or pay the rent.

REYNOLD NESIBA: This isn't just about the people that are unemployed. By refusing to take this money, she is hurting South Dakota businesses and South Dakota landlords and South Dakota bankers.

HORSLEY: Nesiba worries the economic rebound the governor is boasting about has been bankrolled in part by billions of dollars in federal relief, aid that's now being short-circuited. Federal aid has been exhausted not only in South Dakota but around the country, and efforts to craft a comprehensive new aid package in Congress have stalled. Economist Ernie Tedeschi of Evercore ISI says with the expiration of emergency jobless benefits last month, tens of millions of unemployed workers now have a lot less money in their pockets.

ERNIE TEDESCHI: They woke up on August 1 facing a 50% to 75% pay cut, and that's going to mean that they have to make some pretty devastating cuts.

HORSLEY: Tedeschi says nationwide, benefits have shrunk by about $15 billion a week, and the resulting drop in spending power is likely to mean lower retail sales and slower job growth. Retail giant Walmart said today government relief payments did give a significant boost to the company's sales during the last three months. But as the stimulus money dried up, sales cooled. CEO Doug McMillon says there's a lot of uncertainty now, especially for smaller businesses.

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DOUG MCMILLON: This economy and this country are driven so much by small and medium-sized businesses that we want to see something happen there that'll help support those folks.

HORSLEY: As policymakers in Washington argue over a new round of spending, 800 to 1,000 South Dakota families keep showing up each Tuesday and Thursday at the food pantry in Sioux Falls. The food bank's Jennifer Stensaas says they're in it for the long haul. Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.