Tuesday, May 31, 2011

New Bill Would Give States More Flexibility in Using Federal Unemployment Funds

On May 11, the House Ways and Means Committee approved H.R. 1745, the “Jobs, Opportunity, Benefits, and Services Act of 2011” (JOBS Act). The bill would give states more flexibility in how they use their remaining $31 billion in federal unemployment funds for this year. Under current law, the money must be used to pay unemployment benefits. Under the JOBS Act, states could use the money for: (1) regular or extended unemployment benefits; (2) preventing unemployment tax hikes; (3) paying interest or principal on federal unemployment loans; or (4) promoting job creation and hiring through the use of reemployment services, including wage subsidies.

Some opponents of the bill feel that the legislation could damage the economy recovery if less unemployment benefits are provided to the long-term unemployed. A few states have already enacted legislation that reduces the maximum time period in which claimants may receive benefits.

The bill will be sent to the House floor for consideration. A parallel bill has been introduced in the Senate (S. 904).

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