TRUMP ADMINISTRATION BUDGET CALLS FOR UNEMPLOYMENT INSURANCE CHANGES

By February 13, 2018Blog

The Trump Administration has released their blue print for changes to the federal budget. Among the many things on this political wish list are changes to the nation’s unemployment insurance system. For example, the Administration hopes to expand parental leave using the federal unemployment insurance system. The details are, of course, thin right now because this is just a political document but as Congress begins to dig into government spending in the coming months we may see real changes to the unemployment insurance system.

Below are the sections concerning unemployment insurance and the Administration’s summarized proposed changes.

Modernizing the Unemployment Safety Net to Emphasize Work Reduces Waste, Fraud, and Abuse While Getting Claimants Back to Work More Quickly

The Budget expands Reemployment Services and Eligibility Assessments, an evidence-based activity that saves an average of $536 per claimant in unemployment insurance (UI) benefit costs by reducing improper payments and getting claimants back to work more quickly and at higher wages. The Budget proposes to create a permanent program that would allow each State to provide these services to one-half of its UI claimants as well as all of its transitioning service members. The Budget also reduces waste, fraud, and abuse in the UI program with a package of program integrity proposals. These proposals would require States to use the tools already at their disposal for combating improper payments while expanding their authority to spend certain UI program funds on activities that reduce waste, fraud, and abuse in the system.

Strengthens the Unemployment Safety Net

States are responsible for Unemployment Insurance Reserves by State funding the benefits they Average high cost multiple provide under the State administered UI program. In order to avoid raising taxes on employers in the middle of a recession, States should build balances that would allow them to cover benefits when unemployment spikes. Despite years of recovery since the Great Recession, many States’ UI accounts are still not adequately financed—as of September 30, 2017, only 24 States had sufficient reserves to weather another recession. The Budget proposes to strengthen the incentive for States to prepare for the next recession and adequately fund their UI systems by reducing Federal tax credits in States with particularly low reserve balances.

Supporting Working Families

Provides for Paid Family Leave for New Parents. The Budget invests in a better future for Americans with a fully paid-for proposal to provide six weeks of paid family leave to new mothers and fathers, including adoptive parents, so all families can afford to take time to recover from childbirth and bond with a new child. Using the UI system as a base, the proposal would allow States to establish paid parental leave programs in a way that is most appropriate for their workforce and economy. The Administration looks forward to working with the Congress to advance policies that would make paid parental leave a reality for families across the Nation.

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