With a surplus $2.3 billion in the Unemployment Insurance Trust Fund, increasing emergency funds from $100 million to $200 million to pay for the administration of unemployment benefits should be a simple procedure. But in these new-federalism times, money that states send to Washington isn’t necessarily returned when needed.
Under the U.S. unemployment system, states pay out benefits through employer taxes they collect. Washington, which takes a share of those taxes, is supposed to cover the administrative costs of the system, such as office rent and salaries of clerks. Last year, the federal government’s share was $5 billion, of which it spent $3 billion on the system.
Tales from throughout the country of long lines at understaffed unemployment offices, of the recently jobless made more frustrated by confusing government regulations, and of the truly needy having to wait a couple of months for their first unemployment checks strongly suggest that the system needs help. Congressional Democrats want to ship an immediate $200 million to the states; the Bush administration has been loathe to propose more than $100 million, which would compensate states at no more than 75 percent of the current cost.
More than 500,000 Americans filed unemployment claims during a week in February, according to the Labor Department, up about 160,000 from last year at that time. The national unemployment average is at 6.5 percent and rising; Maine’s rate is closing in on 9 percent. Even if the recession continues for only a couple more months, unemployment offices will need additional staffing and help to get through this difficult period.
Under Gramm-Rudman, funds over those budgeted may be released if Congress determines that they are necessary to meet an emergency. The Unemployment Insurance Trust Fund certainly should qualify during this economic slump, and the federal government should waste no time sending the money to the states.