[SPRINGFIELD, IL] – To ensure that Illinois and other cash-strapped states are able to continue providing a critical lifeline to struggling families as they search for work, U.S. Senator Dick Durbin (D-IL) announced today that he will introduce legislation in the Senate this week to revamp the unemployment insurance program and ensure its long-term solvency. The Unemployment Insurance Solvency Act will solidify the program’s finances while giving states greater flexibility in managing their costs without raising the taxes employers pay to Washington. A similar proposal is expected to be included in the budget that President Obama will submit to Congress tomorrow.
proposal will return the critical but overextended unemployment
insurance program to solvency over several years, without raising the
taxes on employers. It will allow states to continue providing a safety
net to workers who have lost their jobs through no fault of their own,
while maximizing the chances that federal taxpayers will be repaid for
all of the temporary assistance the federal government provided to
states for unemployment insurance during the recession,” Durbin said.
we plan for the next fiscal year, we must focus on targeted investments
to help America build critical infrastructure, educate the workers of
today and tomorrow, and innovate to create the jobs of the 21st
century. This will help our economy grow more quickly, so the
unemployed can get back to work as soon as possible. We also have a $14
trillion debt that we have to responsibly address, and we can do that
by investing smartly in important programs that work, such as
rates have fallen, there are still currently more than 620,000
unemployed people in Illinois. At a time when such a huge number of
people are temporarily relying on unemployment insurance, the trust
funds from which those payments are made can become depleted. Under
current law, states are required to immediately pay interest on any
money they need to borrow from the federal government to make payments
to the jobless if their trust funds run dry. States must then raise
unemployment taxes on local employers to quickly make up for any
Durbin’s proposal would waive the interest
payments that Illinois and other states would otherwise be required to
pay for the next two years, and it would also waive the requirement
that Illinois immediately charge companies higher taxes. This will
allow states to focus on making the payments it owes to its vendors and
creditors, and employers to focus on hiring new workers.
Beginning in 2014, once the economy has better recovered, Illinois and
other states will have greater flexibility in figuring out how to
replenish its trust fund and prepare for the next downturn. The
governor’s office estimates that this proposal will save the state more
than $200 million over the next two years and save Illinois employers
more than $300 million.
“This is the kind of
common sense, fiscally responsible proposal that America must have more
of, and that will create more jobs with less debt. I welcome the
President’s proposal, and will fight to see it become law,” Durbin said.
Leading economists, including the nonpartisan Congressional Budget
Office, rank providing unemployment insurance as one of the most
stimulative things the federal government can do during an economic
downturn, because nearly every dollar provided is immediately plowed
back into the economy. That spending helps drive up demand for what
private companies sell, which encourages companies to hire more workers
to meet that demand.