Commentary Type

The Administration's Fiscal 2007 Budget Request for Unemployment Compensation

Testimony before the Committee on House Ways and Means, Subcommittee on Human Resources


Unemployment Insurance (UI) is the centerpiece of our efforts to assist workers who lose their jobs at no fault of their own. 

In addition to providing income support to workers facing significant financial burden, recent research finds that the existence of an adequate unemployment insurance program can reduce worker anxiety and encourage more labor-market flexibility, both of which are required in order to meet the challenges of technological change and globalization.

The administration’s budget request focuses on recovering UI payments to workers made in error. Although it is important to address waste, fraud and abuse in the program, the administration’s proposals may actually make it harder for eligible workers to receive the assistance they so desperately need. At the same time, the administration’s proposal to eliminate funding for employment services and create a new block grant, results in a decline of resources, thereby making it more difficult for states to monitor compliance with UI eligibility requirements.

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