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Labor and Economic Development Committee

May 7, 2008

The Honorable Nancy Pelosi Speaker of the House United States House of Representatives H-232, U.S. Capitol Washington, D.C.  20515

The Honorable John Boehner Minority Leader United States House of Representatives H-204, U.S. Capitol Washington, D.C.  20515

RE: Extension of Unemployment Compensation Benefits

Dear Speaker Pelosi and Representative Boehner:

We are writing to express the support of the National Conference of State Legislatures (NCSL) for a temporary extension of unemployment compensation benefits, with adequate funds appropriated for state administrative functions.

Since its inception during the Great Depression, the unemployment compensation system has provided a temporary income support to workers who lose their jobs.  The counter-cyclical partnership between states and the federal government was designed to accumulate and hold significant funds in trust accounts during good economic times and pay out benefits during bad economic times and simultaneously stimulate a stagnant economy. 

State legislators are concerned that the percentage of unemployed workers is rising and that state unemployment insurance agencies have experienced reduced funding appropriated by Congress in recent years.  Nationally, unemployment insurance claims levels and the exhaustion of benefits rate have been on the rise and states are struggling to respond with less federal administrative funding than previous years, especially those states with high unemployment rates.  

In the 2008 legislative session, at least one state had to appropriate general funds to support the administration of the program. These funds should have been appropriated by Congress as part of the FY 2008 appropriations legislation and/or through Reed Act distributions to meet the needs of the program. Economic assumptions did not anticipate the increases in unemployment claims that the Congressional Budget Office now projects as a result of the current economic slowdown.   

During the current Congress, several bills were introduced (e.g., S 1871, HR 2233, HR 3920, HR 5749) to extend benefits or modernize state unemployment systems. We support efforts by Congress to continue on the path to assist jobless individuals during this time of economic downturn. However, it is imperative that Congress continue to collaborate with states to strengthen their unemployment systems and enact unemployment insurance legislation that would provide adequate resources for administering the program and supplement, not supplant, current state efforts. 

We appreciate your leadership and look forward to working with you on this issue.  Should you or your staff have any questions about NCSL’s position on this matter, please contact Diana Hinton Noel at 202-624-7779.

Sincerely,

Representative Phillip Frye, North Carolina Chair, NCSL Labor and Economic Development Committee

Representative Steve Conway, Washington Immediate Past Chair, NCSL Labor and Economic Development Committee

CC.  Honorable Members of the United States Senate
       Honorable Members of the United States House of Representatives
        

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 Labor and Economic Development Committee