NCSL Letter on Extension of Interest Free Borrowing

November 16, 2010 

The Honorable Nancy Pelosi Speaker of the House
U.S. House of Representatives
Washington DC, 20515          
     

The Honorable John Boehner
House Minority Leader
U.S. House of Representatives Washington, DC 20515
 

The Honorable Harry Reid
Senate Majority Leader
United States Senate
Washington, DC 20510

 
The Honorable Mitch McConnell Senate Minority Leader
United States Senate
Washington, DC 20510

 

RE: Request for extension of waiver on interest from loans from the Federal Unemployment Insurance Trust Fund 

Dear Speaker Pelosi, Representative Boehner, Senator Reid, and Senator McConnell:

The National Conference of State Legislatures strongly supports an immediate extension of the waiver on interest from loans from the Federal Unemployment Insurance Trust Fund.  The current waiver of interest payments to states with outstanding federal unemployment loans, a provision in the American Recover and Reinvestment Act, will expire on December 31, 2010. 

If the current waiver is not extended, already cash strapped states will be pressed further to come up with funds to pay the interest on the loans, slowing an economic recovery. More than half of the states have already borrowed some $40 billion from the federal account to cover benefits during the current economic cycle, and projections from the U.S. Department of Labor demonstrate that up to 40 states are expected to be borrowing before the economy recovers. 

The National Conference of State Legislatures urges Congress to immediately extend the deadline on the waiver to states that borrow so that they may continue to pay benefits to unemployed workers and to help states deal with significant budget challenges.

Sincerely, 

Representative Lana Gordon, Kansas
Co-Chair, NCSL Standing Committee on Labor and Economic Development

Representative Brent Yonts, Kentucky
Co-Chair, NCSL Standing Committee on Labor and Economic Development

 

cc: Chairman Baucus, Ranking Member Grassley, Chairman Levin and Ranking Member Camp