Both parties have agreed for years that the unemployment insurance (UI) system needs reform. The bipartisan, blue-ribbon Norwood Commission in the mid-1990s called for changes to strengthen the permanent Extended Benefits program, improve the UI system’s solvency, and increase access for low-wage and other disadvantaged workers. Policymakers took a step toward implementing this third goal by including some UI modernization reforms in the 2009 Recovery Act.
But the ongoing House-Senate talks over continuing the temporary federal emergency UI program are the wrong place to negotiate comprehensive changes to a permanent program that has supported jobless workers and the economy for over 75 years.
Congress should enact a quick, clean extension of temporary federal UI benefits, then pursue UI reform through the normal legislative process, giving it the full debate and discussion it deserves.
The President’s budget (see our statement) takes an important step towards UI reform by proposing changes to bolster the system’s long-term fiscal soundness and modernize its financing. The budget also boosts funding for states to strengthen their reemployment and training services to help the unemployed get back on their feet.
Unfortunately, in their recent proposals to extend federal emergency UI, congressional Republicans have sought only those “reforms” that would deny benefits to unemployed workers and allow states to divert UI funds for purposes other than paying benefits.
UI has played an important role in creating jobs and reducing poverty in the last few years. Congress should consider a range of UI proposals — those from the Norwood Commission, the President, and House Republicans — but should keep in mind that reform should strengthen the UI system, not weaken it.