Senators urge full funding of Unemployment Insurance administration

A group of U.S. senators are urging the Senate Appropriations Subcommittee on Labor, HHS, Education, and Related Agencies to fully fund the Unemployment Insurance (UI) administration.

The senators said that without robust funding, state workforce agencies will struggle to provide UI benefits for jobless workers, protect against fraud, and make long-term administrative improvements to prepare for future crises.

Following the COVID-19 pandemic, states faced significant challenges in distributing unemployment insurance, highlighting the need to increase funding for this program.

“When the COVID-19 pandemic hit in March 2020, state workforce agencies were completely overwhelmed with an unprecedented number of UI claims … Part of the reason states were so unprepared to deal with this surge of claims was decades of underinvestment in UI administration. Because Congress has consistently failed to appropriate sufficient administrative funding for the program, the Department of Labor (DOL) is forced to allocate funding to states using outdated cost assumptions that don’t reflect the actual cost of administering UI, leaving state workforce agencies operating on shoestring budgets,” the senators wrote in a letter to the subcommittee.

The effort was led by U.S. Sens. Ron Wyden (D-OR), Michael Bennet (D-CO), and Jack Reed (D-RI). The letter was also signed by U.S. Sens. Tina Smith (D-MN) Tom Carper (D-DE), Elizabeth Warren (D-MA), Edward Markey (D-MA), Dick Durbin (D-IL), Ben Cardin (D-MD), Catherine Cortez Masto (D-NV), Peter Welch (D-VT), Alex Padilla (D-CA), Mazie Hirono (D-HI), Bob Casey (D-PA), Jeff Merkley (D-OR), Jacky Rosen (D-NV), Brian Schatz (D-HI), Bernie Sanders (I-VT), Chris Van Hollen (D-MD), Sherrod Brown (D-OH), and Laphonza Butler (D-CA).

“We request that you appropriate at least $3,422,274,000 for grants to states for the administration of state UI laws and at least $48,000,000 for national activities necessary to support UI administration in FY2025,” they wrote. “The increased funding for grants to states would allow DOL to update its outdated funding assumptions and provide states with sufficient funds to ensure the UI program can serve jobless workers as intended and take important steps to combat fraud.”

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