We call on Congress to take action before the end of 2020 to ensure that state and territorial unemployment programs will continue to meet the needs of the millions of Americans who have lost their jobs during COVID-19.
December 11, 2020
The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
Washington, DC 20515
The Honorable Mitch McConnell
Majority Leader
United States Senate
Washington, DC 20510
The Honorable Kevin McCarthy
Minority Leader
U.S. House of Representatives
Washington, DC 20515
The Honorable Chuck Schumer
Democratic Leader
United States Senate
Washington, DC 20510
Dear Speaker Pelosi, Majority Leader McConnell, Republican Leader McCarthy, and Democratic Leader Schumer:
America’s unemployment crisis is having a significant economic and human effect on citizens and workers. Americans unable to return to work face a precipitous decline in income and are struggling to survive.
On behalf of America’s Governors and employers, we call on Congress to take action before the end of 2020 to ensure that state and territorial unemployment programs will continue to meet the needs of the millions of Americans who have lost their jobs during COVID-19.
Federal unemployment programs established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act must be extended before December 31, 2020. Unemployed individuals have relied upon extended, expanded, and enhanced unemployment insurance programs to provide for themselves and their families. With unemployment rising once again due to spiking COVID-19 infections, the need for these programs to continue and resume are even more pronounced.
States, territories, and employers also need Congress to immediately address the dramatic depletion of state unemployment trust funds that, without federal intervention, would lead to tax increases on businesses across the U.S. According to data from the U.S. Department of Treasury, 21 states and territories have borrowed more than $44 billion from the federal government to cover shortfalls in their unemployment trust funds. Fifteen states have used CARES Act funding as a stopgap to cover trust fund shortfalls.
According to the Tax Foundation, “As more firms lay off employees and unemployment increases, states’ unemployment insurance taxes will rise on businesses that can least afford to pay.” These statutory and regulatory mandated increases would place additional burdens on businesses and nonprofits struggling to survive while jeopardizing economic recovery.
State and territorial UI trust fund depletion is a national fiscal crisis for states and employers. However, this is not the only threat to economic recovery. Nonprofits remain burdened by requirements that they pay half of the cost of unemployment claims for individuals they no longer have the financial ability to employ. States and territories continue to establish new federal UI programs with federal administrative funding and flexibility that will soon disappear.
We urge Congress to address these threats to economic recovery by:
- ● Extending Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, and Federal Pandemic Unemployment Compensation;
● Replenishing depleted state and territorial unemployment trust funds with federal grants to states, as these federal resources would ensure states and territories can continue payments to unemployed residents during the COVID-19 pandemic while preventing tax increases on employers; - ● Providing additional administrative funding to address substantial, necessary investments states and territories are making to increase technological and staffing capacity; and
- ● Increasing grants for states and territories to reimburse section 501(c)(3) organizations, government agencies, and Indian tribes for 100 percent of the amount they pay for unemployment benefits.
Governors and members of the employer community stand ready to work with you to ensure these requests are addressed before the end of 2020. Thank you for your continued efforts to safeguard America’s health and economic recovery and to ensure that our fellow Americans who have lost their jobs during the pandemic continue to receive the assistance they need.
Sincerely,
The National Governors Association
The U.S. Chamber of Commerce
cc:
Senator Chuck Grassley, Chairman, Senate Committee on Finance
Senator Ron Wyden, Ranking Member, Senate Committee on Finance
Representative Richard Neal, Chairman, House Committee on Ways & Means
Representative Kevin Brady, Ranking Member, House Committee on Ways & Means
