Comments on H.R. 3896, the Unemployment Compensation Reform Act of 1990
T-HRD-90-15: Published: Feb 22, 1990. Publicly Released: Feb 22, 1990.
- Full Report:
GAO discussed proposed legislation affecting the unemployment insurance (UI) system, which provides income maintenance assistance to the unemployed, funded by federal and state employer taxes. GAO noted that: (1) state UI trust fund reserves appear to be inadequate to handle a recession; (2) increased reliance on loans and general fund advances has eroded the forward-funding principle under which UI has operated for over 50 years; (3) an increase in the taxable wage base, as proposed, would restore the forward-funding nature of the program, increase revenue for the federal UI trust fund accounts, and slightly increase state reserves; and (4) the legislation would provide the states with $3 billion annually for administrative costs, to help reduce the effects of any recession.