Unemployment Insurance:

Trust Fund Reserves Inadequate to Meet Recession Needs

HRD-90-124: Published: May 31, 1990. Publicly Released: May 31, 1990.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO assessed the potential impact of a severe recession on the financial status of the Unemployment Insurance (UI) system.

GAO found that: (1) the UI system appears to be inadequate to handle a severe recession; (2) the Department of Labor's (DOL) model indicates that a severe recession in 1991 would result in 22 states having to borrow an estimated $17.4 billion between 1991 and 1995 to sustain their programs; (3) such a situation could result in such state actions as reduced UI eligibility and increased payroll taxes; (4) an increased taxable wage base would be a step toward a forward-funded UI program, but would not result in immediate restoration of state funds; (5) under the DOL model, states would need to borrow $3 billion less from the federal loan account and would owe $4.2 billion less after 5 years, if the taxable wage base were increased; and (6) the DOL model indicates that an increase in the taxable wage base coupled with reduced eligibility would produce similar but less dramatic results.

Oct 10, 2018

Oct 9, 2018

Sep 5, 2018

Jul 16, 2018

May 9, 2018

Feb 8, 2018

Dec 21, 2017

Dec 7, 2017

Nov 20, 2017

Looking for more? Browse all our products here