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Highlights

GAO assessed the financial status of states' unemployment insurance systems, focusing on: (1) trends in trust fund reserve balances and borrowing; (2) the possible effects of future recessions on reserve balances and borrowing needs; and (3) the effects of recent federal policy changes on the systems' financial conditions and benefit eligibility.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
Congress may wish to establish a standard for the level of reserves to be maintained in state unemployment insurance trust funds.
Closed - Implemented
Congress established an Advisory Council on Unemployment Compensation to evaluate the entire unemployment insurance program.
Because current policy regarding federal lending to state trust funds has had the effect of encouraging an erosion of benefits to many workers, Congress may wish to craft any measure to improve reserve adequacy in a manner that does not further erode benefit eligibility.
Closed - Implemented
Congress established an Advisory Council on Unemployment Compensation to evaluate the entire unemployment insurance program.
Congress may wish to consider program changes that would help offset the fiscal burden that falls on states with chronically high unemployment rates.
Closed - Implemented
Congress established an Advisory Council on Unemployment Compensation to evaluate the entire unemployment insurance program.

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