FGA Warns States of the Biden Administration’s Latest Attempt to Regulate State Unemployment Programs

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“Federal lawmakers radically expanded unemployment during the pandemic forcing many states to adapt their unemployment programs and overextend their trust funds,” said Alli Fick, Deputy Research Director at FGA.

A Foundation for Government Accountability (FGA) report warns of restrictions on states that choose to accept and use federal funding for “fiscal recovery” from the COVID-19 pandemic after the effective date of the federal rule.

Starting April 1, 2022, states that choose to accept federal funding will face new, federally-imposed barriers that aim to prevent lawmakers from reforming their unemployment programs until December 2024. These restrictions attempt to limit the ability of state officials to reduce either the amount or duration of unemployment benefits for individuals on the program.

According to the U.S. Department of the Treasury, states will not be subject to these new restrictions if they appropriate the federal funds before the rule takes effect on April 1, 2022. States that choose to accept federal funding after the April 1 deadline will, however, be limited in their ability to reform their unemployment programs.

“Federal lawmakers radically expanded unemployment during the pandemic forcing many states to adapt their unemployment programs and overextend their trust funds,” said Alli Fick, Deputy Research Director at FGA. “Policymakers that wish to use federal resources to recover from the pandemic should ensure that appropriations are adopted prior to April 1 and continue to reform their unemployment programs.”

States that choose to accept federal funding after the April 1 deadline will, however, be limited in their ability to reform their unemployment programs.

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The Foundation for Government Accountability (FGA) is a non-profit, multi-state think tank that promotes public policy solutions to create opportunities for every American to experience the American Dream. To learn more, visit TheFGA.org.

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