Democrats Push White House to Prioritize Unemployment Insurance Reform in American Family Plan
Unemployment insurance has not been updated for decades
Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., Joint Economic Committee Chair Don Beyer, D-Va., and 36 of their colleagues today urged President Biden to prioritize unemployment insurance reform in the upcoming American Family Plan.
The letter was also signed by Senators Michael Bennet, D-Colo., Jack Reed, D-R.I., Ben Cardin, D-Md., Alex Padilla, D-Calif., Sherrod Brown, D-Ohio, Bernie Sanders, I-Vt., Richard Blumenthal, D-Conn., Tammy Baldwin, D-Wis., Mazie Hirono, D-Hawaii, and Chris Van Hollen, as well as Representatives Suzan DelBene, D-Wash., Dwight Evans, D-Pa., Alan Lowenthal, D-Calif., James Langevin, D-R.I., Emanuel Cleaver, D-Mo., Joe Neguse, D-Colo., Jared Huffman, D-Calif., Bill Foster, D-Ill., Earl Blumenauer, D-Ore., Marilyn Strickland, D-Wash., Gerry Connolly, D-Va., Ed Perlmutter, D-Colo., Jim Cooper, D-Tenn., Jimmy Panetta, D-Calif., Adam Schiff, D-Calif., Suzanne Bonamici, D-Ore., Zoe Lofgren, D-Calif., Anthony Brown, D-Md., Tom Malinowski, D-N.J., Peter DeFazio, D-Ore., Eleanor Holmes Norton, D-D.C., Scott Peters, D-Calif., Derek Kilmer, D-Wash., Lisa Blunt Rochester, D-Del., Mike Quigley, D-Ill., and Kim Schrier, D-Wash.
In a letter to President Biden, the members wrote, “The COVID-19 pandemic has revealed many cracks in our country’s unemployment insurance (UI) system. The problems go far beyond the administrative and technological challenges states have faced in paying out benefits. The system also fails to respond to economic downturns, to reach enough workers, or to provide adequate benefits. Workers of color are disproportionately affected by these failures. We urge you to include substantial and permanent UI reform in your Build Back Better plan so that UI will meet the needs of all workers who lose their jobs through no fault of their own.”
Dear President Biden:
The COVID-19 pandemic has revealed many cracks in our country’s unemployment insurance (UI) system. The problems go far beyond the administrative and technological challenges states have faced in paying out benefits. The system also fails to respond to economic downturns, to reach enough workers, or to provide adequate benefits. Workers of color are disproportionately affected by these failures. We urge you to include substantial and permanent UI reform in your Build Back Better plan so that UI will meet the needs of all workers who lose their jobs through no fault of their own.
First, benefit levels and duration must be increased to protect unemployed workers from financial devastation. In many states, UI benefits only replace around 40 percent of a worker’s prior wages, which is insufficient to provide financial security, especially for low-income workers. States slashed benefits after the Great Recession, and we have already seen several states make similar moves toward further cuts in recent weeks. We must implement federal benefit standards to prevent states from cutting benefits again.
Second, UI must reach more workers. In March 2020, Congress enacted the Pandemic Unemployment Assistance (PUA) program to support workers not covered by UI during the pandemic. Over 16 million workers have received PUA over the course of the pandemic. As of March 27, around 40 percent of the total unemployment claims were from PUA, making it clear that without PUA, the UI system is not reaching all of the workers that it should.
Finally, the permanent-law Extended Benefits (EB) program must be reformed to better respond to economic downturns. EB is designed to provide additional weeks of benefits as unemployment rises, but the triggers are not as responsive to economic changes as they should be, nor do they provide sufficient weeks of benefits during recessions. As a result, Congress has had to pass legislation providing additional weeks of benefits during the last two recessions, leaving workers’ financial security contingent on arbitrary deadlines and Congressional action. A stronger EB program with more effective triggers would provide future unemployed workers with more certainty and better support.
The CARES Act’s emergency programs must be extended to support jobless workers for the duration of the current economic downturn, but we must also fix the underlying problems facing our UI system so that it can provide economic security for all workers. We strongly encourage you to include comprehensive UI reform as part of your Build Back Better plan.
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