Order Code RL34460
Current Law and Selected Proposals Extending
Unemployment Compensation
April 24, 2008
Julie M. Whittaker
Specialist in Income Security
Domestic Social Policy Division

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Current Law and Selected Proposals
Extending Unemployment Compensation
Summary
This report examines recent proposals that would create a new temporary
extension of unemployment compensation. The recent proposals to temporarily
extend the duration of Unemployment Compensation (UC) include the proposal in
the Senate Committee on Finance Report of the Economic Stimulus Act of 2008
dated January 30, 2008, H.R. 4934, S. 2544, H.R. 5688, and H.R. 5749.
Only sections in the proposals that relate to the extension of unemployment
benefits are detailed. Thus, only portions of H.R. 4934 (Title I-Emergency
Unemployment Compensation and Title II-Increased Unemployment Benefits) and
the Senate Committee on Finance proposal (Title I-Temporary Extended
Unemployment Compensation) that directly relate to extending the duration of
unemployment benefits are included. Matters concerning fraud and overpayments
are not discussed.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Current Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Extended Benefit (EB) Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Financing Unemployment Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Extending Unemployment Compensation Proposals . . . . . . . . . . . . . . . . . . . . . . . 3
Temporary Extension of Unemployment Benefits . . . . . . . . . . . . . . . . . . . . . 3
How the Benefit Triggers On . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
List of Tables
Table 1: Current Law and Selected Comparisons of Proposals
Temporarily Extending Unemployment Benefits . . . . . . . . . . . . . . . . . . . . . 5

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Current Law and Selected Proposals
Extending Unemployment Compensation
Introduction
This report examines recent proposals that would create a new temporary
extension of unemployment compensation. The recent proposals to temporarily
extend the duration of Unemployment Compensation (UC) include the proposal in
the Senate Committee on Finance Report of the Economic Stimulus Act of 2008
dated January 30, 2008,1 H.R. 4934, S. 2544, H.R. 5688, and H.R. 5749.2
Only sections in the proposals that relate to the extension of unemployment
benefits are detailed. Thus, only portions of H.R. 4934 (Title I- Emergency
Unemployment Compensation and Title II-Increased Unemployment Benefits) and
the Senate Committee on Finance proposal (Title I-Temporary Extended
Unemployment Compensation) that directly relate to extending the duration of
unemployment benefits are included. Matters concerning fraud and overpayments
are not discussed.
Current Law
The Unemployment Compensation (UC) program, funded by both federal and
state payroll taxes, pays benefits to covered workers who become involuntarily
unemployed for economic reasons and meet state-established eligibility rules. Federal
administration of UC is under the purview of the U.S. Department of Labor (DOL).
Federal law sets broad rules that the 53 state programs must follow.3
1 This proposal was downloaded on April 8, 2008, from [http://www.senate.gov/~finance/
sitepages/leg/LEG%202008/FINAL%20Original%20Bill.pdf].
2 For a detailed summary on how Congress has acted to extend unemployment benefits
during economic recessions, see CRS Report RL34340, Extending Unemployment
Compensation Benefits During Recessions, by Julie M. Whittaker.
3 For details on the Unemployment Compensation (UC) program and other unemployment
benefits see CRS Report RL33362, Unemployment Insurance: Available Unemployment
Benefits and Legislative Activity, by Julie M. Whittaker.

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CRS-2
The Extended Benefit (EB) Program
The EB program, established by P.L. 91-373 (26 U.S.C. 3304), may extend UC
benefits at the state level if certain economic conditions exist within the state.
Although the EB program is not currently active in any state, it — like the UC
program — is permanently authorized. The EB program is triggered when a state’s
insured unemployment rate (IUR) or total unemployment rate (TUR) reaches certain
levels.4 All states must pay up to 13 weeks of EB if the IUR for the previous 13
weeks is at least 5% and is 120% of the average rate for the same 13-week period in
each of the previous 2 years. There are two other thresholds that states may choose.
(States may choose one, both, or neither option). Under these options, the state
would provide the following:
! Option 1: An additional 13 weeks of benefits if the state’s IUR is at
least 6%, regardless of previous years’ averages.
! Option 2: An additional 13 weeks of benefits if the state’s TUR is at
least 6.5% and is at least 110% of the state’s average TUR for the
same 13-weeks in either of the previous two years; or an additional
20 weeks of benefits if the state’s TUR is at least 8% and is at least
110% of the state’s average TUR for the same 13 weeks in either of
the previous two years.
Beyond the regular UC benefit eligibility requirements, eligibility for EB
benefits requires that individuals must have 20 weeks of full-time insured
employment or its equivalent.
Financing Unemployment Benefits
UC benefits are financed through employer taxes. The federal taxes on
employers are under the authority of the Federal Unemployment Tax Act (FUTA),
and the state taxes are under the authority given by the State Unemployment Tax
Acts (SUTA). These taxes are deposited in the appropriate accounts within the U.S.
Treasury’s Unemployment Trust Fund (UTF).
4 The TUR is essentially a version of the seasonally adjusted unemployment rate published
by the Bureau of Labor Statistics. That is, the ratio of the total number of unemployed
persons divided by the total number of employed and unemployed persons. The IUR is the
ratio of all workers currently receiving regular UC benefits to the total UC-covered
workforce. The IUR is based on UC program data collected by the states and compiled by
the Employment and Training Administration. The IUR is substantially different from the
TUR because it excludes several important groups: self-employed workers, unpaid family
workers, workers in certain not-for-profit organizations, and several categories of workers.
In addition to those unemployed workers whose last jobs were in excluded employment, the
IUR excludes the following: those who have exhausted their UC benefits, new entrants or
reentrants to the labor force, disqualified workers whose unemployment resulted from their
own actions rather than from economic conditions, and eligible unemployed persons who
do not file for benefits.

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CRS-3
The federal tax pays for both federal and state administrative costs, the federal
share of the extended benefit (EB) program (50%), loans to insolvent state UC
accounts, and state employment services. The state tax pays for the regular UC
benefit and the state share of the EB program (50%).
Extending Unemployment
Compensation Proposals
Temporary Extension of Unemployment Benefits
In general, these proposals would entitle certain unemployed individuals to
temporary extended unemployment benefits that are not available under current law
and would expire in approximately one year. Table 1 provides a summary of each
of these proposals.
All proposals would require that workers had exhausted all rights to regular UC
benefits. All proposals have some type of “look-back” provision where workers who
had exhausted UC benefits (generally around one year previous to the proposal) may
be eligible for the temporary benefit. At the program’s termination, all workers who
were currently receiving the extended benefit would receive their full weeks of
entitlement; those workers who exhausted UC benefits after the termination would
not be eligible for the temporary extension.
The base level of benefit ranges from 13 weeks (the Senate Committee on
Finance proposal, H.R. 4934, H.R. 5749) to 20 weeks (S. 2544). An exception is
H.R. 5688, which requires states to select various state-level triggers and then meet
certain economic conditions.
All proposals, with the exception of H.R. 4934, have some type of mechanism
to declare certain states to be in a period of high unemployment based on certain
unemployment statistics. Workers in those high unemployment states would then be
eligible for an additional extension of unemployment benefits.

How the Benefit Triggers On
The Senate Committee on Finance proposal, S. 2544, and H.R. 5749 would all
create a national entitlement of additional unemployment benefits upon enactment.
H.R. 4934 would trigger a new national entitlement on the first day of the first month
where the change in unemployed persons as compared to the previous year exceeds
one million (this occurred in March 2008). H.R. 5688 would trigger solely on a state
basis as determined by certain unemployment statistics detailed in Table 1 (as of this
writing no state would qualify).

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CRS-4
Financing
Most proposals would finance the temporary extension of unemployment
benefits through the federal accounts within the UTF (100% federally funded). H.R.
5688 would fund 50% up to 100% of the additional benefits through the federal
accounts within the UTF. Table 1 details the conditions H.R. 5688 requires for its
funding level.

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CRS-5
Table 1: Current Law and Selected Comparisons of Proposals Temporarily Extending Unemployment Benefits
Senate Finance
Committee Report,
Current Law:
January 30, 2008,
H.R. 5749, Emergency
P.L. 91-373
Title II Temporary
H.R. 4934, Emergency
S. 2544, Emergency
H.R. 5688, Targeted
Extended
(26 U.S.C. 3304, note)
Extended
Unemployment
Unemployment
Assistance to Restore
Unemployment
Program
Extended Benefit (EB)
Unemployment
Compensation Act of
Compensation Act of
Growth in Employment
Compensation Act of
Feature
Program
Compensation
2008, Title I
2008, Title II
Throughout 2008 Act
2008
How proposal
The EB program may
Creates a new temporary
Creates a new temporary
Creates a new
Creates a new temporary
Creates a new temporary
extends
extend UC benefits at the
extended unemployment
extended unemployment
temporary extended
extended unemployment
extended unemployment
unemployment
state level if certain
benefit.
benefit if federal
unemployment benefit.
benefit if state economic
benefit.
benefits
economic conditions exist
Begins with enactment.
economic trigger is met.
Begins with
trigger is met.
Begins with enactment.
within the state. The EB
Ends the week ending on
Begins with enactment.
enactment.
Begins the week on or after
Ends the week ending on
program is permanently
or before December 31,
Ends the week ending on
Ends one year later.
April 1, 2008.
or before February 1,
authorized.
2008.
or before December 31,
No benefits past 18
Ends the week beginning
2009.
No benefits after the
2008.
months of enactment.
before March 31, 2009.
No benefits past the week
week of March 31, 2009.
of April 30, 2009.
No additional
unemployment benefits
to those not already
receiving the benefits on
December 31, 2008.
Eligibility
Exhausted regular UC
Exhausted regular UC
Exhausted regular UC
Exhausted regular UC
Exhausted regular UC
Exhausted regular UC
benefits. Benefit year must
benefits.
benefits.
benefits.
benefits.
benefits.
have ended on or after EB
program is triggered.
Benefit year ended on or
Benefit year ended on or
The bill would reach
Benefit year ended on or after
Benefit year ended on or
(Unemployed workers who
after February 1, 2007.
after March 1, 2007.
back to those workers
July 1, 2007.
after May 1, 2007.
had filed for UC benefits
(Unemployed workers
who had filed an initial
up to one year before the
who had filed for
regular UC claim on or
EB program “triggered on”
benefits after February 1,
after the 12-month
in the state and had
2006 and had exhausted
period before
exhausted regular UC
benefits may be eligible
enactment.
benefits may be eligible for
for temporary extended
EB.)
UC.)
Beyond requirements for
Beyond requirements for
regular UC benefits, the
regular UC benefits, the
beneficiary must have 20
beneficiary must have 20
weeks of full-time insured
weeks of full-time
employment or its
insured employment or
equivalent.
its equivalent.

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CRS-6
Senate Finance
Committee Report,
Current Law:
January 30, 2008,
H.R. 5749, Emergency
P.L. 91-373
Title II Temporary
H.R. 4934, Emergency
S. 2544, Emergency
H.R. 5688, Targeted
Extended
(26 U.S.C. 3304, note)
Extended
Unemployment
Unemployment
Assistance to Restore
Unemployment
Program
Extended Benefit (EB)
Unemployment
Compensation Act of
Compensation Act of
Growth in Employment
Compensation Act of
Feature
Program
Compensation
2008, Title I
2008, Title II
Throughout 2008 Act
2008
Potential
Up to 20 weeks for certain
Up to 26 weeks for
Up to 26 weeks if national
Up to 33 weeks for
Up to 26 weeks for certain
Up to 26 weeks for certain
duration
high unemployment states,
certain high
trigger has been met.
certain high
high unemployment states that
high unemployment states,
or
unemployment states, or
unemployment states,
have opted for all three
or
Up to 13 weeks for other
Up to 13 weeks
or
triggers, or
Up to 13 weeks otherwise.
states meeting other
otherwise.
Up to 20 weeks
Up to 21 weeks for those high
definitions of high
otherwise.
unemployment states that
unemployment, or
have opted for both Tier II
0 weeks otherwise.
and Tier III triggers, or
Up to 13 weeks for those high
unemployment states that
have opted for solely Tier III
triggers, or
Up to 8 weeks for those states
meeting different definitions
of high unemployment and
have opted for the Tier II
trigger, or
Up to 5 weeks for other states
meeting different definitions
of high unemployment and
have opted for Tier I trigger,
or
0 weeks otherwise.
(Triggers are explained in
detail in the cell on the
following page.)

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CRS-7
Senate Finance
Committee Report,
Current Law:
January 30, 2008,
H.R. 5749, Emergency
P.L. 91-373
Title II Temporary
H.R. 4934, Emergency
S. 2544, Emergency
H.R. 5688, Targeted
Extended
(26 U.S.C. 3304, note)
Extended
Unemployment
Unemployment
Assistance to Restore
Unemployment
Program
Extended Benefit (EB)
Unemployment
Compensation Act of
Compensation Act of
Growth in Employment
Compensation Act of
Feature
Program
Compensation
2008, Title I
2008, Title II
Throughout 2008 Act
2008
Federal and
The EB program is
All states have at least
The first day of the first
All states have at least
In order to be eligible for
All states have at least 13
state triggers
triggered when a state’s
13 weeks.
month following any
20 weeks.
benefits states must change
weeks.
to begin
insured unemployment rate
month in which the
state law to elect one, two, or
program
(IUR) or total
If the state is in an EB
number of unemployed
If the state is in an EB
three (or none) of the options.
If the state is in an EB
unemployment rate (TUR)
period or if the state’s
persons age 16 or older as
period or if the state’s
If a state chooses all three
period or if the state’s
reaches certain levels.
TUR >=6.5% or if the
compared to the same
TUR >=6.5% then the
options, up to 26 weeks of
TUR >=6% or the state’s
All states pay up to 13
state’s IUR>=4% and is
month of the previous
duration is increased
benefits may be available.
IUR>=4% then the
weeks of EB if the state’s
120% of the average of
year exceeds one million.
by 13 weeks.
duration is increased by 13
IUR for the previous 13
the rates for the same
Tier I: Up to 5 weeks, if state
weeks.
weeks is at least 5% and is
13-week period in each
TUR >=6.0% and is at least
120% of the average of the
of the 2 previous years,
110% of the state’s average
rates for the same 13-week
then the duration is
TUR for the same 13-weeks in
period in each of the 2
increased by 13 weeks.
either of the previous 2 years;
previous years. Two other
or, the IUR >=4% and is
optional thresholds exist.
120% of the average of the
(States may choose one,
rates for the same 13-week
both, or neither). If chosen,
period in each of the 2
the state would provide:
previous years; or
Option 1: An
additional 13 weeks of
Tier II: Up to 8 weeks, if state
benefits if the state’s IUR
TUR >=6.3% and is at least
is at least 6%, regardless of
110% of the state’s average
previous years’ averages.
TUR for the same 13-weeks in
Option 2: An
either of the previous 2 years;
additional 13 weeks of
or, the IUR >=5% and is
benefits if the state’s TUR
120% of the average of the
is at least 6.5% and is at
rates for the same 13-week
least 110% of the state’s
period in each of the 2
average TUR for the same
previous years; or
13-weeks in either of the
previous 2 years; or, in a
Tier III: Up to 13 weeks, if
“high unemployment
state’s TUR >=6.5% and is at
period,” an additional 20
least 110% of the state’s
weeks of benefits if the
average TUR for the same
TUR is at least 8% and is
13-weeks in either of the
at least 110% of the state’s
previous 2 years; or, the IUR
average TUR for the same
is 5% and is 120% of the
13 weeks in either of the
average of the rates for the
previous two years.
same 13-week period in each
of the 2 previous years; or
0 weeks otherwise.

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CRS-8
Senate Finance
Committee Report,
Current Law:
January 30, 2008,
H.R. 5749, Emergency
P.L. 91-373
Title II Temporary
H.R. 4934, Emergency
S. 2544, Emergency
H.R. 5688, Targeted
Extended
(26 U.S.C. 3304, note)
Extended
Unemployment
Unemployment
Assistance to Restore
Unemployment
Program
Extended Benefit (EB)
Unemployment
Compensation Act of
Compensation Act of
Growth in Employment
Compensation Act of
Feature
Program
Compensation
2008, Title I
2008, Title II
Throughout 2008 Act
2008
Other
Not Applicable. EB
None.
Section 201. Federal-
S. 2544 would
None.
None.
additions to
payments are identical to
State Agreements for
supplement regular
basic benefit
regular UC benefit levels.
Increased Unemployment
and emergency UC
or extended
Benefits would
with an additional
benefit
supplement regular and
$50/week.
emergency UC with an
additional $50/week.
Other sections of the bill
would have incentives for
states to expand UC
benefit eligibility.
Incentive payments would
be up to $7 billion.

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CRS-9
Senate Finance
Committee Report,
Current Law:
January 30, 2008,
H.R. 5749, Emergency
P.L. 91-373
Title II Temporary
H.R. 4934, Emergency
S. 2544, Emergency
H.R. 5688, Targeted
Extended
(26 U.S.C. 3304, note)
Extended
Unemployment
Unemployment
Assistance to Restore
Unemployment
Program
Extended Benefit (EB)
Unemployment
Compensation Act of
Compensation Act of
Growth in Employment
Compensation Act of
Feature
Program
Compensation
2008, Title I
2008, Title II
Throughout 2008 Act
2008
Financing
The federal unemployment
100% federally financed.
100% federally financed
100% federally
If a state has opted for solely
100% federally financed.
structure
tax on employers, among
(both the emergency UC
financed (both the
the Tier III trigger:
other things, pays the
Appropriates federal
and the additional
emergency UC and the
13-weeks 100% federally
Appropriates federal UTF
federal share (50%) of the
UTF funds as may be
$50/week).
additional $50/week).
financed.
funds as may be necessary
extended benefit (EB)
necessary for states in
for states in the
program. State
the administration of
Appropriates federal UTF
Appropriates federal
If a state has opted for the
administration of benefit.
unemployment taxes on
benefit.
funds as may be necessary
UTF funds as may be
Tier II and Tier III triggers:
employers pay for 100% of
for states in the
necessary for states in
First 8-weeks: 75% federally
the regular UC benefit and
administration of benefit.
the administration of
financed.
50% of the EB benefit.
benefit.
Final 13-weeks: 100%
federally financed.
UC benefits are financed
through employer taxes.
If a state has opted for all
The federal taxes on
three triggers:
employers are under the
First 5 weeks: 50% federally
authority of the Federal
financed.
Unemployment Tax Act
Following 8 weeks: 75%
(FUTA), and the state taxes
federally financed.
are under the authority
Final 13 weeks: 100%
given by the State
federally financed.
Unemployment Tax Acts
(SUTA). These taxes are
Appropriates federal UTF
deposited in the
funds as may be necessary for
appropriate accounts within
states in the administration of
the U.S. Treasury’s
benefit.
Unemployment Trust Fund
(UTF).

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CRS-10
Senate Finance
Committee Report,
Current Law:
January 30, 2008,
H.R. 5749, Emergency
P.L. 91-373
Title II Temporary
H.R. 4934, Emergency
S. 2544, Emergency
H.R. 5688, Targeted
Extended
(26 U.S.C. 3304, note)
Extended
Unemployment
Unemployment
Assistance to Restore
Unemployment
Program
Extended Benefit (EB)
Unemployment
Compensation Act of
Compensation Act of
Growth in Employment
Compensation Act of
Feature
Program
Compensation
2008, Title I
2008, Title II
Throughout 2008 Act
2008
Cost estimates
DOL actuarial estimates for
The Congressional
No published CBO
No published CBO
No published CBO estimate.
CBO estimates that the net
the federal share of EB
Budget Office (CBO)
estimate.
estimate.
effect of unemployment
payments in FY2008 are
estimated that the UC
provisions on direct
less than $5 million.
provisions in the Senate
spending would total
Finance bill would have
$12.8 billion from
a net cost of $13.9
2008-2013.
billion from 2008
through 2013.
Source: UI Outlook
Source: Congressional
Source: Congressional
FY2009 President’s
Budget Office Cost
Budget Office Cost
Budget, Department of
Estimate, Economic
Estimate, H.R. 5749
Labor, Office of Workforce
Stimulus Act of 2008,
Emergency Extended
Security, Division of Fiscal
February 6, 2008.
Unemployment
and Actuarial Services,
Compensation Act of
February 2008.
2008, April 17, 2008.

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