Extending Unemployment Compensation
Benefits During Recessions

Julie M. Whittaker
Specialist in Income Security
Katelin P. Isaacs
Analyst in Income Security
January 4, 2011
The House Ways and Means Committee is making available this version of this Congressional Research Service
(CRS) report, with the cover date shown above, for inclusion in its 2011 Green Book website. CRS works
exclusively for the United States Congress, providing policy and legal analysis to Committees and Members of
both the House and Senate, regardless of party affiliation.

Congressional Research Service
RL34340
CRS Report for Congress
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Extending Unemployment Compensation Benefits During Recessions

Summary
This report describes the history of temporary federal extensions to unemployment benefits from
1980 to the present. Among these extensions is the Emergency Unemployment Compensation
(EUC08) program created by P.L. 110-252 (amended by P.L. 110-449, P.L. 111-5, P.L. 111-92,
P.L. 111-118, P.L. 111-144, P.L. 111-157, P.L. 111-205, and P.L. 111-312).
This report contains five sections. The first section provides background information on
unemployment compensation (UC) benefits. It also provides a brief summary of UC benefit
exhaustion and how exhaustion rates are related to the business cycle.
The second section provides the definition of a recession as well as the determination process for
declaring a recession. It also provides information on the timing of all recessions since 1980.
The third section summarizes the legislative history of federal extensions of unemployment
benefits. It includes information on the permanently authorized extended benefit (EB) program as
well as information on temporary unemployment benefit extensions. It also includes a brief
discussion on the role of extended unemployment benefits as part of an economic stimulus
package.
The fourth section provides figures examining the timing of recessions and statistics that may be
considered for determining extending unemployment benefits.
The fifth section briefly discusses previous methods for financing these temporary programs. In
particular it attempts to identify provisions in temporary extension legislation that may have led
to increases in revenue or decreases in spending related to unemployment benefits.
This report will be updated to reflect new laws extending unemployment benefits.

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Extending Unemployment Compensation Benefits During Recessions

Contents
Unemployment Compensation and Exhaustion of Benefits ............................................................ 1
UC Benefits and Duration ......................................................................................................... 1
Monitoring Search, Generosity of Unemployment Benefits, and Disincentives to
Find Work......................................................................................................................... 2
UC Benefit Exhaustion.............................................................................................................. 3
Recessions........................................................................................................................................ 4
Determination of a Recession.................................................................................................... 4
Most Recent Recession Began December 2007 and Ended June 2009............................... 4
Recessions from 1980 to Present............................................................................................... 4
Federal Programs of Extended Unemployment Compensation....................................................... 5
Extended Benefit Program (Determined at the State Level) ..................................................... 5
EB Provisions in the American Recovery and Reinvestment Act of 2009.......................... 6
Temporary EB Trigger Modifications in P.L. 111-312........................................................ 6
Temporary Federal Extensions of Unemployment Benefits: Congressional
Intervention in Recessions...................................................................................................... 7
Temporary Extended UC Benefits as Economic Stimulus ........................................................ 7
Assessing the Labor Market: Determining When to Intervene........................................................ 8
Improving the UC System as an Automatic Stabilizer .............................................................. 9
Advisory Council on Unemployment Compensation’s 1994 Findings and
Recommendations for the Extended Benefit Program..................................................... 9
Using the Insured Unemployment Rate vs. Total Unemployment Rate.................................... 9
National, State, and Sub-State Triggers................................................................................... 10
Increases in Unemployment of at Least 1 Million Unemployed as Compared to the
Same Month in the Previous Year ........................................................................................ 11
Other Measures: Changes in UC Benefits Exhaustions and Changes in Long-Term
Unemployment ..................................................................................................................... 13
Congressional Interest in the 111th Congress: “Paying for Temporary Benefits” .......................... 16
Increases in Revenues or Decreases in Expenditures Related to Temporary
Unemployment Benefit Legislation ..................................................................................... 16

Figures
Figure 1. Economic Recessions, Percentage of Regular UC Beneficiaries to All
Unemployed, and UC Benefit Exhaustees, January 1979-November 2010 ................................. 3
Figure 2. Recessions, Changes in Unemployment Compared with the Same Month in
Previous Year, Unemployment Rates, and Temporary Federal Benefit Availability,
January 1979-November 2010.................................................................................................... 12
Figure 3. Recessions, Changes in Regular UC Benefit Exhaustions Compared with the
Same Month in Previous Year, and Unemployment Rates,
January 1979-November 2010.................................................................................................... 14
Figure 4. Recessions, Changes in Long-Term Unemployment Compared with the Same
Month in Previous Year, and Unemployment Rates, January 1979-November 2010................. 15

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Tables
Table A-1. Summary of Extended Unemployment Compensation Programs................................ 17
Table A-2. Details: Federal Supplemental Compensation (FSC) Benefits .................................... 20
Table A-3. Details: Emergency Unemployment Compensation (EUC) Benefits of 1991 ............ 21
Table A-4. Details: Emergency Unemployment Compensation (EUC08) Benefits of 2008 ........ 22
Table A-5. Timing of Recessions, 12-Month Change of at Least One Million, and
Extended Unemployment Benefits, 1990-2010.......................................................................... 24
Table A-6. Funding Temporary Unemployment Programs............................................................ 25

Appendixes
Appendix. Related Tables .............................................................................................................. 17


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Unemployment Compensation and Exhaustion of
Benefits

The cornerstone of an unemployed worker’s income support is the joint federal-state
Unemployment Compensation (UC)1 program, which may provide income support through the
payment of UC benefits. The underlying framework of the UC system is contained in the Social
Security Act. Title III of the act authorizes grants to states for the administration of state UC laws,
Title IX authorizes the various components of the federal Unemployment Trust Fund (UTF), and
Title XII authorizes advances or loans to insolvent state UC programs. UC is financed by federal
taxes under the Federal Unemployment Tax Act (FUTA) and by state payroll taxes under the State
Unemployment Tax Acts (SUTA).
The federal government funds federal and state UC program administration, the federal share
(50% under permanent law) of Extended Benefit (EB) payments, 100% of the Emergency
Unemployment Compensation (EUC08) program, and federal loans to insolvent state UC
programs. States fund regular state UC benefits and the state share (50%) of EB payments. The
American Recovery and Reinvestment Act of 2009 (P.L. 111-5, as amended) temporarily provides
for 100% federal funding of EB through January 4, 2012.
UC Benefits and Duration
Workers who lose their jobs face serious long-term economic implications. In general, they face a
substantially reduced probability of full-time employment and an increased probability of part-
time employment. Those workers who find new full-time employment on average experience
significantly decreased earnings relative to what they earned before they lost employment.
The UC program pays benefits to workers in covered employment who become involuntarily
unemployed for economic reasons and meet state-established eligibility rules. The UC program
generally does not provide UC benefits to the self-employed, to those who are unable to work, or
to those who do not have a recent earnings history. States usually disqualify claimants who lost
their jobs because of inability to work or unavailability for work, who voluntarily quit without
good cause, who were discharged for job-related misconduct, or who refused suitable work
without good cause.
This temporary unemployment insurance benefit is designed to be sufficient to meet an
unemployed worker’s basic obligations until the worker finds a new position. Generally, benefits
are based on wages for covered work over a 12-month period. The entitlement formula varies by
state, typically requiring a substantial work history and replacing up to 50% of workers’ wages.
Generally, benefits are capped at a percentage of the average wage for workers in the state, which
lowers the average replacement rate for all workers nationwide to less than 50% (36% for the first
quarter of 2010).

1 For more information on UC, CRS Report RL33362, Unemployment Insurance: Available Unemployment Benefits
and Legislative Activity
, by Katelin P. Isaacs, Julie M. Whittaker, and Alison M. Shelton. For information on the most
recent temporary federal unemployment benefit extension, see CRS Report RS22915, Temporary Extension of
Unemployment Benefits: Emergency Unemployment Compensation (EUC08)
, by Katelin P. Isaacs, Julie M. Whittaker,
and Alison M. Shelton.
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Weekly maximums in January 2010 ranged from $235 (Mississippi) to $629 (Massachusetts) and,
in states that provide dependents’ allowances, up to $943 (Massachusetts). In November 2010, the
average weekly benefit was $302. Benefits are available for up to 26 weeks (28 weeks in
Montana and 30 weeks in Massachusetts). The average regular UC benefit duration in November
2010 was 19.1 weeks, with over half of all beneficiaries exhausting their regular benefits. In the
first quarter of 2010, 35% of all U.S. unemployed workers received regular state unemployment
benefits (when all extended benefits are included that number increases to 69%).
Generally, the UC recipiency rate (the ratio of unemployed receiving UC benefits to all
unemployed) rises during economic recessions (as workers with strong labor market experience
are laid-off) and falls during economic expansions (as new entrants to the labor market begin to
comprise a greater proportion of the unemployed).2
Monitoring Search, Generosity of Unemployment Benefits, and Disincentives
to Find Work

The difficulty in monitoring job search intensity creates the risk the unemployed will abuse a
system designed to alleviate the worst financial aspects of job loss. Although most economists
would agree that UC benefits create some disincentives to find work quickly, these disincentives
are somewhat balanced by a relatively low replacement rate of wages by UC benefits and a
recognition that proper allocation of human resources and human capital requires adequate job
search time.3
The job-search behavior of the unemployed can be influenced by changing the timing, generosity,
and duration of UC benefits. Higher benefit levels and easier program requirements for benefits
will cause recipients to be less willing to accept jobs and may alleviate some of the social stigma
from being unemployed.4 The availability of benefits may create a disincentive to search for and
accept reemployment, increasing unemployment and unemployment duration.5 Economic
research has suggested that this disincentive effect is relatively small and not a particularly large
contributor to the high unemployment rates found during economic recessions.6

2 The percentage of UC beneficiaries as compared to all unemployed workers is commonly referred to as the
“recipiency rate.” The exhaustion rate measures the proportion of all UC benefit recipients who exhaust their UC
eligibility and do not find a job within that period.
3 For a detailed survey of the disincentive effect, see Gary Burtless, “Unemployment Insurance and Labor Supply: A
Survey,” in W. Lee Hansen and James Byers, eds., Unemployment Insurance (Madison: University of Wisconsin Press,
1990).
4 Ibid.
5 Congressional Budget Office, “Options for Responding to Short-Term Economic Weakness,” January 2008.
6 For example, Karen Campbell and James Sherk, Extended Unemployment Insurance – No Economic Stimulus,
Heritage Foundation, Center for Data Analysis Report #08-13, November 18, 2008, find that an increase in potential
duration of 20 additional weeks of unemployment benefits leads to a .22 percentage point increase in the
unemployment rate. See also, Bruce Meyer, “Unemployment and workers’ compensation programmes: rationale,
design, labour supply and income support,” Fiscal Studies, vol. 23, no. 1 (2002), pp. 1-49. See also Rajeev Chetty,
“Moral Hazard versus Liquidity and Optimal Unemployment Insurance,” Journal of Public Economy, vol. 116, no. 2
(2008), pp. 173-234.
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UC Benefit Exhaustion
The limited duration of UC benefits (generally 26 weeks) will result in some unemployed
individuals exhausting their UC benefits before finding work or voluntarily leaving the labor
force for other reasons such as retirement, disability, family care, or education. Empirical research
suggests that workers who exhaust benefits search at similar or higher levels of intensity as those
workers who do find employment before benefit exhaustion.7 All state programs attempt to
identify potential benefit exhaustees through a state specific profiling system. Workers who are
identified as likely to become unemployed long-term are offered intensive employment services.8
Figure 1. Economic Recessions, Percentage of Regular UC Beneficiaries to All
Unemployed, and UC Benefit Exhaustees, January 1979-November 2010
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Source: Congressional Research Service. Data are from Department of Labor, Employment and Training
Administration. http://www.doleta.gov/unemploy/chartbook.cfm.

7 Walter Corson and Mark Dynarski, A Study of Unemployment Insurance Recipients and Exhaustees: Findings from a
National Survey
, U.S. Department of Labor Employment and Training Administration, Unemployment Insurance
Occasional Paper 90-3, 1990.
8 These services may include training on job search, job counseling, and funding for educational and skill-enhancing
courses.
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Figure 1 displays the percentage of UC beneficiaries both as a percentage of all unemployed
workers (the “recipiency rate”) and as the number of UC benefit exhaustees since 1979. (Please
note that Figure 1 uses different numerical scales for the recipiency rate and for the exhaustion
rate. Because the correspondence between the two scales was determined by scaling size rather
than by a particular economic correspondence, readers should not place any significance in the
two lines crossing each other. The scale for the recipiency rate is located on the left-hand y-axis.
The scale for the UC benefit exhaustees is located on the right-hand y-axis.)
The proportion of UC recipients who exhaust their benefits varies according to economic
conditions, state benefit duration formulas, and the composition of the labor force. Some evidence
suggests that an aging workforce may have increased the proportion of unemployed workers who
are long-term unemployed; at the same time, this aging workforce may also have contributed to
the decrease in the overall unemployment rate.9
Recessions
Determination of a Recession
The National Bureau of Economic Research (NBER)—not the federal government—declares
when a recession began.10 A recession is a significant decline in economic activity spread across
the economy, lasting more than a few months, normally visible in measures of real gross domestic
product (GDP), real income, employment, industrial production, and wholesale-retail sales.11 A
recession begins just after the economy reaches a peak of activity and ends as the economy
reaches its trough. Between a trough and a peak, the economy is in an expansion.
Most Recent Recession Began December 2007 and Ended June 2009
The NBER maintains a time line of the U.S. business cycle. This chronology identifies the dates
of peaks and troughs that frame economic recessions or expansions. According to NBER, a peak
was reached in December 2007, marking the end of the expansion that began in November 2001
and thus marking the beginning of the recession that ended in June 2009.
Recessions from 1980 to Present
Since 1980, there have been five separate periods that the NBER has identified as recessions:
January 1980-July 1980; July 1981-November 1982; July 1990-March 1991; March 2001-
November 2001; and the December 2007-June 2009 recession.

9 For details on these trends, see CRS Report RL32757, Unemployment and Older Workers, by Julie M. Whittaker.
10 For a detailed explanation on the determination of recessions, see CRS Report R40052, What is a Recession and Who
Decided When It Started?
, by Brian W. Cashell.
11 The NBER explicitly states that it considers real GDP to be the single measure that comes closest to capturing what it
means by “aggregate economic activity.” Therefore, it places considerable weight on real GDP and other output
measures. Thus, the NBER takes into account employment but not unemployment or unemployment rates when
determining recessionary periods. The NBER’s approach is summarized at http://www.nber.org/cycles/recessions.html.
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Federal Programs of Extended Unemployment
Compensation

The Unemployment Compensation program’s two main objectives are to provide temporary and
partial wage replacement to involuntarily unemployed workers and to stabilize the economy
during recessions.12 These objectives are reflected in the current UC program’s funding and
benefit structure. When the economy grows, UC program revenue rises through increased tax
revenues while UC program spending falls as fewer workers are unemployed and receive
benefits. The effect of collecting more taxes while decreasing spending on benefits dampens
demand in the economy. This also creates a surplus of funds or a “cushion” of available funds for
the UC program to draw upon during a recession. In a recession, UC tax revenue falls and UC
program spending rises as more workers lose their jobs and receive UC benefits. The increased
amount of UC payments to unemployed workers dampens the economic effect of lost earnings by
injecting additional funds into the economy.
In response to economic recessions, the federal government sometimes has augmented the regular
UC benefit with both permanent (the Extended Benefit program) and temporary extensions
(including the Emergency Unemployment Compensation program) of the duration of
unemployment benefits.
Extended Benefit Program (Determined at the State Level)
The Extended Benefit (EB) program was established by the Federal-State Extended
Unemployment Compensation Act of 1970 (EUCA), P.L. 91-373 (26 U.S.C. 3304, note). EUCA
may extend receipt of unemployment benefits (extended benefits) at the state level if certain
economic situations exist within the state. The Omnibus Budget Reconciliation Act of 1981, P.L.
97-35, among other items, amended the EUCA to require that claimants have worked at least 20
weeks of full-time insured employment or the equivalent in insured wages.
The EB program is triggered when a state’s insured unemployment rate (IUR)13 or total
unemployment rate (TUR)14 reaches certain levels. 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 of the rates for the
same 13-week period in each of the 2 previous years. There are two other optional thresholds that
states may choose. (States may chose one, two, or neither of the additional options.) If the state
has chosen the option, they would provide the following:

12 See, for example, President Franklin Roosevelt’s remarks at the signing of the Social Security Act:
http://www.ssa.gov/history/fdrstmts.html#signing.
13 The IUR is the three-month average ratio of persons receiving UC benefits to the number of persons covered by UC.
The IUR is substantially different than the total unemployment rate (TUR) because it excludes several important
groups: self-employed workers, unpaid family workers, workers in certain not-for-profit organizations, and several
other, primarily seasonal, categories of workers. In addition to those unemployed workers whose last jobs were in the
excluded employment, the insured unemployed rate excludes the following: those who have exhausted their UC
benefits; new entrants or reentrants to the labor force; disqualified workers whose unemployment is considered to have
resulted from their own actions rather than from economic conditions; and, eligible unemployed persons who do not
file for benefits.
14 The TUR is a three-month average of the 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.
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• 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; an additional 20 weeks of benefits if the 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.
The EB program imposes additional restrictions on individual eligibility for benefits. It requires
that a worker be actively searching and available for work. Furthermore, the worker may not
receive benefits if the worker refused an offer of suitable work. Finally, claimants must have
recorded at least 20 weeks of full-time insured employment or the equivalent in insured wages
during their base period (the four quarters of earnings used to determine UC benefit eligibility).
EB Provisions in the American Recovery and Reinvestment Act of 2009
As amended, the American Recovery and Reinvestment Act of 2009 (P.L. 111-5, also known as
ARRA or the 2009 stimulus package) contained several provisions affecting unemployment
benefits. Among these provisions was a temporary change increasing the federal share to 100% in
the cost sharing agreement for EB through December 2011. (The permanent funding arrangement
is 50% federal funding and 50% state funding.) ARRA also provided a supplemental $25 weekly
benefit through May 2010 for recipients of unemployment benefits, including EB. Finally, ARRA
also allows states, at their option, to temporarily change the eligibility requirements for the EB
program in order to expand the number of persons eligible for EB benefits.15
Temporary EB Trigger Modifications in P.L. 111-312
P.L. 111-312 made some temporary, technical changes to certain triggers in the EB program. P.L.
111-312 allows states to temporarily use lookback calculations based on three years of
unemployment rate data (rather than the current lookback of two years of data) as part of their
mandatory IUR and optional TUR triggers if states would otherwise trigger off or not be on a
period of EB benefits. Using a two-year versus a three-year EB trigger lookback is an important
adjustment because some states are likely to trigger off of their EB periods in the near future
despite high, sustained—but not increasing—unemployment rates.
States implement the lookback changes individually by amending their state UC laws. These state
law changes must be written in such a way that if the two-year lookback is working and the state
would have an active EB program, no action would be taken. But if a two-year lookback is not
working as part of an EB trigger and the state is not triggered on to an EB period, then the state
would be able to use a three-year lookback. This temporary option to use three-year EB trigger
lookbacks expires the week on or before December 31, 2011.

15 For additional information, see CRS Report R40368, Unemployment Insurance Provisions in the American Recovery
and Reinvestment Act of 2009
, by Alison M. Shelton and Julie M. Whittaker.
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Temporary Federal Extensions of Unemployment Benefits:
Congressional Intervention in Recessions

During some economic recessions, Congress has created federal temporary programs of extended
unemployment compensation. Congress acted eight times—in 1958, 1961, 1971, 1974, 1982,
1991, 2002, and 2008—to establish these temporary programs of extended UC benefits. These
programs extended the time an individual might claim UC benefits (ranging from an additional 6
to 53 weeks) and had expiration dates. Some extensions took into account state economic
conditions; many temporary programs considered the state’s total TUR or the state’s IUR or both.
Historically, these programs started operation after the trough of a recession had passed (i.e., after
the recession had officially ended). This is due to several reasons. One cause is that NBER often
announces that a recession has begun three or more months after what is later determined to be
the official start. Another cause to this lag in response time is that often the severity of the
recession and its impact on unemployment levels does not become apparent until several quarters
after the recession begins.
The 1958 and the 1961 programs were proposed and enacted after the trough of those recessions
but before the unemployment rate had peaked. The 1971 program was enacted after the end of the
recession in November 1970. Both the 1974 and 1982 programs also became effective toward the
end of those recessions. The 1991 program was enacted eight months after the 1990-1991
recession trough but eight months before the unemployment rate peaked. Likewise, the 2002
program was enacted after the recession had ended but before the unemployment rate peaked. The
current Emergency Unemployment Compensation (EUC08) program of 2008 was enacted seven
months after the most recent recession began.16
Table A-1 located in the Appendix briefly summarizes these temporary programs17 as well as the
permanently authorized EB program. The 1982 Federal Supplemental Compensation (FSC) and
1991 Emergency Unemployment Compensation (EUC) programs had extremely complicated—
and changing—benefit triggers. Table A-2 and Table A-3 (also located in the Appendix) provide
detailed information on benefit triggers for those two temporary programs. Table A-4 provides
information on the current EUC08 program benefits and triggers.
Temporary Extended UC Benefits as Economic Stimulus
In the 110th Congress, congressional and popular debate examined the relative efficacy of
expansion of UC benefits and duration compared to other potential economic stimuli. In his
January 22, 2009, congressional testimony, the Director of the Congressional Budget Office

16 For a detailed description of the EUC08 program, see CRS Report RS22915, Temporary Extension of Unemployment
Benefits: Emergency Unemployment Compensation (EUC08)
, by Katelin P. Isaacs, Julie M. Whittaker, and Alison M.
Shelton.
17 The summary does not include P.L. 108-11, which created the special “TEUC-A” program. That temporary program
was in response to the unemployment of airline workers resulting from the September 11, 2001, terrorist attacks,
subsequent security measures, and the Iraq war. Signed into law on April 16, 2003, the program provided up to 39
weeks of extended benefits to individuals whose regular UC was based on qualifying employment with a certified air
carrier, at a facility in an airport, or with a producer or supplier of products or services for an air carrier. The program
had two tiers of benefits, known as TEUC-A and TEUC-AX and were authorized through the week ending before
December 29, 2003.
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(CBO) stated that increasing the value or duration of UC benefits may be one of the more
effective economic stimulus plans.18 This is because many of the unemployed are severely cash
constrained and would be expected to rapidly spend any increase in benefits that they may receive
and that the certainty of this behavior was very high.19 Mark Zandi of Moody’s Economy.com has
estimated multiplier effects for several different policy options, including extending
unemployment benefits. Unemployment benefits had one of the highest estimated effects (1.64,
where all proposed interventions ranged from 0.25 to 1.73).20
Others point out that increasing either the value or length of UC benefits may, however,
discourage recipients from searching for work and from accepting less desirable jobs or that their
spouses might forestall seeking additional work.21 A rationale for making any extension in
unemployment benefits temporary would be to mitigate disincentives to work, as the extension
would expire once the economy improves and cyclical unemployment declines.
Assessing the Labor Market: Determining When to
Intervene

A variety of measures are typically used to assess the state of the labor market.22 These measures
may include statistics that are absolute measures, such as employment and unemployment levels,
as well as relative measures, such as the insured unemployment rate and the total unemployment
rate.
A vigorous debate on how to determine when the federal government should intervene by
extending unemployment benefits has been active for decades. Generally, this debate has
examined the efficacy of using the IUR or TUR as triggers for extending unemployment benefits.
The debate also has examined whether the intervention should be at a national or state level.
Recently, serious consideration of other measures of the labor market has become increasingly
common. In particular, the increase in the number of unemployed from the previous year has

18 See CBO Testimony of Peter Orszag on Options for Responding to Short-Term Economic Weakness before the
Committee on Finance United States Senate on January 22, 2008; http://www.cbo.gov/ftpdocs/89xx/doc8932/01-22-
TestimonyEconStimulus.pdf.
19 For another paper that takes this position, see the following: Douglas W. Elmendorf and Jason Furman, If, When,
How: A Primer on Fiscal Stimulus
, January 2008, available at http://www.brookings.edu/papers/2008/
0110_fiscal_stimulus_elmendorf_furman.aspx.
20 Mark Zandi, “Washington Throws the Economy a Rope,” Dismal Scientist, Moody’s Economy.com, January 22,
2009. The multiplier estimates the increase in total spending in the economy that would result from a dollar spent on a
given policy option. Zandi does not explain how these multipliers were estimated, other than to say that they were
calculated using his firm’s macroeconomic model. Therefore, it is difficult to offer a thorough analysis of the estimates.
21 For example, Karen Campbell and James Sherk, Extended Unemployment Insurance-No Economic Stimulus,
Heritage Foundation, Center for Data Analysis Report #08-13, November 18, 2008. See also Martin Feldstein’s
testimony before the Committee on Finance United States on January 24, 2008, in which he stated that “[w]hile raising
unemployment benefits or extending the duration of benefits beyond 26 weeks would help some individuals ... it would
also create undesirable incentives for individuals to delay returning to work. That would lower earnings and total
spending.” Available at http://www.senate.gov/~finance/hearings/testimony/2008test/012408mftest.pdf.
22 For a detailed explanation of the more common employment measures, see CRS Report RL32642, Employment
Statistics: Differences and Similarities in Job-based and Person-based Employment and Unemployment Estimates
, by
Julie M. Whittaker.
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emerged in several proposals as a new trigger for a nationwide extension of unemployment
benefits.
Improving the UC System as an Automatic Stabilizer
The President’s 2010 Budget proposal suggested changes to the UC system through the
modification of the EB program in order to make the program more responsive to changing
economic conditions.23 While little information was provided as to the specifics of the legislation,
the broad description echoes the recommendations of the Advisory Council on Unemployment
Compensation first published in 1994.24 The President’s 2011 Budget proposal did not have a
similar suggestion.
Advisory Council on Unemployment Compensation’s 1994 Findings and
Recommendations for the Extended Benefit Program

The Advisory Council stated that the changing demographics of the workforce—coupled with
state funding problems—had led to a decline in UC recipients. This had, in turn, caused the IUR
to be a less reliable indicator of economic conditions at the state level and thus reduced the
likelihood that the EB program would be active in the states during economic recessions. The
Advisory Council also found that the temporary federal extensions of unemployment benefits
have been “extremely inefficient” as they were neither well timed nor well targeted.
The Advisory Council generally supported that the EB program use a state TUR of 6.5% as an
indicator of economic conditions meriting an active EB program.25 They also suggested that any
indicator not use historical comparisons or thresholds (e.g., 110% of previous year’s level), which
the Advisory Council labeled as “not helpful” since the threshold triggers caused the activation of
the EB program to occur later and deactivate earlier than what the Advisory Council believed was
appropriate.
The Advisory Council did not comment on the cost-sharing provisions of the current EB program.
Finally, the Advisory Council suggested raising the FUTA tax base from $7,000 to $8,500 in
order to raise the additional funds needed by this suggested change.
Using the Insured Unemployment Rate vs. Total Unemployment
Rate

The Federal-State Extended Benefit Program, created by P.L. 91-373, originally assessed the
labor market through both insured and “total” unemployment rates and included both national and

23 See the http://www.whitehouse.gov/omb/assets/fy2010_new_era/Department_of_Labor.pdf.
24 Advisory Council on Unemployment Compensation, “1994 Findings and Recommendations: Extended Benefits,” in
Collected Findings and Recommendations: 1994-1996. Reprinted from Annual Reports of the Advisory Council on
Unemployment Compensation to the President and Congress
(Washington, DC, 1996).
25 The Advisory Council also suggested that a modified IUR that also included those who had exhausted UC benefit in
the IUR calculation would be superior to the current IUR calculation.
Congressional Research Service
9

Extending Unemployment Compensation Benefits During Recessions

state level triggers for extended UC benefits. The EB’s federal trigger26 was eliminated by the
Omnibus Reconciliation Act of 1980 (P.L. 96-499). That act also required that the IUR measure
not include those who had exhausted benefits or who were receiving EB. This effectively made
the IUR statistic a less generous measure of unemployment.
Since the adoption of the permanent EB program in 1970, there has been considerable debate
concerning the relative merits of the IUR versus the TUR as an EB trigger. The IUR is defined as
the 13-week moving average of continuing regular UC claims divided by the average number of
individuals in UC-covered employment. This means that the IUR itself is an output of the UC
program.
Because the calculation of the IUR is based upon the number of individuals currently receiving
UC benefits, each state’s IUR depends on various noneconomic factors, including state eligibility
rules and administrative practices. Thus, the IUR is not a precise reflection of the health of a
state’s economy.
In comparison, the TUR is defined as the number of all unemployed individuals actively seeking
work divided by the size of the civilian labor force. The TUR represents a larger population than
the IUR, because it counts as unemployed all those who are out of work and actively looking for
work, on layoff, or waiting to start a new job within 30 days.
National, State, and Sub-State Triggers
A perennial question concerns the appropriate level at which to measure changes in
unemployment. Generally this debate has centered on the EB program and whether the EB trigger
should be based on national, regional, state or sub-state data. At the beginning of the most recent
recession (but before the recession had been identified) the debate on the EB triggers was
expanded to question what measure should be used if a new temporary extension of UC benefits
were to be enacted. In particular, should Congress act as it has in the most recent recessions and
create a nationwide extension of UC benefits with a nod to higher unemployment states through
an additional “high-unemployment” trigger? Or would it be more appropriate and a better use of
scarce resources to target only those states with current economic difficulties?
In the most recent recession, Congress first created a temporary program that did not target states
based upon state unemployment rates (P.L. 110-252). Eventually, Congress expanded the
temporary program and targeted much of the expansion of benefits to the unemployed in states
that had higher levels of unemployment (first in P.L. 110-449 and then again in P.L. 111-92).
The argument in favor of a national trigger is that the definition of a recession is national in
scope, and the federal government’s interest in reversing an economic decline is national as well.
However, recessions have often been primarily regional in impact. Thus, a national trigger can
result in the payment of extended benefits to individuals in states that do not face unusually weak
labor markets.
There have also been proposals to create triggers on either a regional or a sub-state level. The
logic behind the sub-state or regional triggers is that they might improve the targeting of benefits
because state boundaries are often of little relevance to the workings of labor markets. There can

26 The federal trigger was an IUR of at least 4.5% for 3 consecutive months.
Congressional Research Service
10

Extending Unemployment Compensation Benefits During Recessions

be considerable labor market differences between urban and rural areas within a state or among
urban areas within a state. Furthermore, some labor markets are located in more than one state. A
statewide trigger can deny benefits to areas facing severe labor market problems because other
regions of the state are not facing the same conditions. There are a variety of arguments against
regional and sub-state triggers. It would be difficult to define appropriate regional or sub-state
boundaries, and it is unclear whether these newly defined regions would be any less arbitrary than
current state boundaries. In addition, there are significant obstacles to be overcome in the
financing and administration of an EB program on the basis of regional or sub-state areas,
because the state has always been the operational unit for UC. There is also concern regarding the
accuracy and availability of regional or sub-state data and the costs of data improvements that
would be needed.27
Increases in Unemployment of at Least 1 Million Unemployed as
Compared to the Same Month in the Previous Year

In the 110th Congress, debate moved away from using the IUR or TUR as a trigger for a national
program. Serious consideration of other measures of the labor market has become increasingly
common. In particular, the increase in the number of unemployed from the previous year emerged
in several proposals for new triggers in a nationwide extension in unemployment benefits.
H.R. 4934, the Emergency Unemployment Compensation Act of 2008, was introduced on
January 15, 2008. This bill would have extended UC benefits for up to 26 weeks when the
number of unemployed persons 16 years of age or older increased by at least 1 million individuals
as compared with the same month of the previous year.
Table A-5, located in the Appendix, provides information on the timing of the recessions,
changes in unemployment of at least 1 million compared with same month in the previous year,
and federal enactment of the temporary extensions of benefits. During this period, the temporary
extensions of unemployment benefits take effect between 4 and 14 months after the onset of the
recession. The first changes in unemployment compared with the same month in the previous
year of at least 1 million occur between 3 and 5 months after the onset of the recession.
Therefore, if the “1 million” trigger had been in place in the past, the extension of UC benefits
would have been triggered between 8 to 12 months earlier than actually occurred.
Figure 2 provides a graphical presentation of the information that was summarized in Table A-4,
and it includes data on the unemployment rate.
Please note that Figure 2 uses different numerical scales for changes in unemployment levels and
for the unemployment rate. Because the correspondence between the two scales was determined
by page size rather than by a particular reason, readers should not place any significance in the
two lines crossing each other. The scale for the changes in unemployment levels compared to
same month in the previous year is located on the left-hand y-axis. The scale for the
unemployment rate is located on the right-hand y-axis.

27 The Advisory Council on Unemployment Compensation advised against the use of substate or regional data in
determining the availability of extended benefits. Advisory Council on Unemployment Compensation, Collected
Findings and Recommendations: 1994-1996
, 1996, p. 5.
Congressional Research Service
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Figure 2. Recessions, Changes in Unemployment Compared with the Same Month in Previous Year, Unemployment Rates, and
Temporary Federal Benefit Availability, January 1979-November 2010
7000
15
FSC Begins
5000
10
EUC08 Begins
FSC Ends
EUC91 Begins
EUC91 Ends
3000
TEUC Begins
TEUC Ends
ment
5
ploy
te
a

em
n

1000
ds)
nt R
e

in U
san
0
u
ange -1000
ploym
h
(tho
C
em
n
U

-5
onth -3000
12- M
Recession
-10
-5000
12-Month Change in Number of Unemployed
Seasonally Adjusted Unemployment Rate
-7000
-15
Jan- Jan- Jan- Jan- Jan- Jan- Jan Jan Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Ja J
J
J
J
J
J
J
J
J
J
J
J
J
J
J
n- an- an- an- an- an- an- an- an- an- an- an- an- an- an- an-
79
80
81
82
83
84 -8
-8
5
6
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10

Source: CRS figure. Timing of recessions from National Economic Bureau of Research. Estimated changes in unemployment compared to same month in the previous year
from the Current Population Survey data, Bureau of Labor Statistics.
CRS-12

Extending Unemployment Compensation Benefits During Recessions

Other Measures: Changes in UC Benefits Exhaustions and Changes
in Long-Term Unemployment

Beyond the IUR, TUR, and changes in the total number of unemployed, several other measures of
unemployment are often used in assessing the severity of employment conditions. These
measures include the number of unemployed workers who exhaust UC benefits and the number
of workers who have been unemployed for more than 26 weeks (the number of long-term
unemployed).
Figure 3 shows the change in the number of exhaustion of UC benefits. Figure 4 show the
change in the number of workers who have been unemployed for more than 26 weeks. Generally,
both the changes in the numbers of exhaustees and the changes in the number of long-term
unemployed peak after the end of a recession.

Congressional Research Service
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Figure 3. Recessions, Changes in Regular UC Benefit Exhaustions Compared with the Same Month in Previous Year, and
Unemployment Rates, January 1979-November 2010
500,000
15

us
io

400,000
ev
FSC Begins
Pr
10
h
300,000
EUC08 Begins
nt
FSC Ends
EUC91 Begins
EUC91 Ends
TEUC Ends
TEUC Begins
me Mo
200,000
Sa
5
o
t

100,000
te
red
a

Ra
p
nt
m
r
o
0
0
C
Yea
yme
n
o
pl

tio
us

-100,000
em
ha
Un
-5
-200,000
r UC Ex
la
u

-300,000
Recession
Reg
-10
in
12-Month Change in Regular UC Exhaustions
ge
-400,000
Seasonally Adjusted Unemployment Rate
an
Ch

-500,000
-15
Ja J J Ja J J J J Ja J J J Ja J J J Ja J J J Ja J J J J Ja J J J Ja J J
n- an- an- n an- an- an- an- n an- an- an- n an- an- an- n an- an- an- n an- an- an- an- n an- an- an- n an- an-
79 80 8 -
-
-
-
-
-
-
1 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Source: CRS figure. Timing of recessions from National Economic Bureau of Research. Estimated changes in UC benefit exhaustion compared to same month in previous
year from the Employment and Training Administration, Department of Labor. Unemployment rate from the Current Population Survey data, Bureau of Labor Statistics,
Department of Labor.
CRS-14
































































































































































































































































Figure 4. Recessions, Changes in Long-Term Unemployment Compared with the Same Month in Previous Year, and
Unemployment Rates, January 1979-November 2010
4500
15
3500
EUC08 Begins
FSC Begins
s)
10
2500
FSC Ends EUC91 Begins
EUC91 Ends
Week
TEUC Begins
+
TEUC Ends
s Year
(26
1500
5
ent
e
Previou
loym
Rat
500
h in
ent
emp
ont
0
Un
loym
-500
emp
Term
Same M
Un
ng-
to -1500
-5
Lo
ared
p

e in
m
o
-2500
Recession
ang
C
-10
Ch
12-Month Change in Long-Term Unemployment
-3500
Seasonally Adjusted Unemployment Rate
-4500
-15
Jan Jan Ja Ja Jan Ja Ja Ja Ja Ja Ja Ja Ja Ja Ja Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan- Jan-
-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
n-
79 -80 8
-
1 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Source: CRS figure. Timing of recessions from National Economic Bureau of Research. Estimated changes in long-term unemployment compared with same month in
previous year and unemployment rate from the Current Population Survey data, Bureau of Labor Statistics.
CRS-15

Extending Unemployment Compensation Benefits During Recessions

Congressional Interest in the 111th Congress:
“Paying for Temporary Benefits”

Increases in Revenues or Decreases in Expenditures Related to
Temporary Unemployment Benefit Legislation

Debate in the 111th Congress included substantial interest in whether benefit extension legislation
should include measures to “pay for” the proposals and be subject to House and Senate PAYGO
requirements or whether these extensions should be considered “emergency” measures and
exempt from the PAYGO requirements.28 With the exception of P.L. 110-449, all laws that create,
extend or alter the EUC08 program have been treated as emergency expenditures or have been
part of larger appropriation legislation. P.L. 110-449 expanded the EUC08 program from two to
four tiers (from potential maximum duration of 33 weeks to 53 weeks) but did not extend the
authorization of the program. The law included a 1.5-year extension of the FUTA surtax.
Historical comparisons with previous extensions of temporary unemployment benefits are
difficult because of differing internal House and Senate PAYGO rules that have changed over
time.29 Table A-6 in the Appendix lists all public laws that have created or altered these
temporary unemployment benefit programs. The second column lists all decreases in federal
expenditures or increases in federal tax revenues that are related to unemployment benefits within
these laws. The last column includes explanatory notes that may put the laws into better context
within this particular discussion.
The Congressional Research Service (CRS) was able to identify 8 out of 30 laws that included
reduced expenditures or increased revenues related to temporary unemployment benefits.30 Five
laws increased the federal unemployment tax (FUTA) on employers. One law increased income
tax on unemployment benefits received by individuals. Two laws increased the estimated
withholding requirements for certain corporate income taxes. One law began to require interest
payments from the states for federal loans to allow states to continue to provide regular UC
benefits to their workers. Some of the 22 other laws did have reduced expenditures or increased
revenues but are not included in this tally because (1) they were part of large appropriation bills
and generally not subject to PAYGO rules or (2) CRS was unable to directly link these measures
to any type of unemployment benefits. CRS did not attempt to identify whether these reductions
in expenditures or increases in revenues fully offset the expected costs of the changes in
expenditures on temporary unemployment benefits.

28 For example, see the text of consideration of S.Amdt. 3355. Senator Bunning stated “…As every struggling family
knows, we cannot solve a debt problem by spending more. We must get our debt problems under control, and there is
no better time than now. That is why I have been down here demanding that this bill be paid for. I support the programs
in the bill we are discussing, and if the extension of those programs were paid for, I would gladly support the bill.”
29 See CRS Report R41157, The Statutory Pay-As-You-Go Act of 2010: Summary and Legislative History, by Bill
Heniff Jr.
30 In particular, either the increase was directly associated with unemployment benefits (e.g., increases in FUTA) or
was an increase in revenue in a law where the only major increased expenditure was in altering the benefit structure or
authorization time limit of the temporary unemployment benefit.
Congressional Research Service
16

Extending Unemployment Compensation Benefits During Recessions

Appendix. Related Tables
Table A-1. Summary of Extended Unemployment Compensation Programs
Program
Public Law
Dates
Duration of
Trigger
Financing
Benefits
Mechanism
Authority
Temporary
P.L. 85-441
[Reach back to
Lesser of 50% of
None. Interest
free
Unemployment
6/1957]
the regular UC
loans to state
Compensation
6/1958 to
benefit
accounts; if a
(TUC)
6/1959
entitlement or
state failed to
13 weeks.
repay loan by
1/1/63 the FUTA
tax in the state
was raised to
repay the loan.
Temporary
P.L. 87-6
[Reach back to
Lesser of 50% of
None. FUTA
funds.
Extended
06/1960]
the regular UC
Unemployment
04/1961 to
benefit
Compensation
03/1962
entitlement or
(TEUC)
13 weeks.
Federal-State
P.L. 91-373
Permanently
Lesser of 50% of
National:
50% state SUTA
Extended
(Amended
Authorized
the regular UC
IUR: seasonally
funds.
Benefits Act of
several times.
benefit
adjusted rate of
50% federal
1970 (EB)
See also P.L. 96-
entitlement or
at least 4.5% for
FUTA funds.
499 and P.L. 97-
13 weeks.
3 consecutive
35 below.)
months
State:
IUR: at least 5%
and 120% of
corresponding
period in prior 2
years
Emergency
P.L. 92-224 and
1/1972 to
Lesser of 50% of
National:
Federal FUTA
Unemployment
P.L. 92-329
3/1973
the regular UC
IUR: seasonally
funds and
Compensation
benefit
adjusted rate of
general revenue.
(Magnuson Act)
entitlement or
at least 4.5%
13 weeks.
State:
IUR: adjusted for
exhaustions of at
least 4% and
120% of prior 2
years
Federal
P.L. 93-572,
1/1975 to
(Varied.)
National:
Federal FUTA
Supplemental
P.L. 94-12,
1/1978
Provided up to
IUR: seasonally
funds for
Benefits (FSB)
P.L. 94-45, and
26 weeks of
adjusted rate of
benefits paid
P.L. 95-19
benefits.
at least 4.5%
before 4/1977;
State:
federal general
IUR: at least 5%
revenue for
and 120% prior
benefits paid on
2 years
or after
4/1/1977.
Congressional Research Service
17

Extending Unemployment Compensation Benefits During Recessions

Program
Public Law
Dates
Duration of
Trigger
Financing
Benefits
Mechanism
Authority
Amendments to
P.L. 96-499, P.L.
Permanently
P.L. 96-499
National EB
50% state SUTA
Federal-State
97-35, and P.L.
Authorized
tightened
trigger
funds and
Extended
102-318
search and
eliminated.
Benefits Act (EB)
refusal of work
State:
50% federal

requirements.
IUR: at least 5%
FUTA funds.
P.L. 97-35
and 120% prior
eliminated the
13-week period
national trigger,
in the previous 2
removed EB
years; at state
recipients from
option IUR of at
IUR calculations,
least 6.0%;. At
and required
state option
that claimant
TUR of at least
worked at least
6.5% State TUR
20 weeks
and 110% of
recently. P.L.
prior 13-week
102-318 added
period in either
the state TUR
or both of two
option which
preceding years;
allowed for up
an additional 7
to 20 weeks of
weeks of EB if
EB duration.
TUR is at least is
8% and 110% of
either two
preceding
comparable
periods.
Federal
P.L. 97-248,
[Reach back to
Varied. See
Varied. See
Federal FUTA
Supplemental
P.L. 97-424,
6/1982]
Table A-2.
Table A-2.
funds and
Compensation
P.L. 98-21,
9/1982 to
general revenue.
(FSC)
P.L. 98-118,
6/1985
P.L. 98-135, and
P.L. 99-15.
(P.L. 99-272,
some
recipients in
Pennsylvania.)
Emergency
P.L. 102-164,
[Reach back to
Varied. See
Introduced
Federal FUTA
Unemployment
P.L. 102-182,
2/1991]
Table A-3.
“average” IUR, a
funds for
Compensation
P.L. 102-244,
13-week
benefits paid
(EUC)
P.L. 102-318,
11/1991 to
[Note:
comparison
before 7/5/1992
4/1994
Supersedes
measure.
and after

P.L. 103-6, and
rather than
10/2/1993; with
P.L. 103-152

supplements the
Varied. See
certain
EB program.
Table A-3.
exceptions,
Governors had
federal general
the option of
revenue for
triggering “off”
benefits paid on
EB benefits.]
or after 7/5/1992
but before
10/3/1993.
Congressional Research Service
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Extending Unemployment Compensation Benefits During Recessions

Program
Public Law
Dates
Duration of
Trigger
Financing
Benefits
Mechanism
Authority
Temporary
P.L. 107-147,
[Reach back to
TEUC: Up to 13
TEUC was
Federal FUTA
Extended
P.L. 108-1, and
3/2001]
weeks.
available
funds.
Unemployment
P.L. 108-26
3/2002 to
High
nationally.
Compensation
3/2004
unemployment
TEUC-X was
(TEUC, TEUC-
states (TEUC-
determined by
X)

X); up to an
state level: if the
additional 13
EB program was
weeks.
triggered on; or
if the EB
program would
have been
triggered on if
section 203(d) of
the Federal-State
Unemployment
Compensation
Act of 1970
were amended
to read IUR: at
least 4% and
120% of the
prior 2 years.
Emergency
P.L. 110-252,
[Reach back to
Varied. See
Tier I & Tier II of Federal FUTA
Unemployment
P.L. 110-449,
5/2007]
Table A-4.
EUC08 is
funds. Benefits
Compensation
P.L. 111-5,
7/2008-1/2012
nationally
after February
of 2008 (EUC08) P.L. 111-92,
(scheduled end)
available.
17, 2009, were
P.L. 111-118,
Tier III & Tier IV
paid by general
P.L. 111-144,
EUC08 is
revenue.
P.L. 111-157,
determined at
P.L. 111-205, and
the state level: if
P.L. 111-312
the state TUR is
at least 6% or if
the state IUR is
at least 4% for
Tier III and TUR
of at least 8.5%
or 5% IUR for
Tier IV.
Source: CRS.
Congressional Research Service
19

Extending Unemployment Compensation Benefits During Recessions

Table A-2. Details: Federal Supplemental Compensation (FSC) Benefits
Public Law
Benefit Tiers
Dates in Effect (first claim date)
Tax Equity and Fiscal Responsibility
10 weeks: EB activated in state after
9/12/1982-1/8/1983.
Act (P.L. 97-248), signed 9/2/1982.
6/1/1982
8 weeks: EB inactive in state; IUR at
least 3.5%
6 weeks: all other states.
Surface Transportation Act of 1982
16 weeks: IUR of 6% or higher
1/9/1983-3/31/1983.
(P.L. 97-424), signed 1/6/1983.
14 weeks: EB activated on or after
6/1/1983 but IUR below 6%
12 weeks: IUR at least 4.5%
10 weeks: IUR at least 3.5% but less
than 4.5%
8 weeks: all other states
Social Security Amendments of 1983
First FSC payments on 4/1/1983 or
4/1/1983-10/18/1983.
(P.L. 98-21), signed 4/20/1983.
later:
14 weeks: IUR of 6% or higher
12 weeks: IUR of at least 5% but less
than 6%
10 weeks: IUR of at least 4% but less
than 5%
8 weeks: All other states
Additional entitlements for FSC
recipients before 4/1/1983
10 weeks: IUR at least 6%
8 weeks: IUR at least 4% but less
than 6%
6 weeks: all other states
Federal Supplemental Compensation
FSC first payments on 10/19/1983 or
10/19/1983-3/31/1985.
Amendments of 1983 (P.L. 98-135),
later:
(No benefits past 6/1985).
signed 10/24/1983.
14 weeks: IUR of 6% or higher
12 weeks: IUR of at least 5% but less
than 6%
10 weeks: IUR of at least 4% but less
than 5%
8 weeks: all other states
Additional entitlements for FSC
recipients after 3/31/1983 but before
10/19/1983
5 weeks: if all remaining benefits are
for weeks before 10/19/1983
4 weeks: IUR of at least 5%
2 weeks: all other states
Source: CRS.
Congressional Research Service
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Extending Unemployment Compensation Benefits During Recessions

Table A-3. Details: Emergency Unemployment Compensation (EUC) Benefits
of 1991
Public Law
Benefit Tiers
Dates in Effect (first claim date)
Emergency Unemployment
20 weeks: States with TUR of 9.5%
Superseded by P.L. 102-182.
Compensation Act (P.L. 102-164),
or higher or IUR of 5% or higher.
signed 11/15/1991.
13 weeks: States with IUR of 4% or
higher or IUR of 2.5% or higher and
UC exhaustion rate of 29% or
higher.
6 weeks: All other states.
Termination of Application of Title
Claims filed before 6/14/1992
11/17/1991-7/3/1992.
IV of the Trade Act of 1974 to
33 weeks: States with TUR of 9% or
Czechoslovakia and Hungary (P.L.
higher or IUR of 5% or higher.
102-182), signed 12/4/1991; and
26 weeks: Al other states.
Emergency Unemployment Benefits
Claims filed on or after 6/14/1992
Extension (P.L. 102-244), signed
20 weeks: States with TUR of 9% or
2/7/1992.
higher or IUR of 5% or higher.
13 weeks: Al other states.
[Note: P.L. 102-182 authorized
benefit periods of 20 and 13 weeks;
P.L. 102-244 authorized an additional
13 weeks for each tier.]
Unemployment Compensation
26 weeks: States with TUR of 9% or
6/14/1992-3/6/1993.
Amendments of 1992 (P.L. 102-318),
higher or IUR of 5% or higher
signed 7/3/1992.
20 weeks: Al other states.
[Note: If national TUR fell below
7.0% benefits were to be phased
down. This condition was not met.]
Emergency Unemployment
Claims filed before 9/12/1993
3/7/1993-10/2/1993.
Compensation Amendments of 1993 26 weeks: states with TUR of 9% or
(P.L. 103-6), signed 3/4/1993.
higher or IUR of 5% or higher
20 weeks: al other states
Claims filed on or after 9/12/1993
(triggered by national TUR falling
below 7% for 2 consecutive months)
15 weeks: States with TUR of 9% or
higher or IUR of 5% or higher.
10 weeks: Al other states.
Unemployment Compensation
13 weeks: States with TUR of 9% or
10/3/1993-2/5/1994
Amendments of 1993 (P.L. 103-152),
higher or IUR of 5% or higher.
(No benefits past 4/30/1994)
signed 11/25/1993
7 weeks: All other states.
[Note: This law also made
permanent changes to the EB
program to make its benefits more
widely available after the expiration
of EUC.]
Source: CRS.
Congressional Research Service
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Extending Unemployment Compensation Benefits During Recessions

Table A-4. Details: Emergency Unemployment Compensation (EUC08) Benefits
of 2008
Public Law
Benefit Tiers and Availability
Dates in Effect and Financing
Supplemental Appropriations Act of
13 weeks (al states)
7/6/2008-3/29/2009
2008, Title IV Emergency
(No benefits past 7/4/2009)
Unemployment Compensation (P.L.
110-252), signed June 30, 2008
Funded by federal EUCA funds
within UTF.
Unemployment Compensation
Tier I: 20 weeks (all states)
11/23/2008-3/29/2009
Extension Act of 2008 (P.L. 110-449),
(No benefits past 8/29/2009)
signed November 21, 2008.
Tier II: 13 additional weeks (33
weeks total) if state TUR is 6% or
Funded by federal EUCA funds
higher or IUR is 4% or higher
within UTF.
American Recovery and
Same as above.
2/22/2009-12/26/2009
Reinvestment Act of 2009 (P.L. 111-
(No benefits past 6/6/2010)
5), signed February 17, 2009.
[Note this included several other
interventions that augmented UC
Funded by general fund of the
benefits. The Federal Additional
Treasury. (Additionally, the FAC
Compensation (FAC) benefit of
program is funded by the general
$25/week for those receiving UC,
fund of the Treasury. The 100%
EUC08, EB, DUA, or TAA. At state
financing of the EB program is
option, EB benefit year could be
funded by the EUCA funds within
calculated based upon exhausting
the UTF.)
EUC08 benefits. 100% federal
financing of EB program. First $2400
of unemployment benefits were
excluded from income tax in 2009.]
Worker, Homeowner, and Business
Tier I: 20 weeks (all states)
11/8/2009-12/26/2009
Assistance Act of 2009 (P.L. 111-92),
(No benefits past 6/6/2010)
signed November 6, 2009.
Tier II: 14 additional weeks (34
weeks total, all states)
Funded by general fund of the
Treasury.
Tier III: 13 additional weeks if state
TUR is 6% or higher or IUR is 4% or
Extended FUTA surtax through June
higher (47 weeks total)
2011. The estimated revenues
col ected from FUTA surtax
Tier IV: 6 additional weeks if state
provision were $2.578 billion and
TUR is 8.5% or higher or IUR is 6%
offset the estimated direct spending
or higher (53 weeks total)
costs for unemployment insurance
provisions of $2.42 billion.
[Note this included a 1.5 year
extension of the Federal
Unemployment Tax Act (FUTA)
surtax.]
Department of Defense
Same as above.
12/27/2009-2/27/2010
Appropriations Act, 2010 (P.L. 111-
(No benefits past 7/31/2010)
118), signed December 19, 2009.
Funded by general fund of the
Treasury.
Temporary Extension Act of 2010
Same as above.
2/28/2010-4/3/2010
(P.L. 111-144), signed March 2, 2010.
(No benefits past 9/4/2010)
Funded by general fund of the
Treasury.
Congressional Research Service
22

Extending Unemployment Compensation Benefits During Recessions

Public Law
Benefit Tiers and Availability
Dates in Effect and Financing
The Continuing Extension Act of
Same as above.
4/3/2010-6/2/2010
2010 (P.L. 111-157), signed April 15,
(No benefits past 11/ 6/ 2010)
2010
Funded by general fund of the
Treasury.
The Unemployment Compensation
Same as above.
6/2/2010-11/30/2010
Extension Act of 2010 (P.L. 111-205),
(No benefits past 4/30/ 2011)
signed July 22, 2010.
[Note this did not include an
extension of the Federal Additional
Funded by general fund of the
Compensation (FAC) benefit of
Treasury.
$25/week for those receiving UC,
EUC08, EB, DUA, or TAA. The FAC
expired on June 2, 2010.]
Tax Relief, Unemployment Insurance
Same as above.
11/30/2010-1/3/2012
Reauthorization, and Job Creation
(No benefits past 6/9/2012)
Act of 2010 (P.L. 111-312), signed
December 17, 2010
Source: CRS.
Congressional Research Service
23


Table A-5. Timing of Recessions, 12-Month Change of at Least One Million, and Extended Unemployment Benefits, 1990-2010

1980 Recession
1981-1982 Recession
1990-1991 Recession
2001 Recession
2007 Recession
No
Months
Months
Months
P.L. 107-
Months
P.L. 110-
Months
Temporary
after
P.L. 97-
after
P.L. 102-
after
147,
after
252,
after
Federal
Recession
248, FSC
Recession
164, EUC
Recession
TEUC
Recession
EUC08
Recession
Extension
Begins
Benefits
Begins
Benefits
Begins
Benefits
Begins
Benefits
Begins
Date began
January 1980

July 1981

July 1990

March
— December —
2001
2007
First 12-month
April 1980
3 months
November
4 months
November
4 months
August
5 months
March
3 months
increase in
1981
1990
2001
2008
unemployment of
at least 1 million
Congress first
Nonea NA
August
13 months
August
13 months
February
11 months
June 2008
6 months
enacts extension
1982
1991
2002
Program becomes
None NA
September
14 months
November
16 months
March
12 months
July 2008
7 months
active
1982
1991b,c
2002
End recession
July 1980
6 months
November
16 months
March
8 months
November
8 months
June 2009
18 Months
1982
1991
2001
Last change of at
March 1981
14 months
April 1983
21 months
September
17 months
September
20 months
May 2010
17 Months
least 1 million
1992
2002
more unemployed
Authorization
NA NA
March
44 months
February
42 months
January
34 months
Scheduled:
Scheduled:
ended (does not
1985
1994
2004
January
48 months
include phase out)
2012
Source: CRS. Timing of recessions from National Economic Bureau of Research http://www.nber.org/cycles.html. Estimated increases of one million unemployed use data
from the Current Population Survey, Bureau of Labor Statistics; http://www.bls.gov/data/home.htm.
a. The individual eligibility for the federal-state EB program was tightened by P.L. 96-499. The federal EB trigger was eliminated and the calculation of IUR was altered to
be less generous by P.L. 97-35.
b. H.R. 3201 was passed on August 2, 1991; the President signed the bill (P.L. 102-107) but did not declare an emergency; thus, no benefits were available. Congress sent
S. 1722 to the President who vetoed it on October 1, 1991. For a statement on the reasons for the veto, see http://www.presidency.ucsb.edu/ws/index.php?pid=
20097.
CRS-24


c. Although P.L. 102-164 was signed into law on November 15, 1991, it was immediately superseded by two other laws: P.L. 102-182, signed 12/4/1991, and P.L. 102-244,
signed February 7, 1992. P.L. 102-182 authorized benefit periods of 20 and 13 weeks depending on state economic conditions; P.L. 102-244 authorized an additional 13
weeks for each tier.
Table A-6. Funding Temporary Unemployment Programs
Revenue Increases or Expenditure Decreases Related to Unemployment
Public Law
Benefits Notes
Temporary Unemployment Compensation Act of 1958,
None.
This was a loan to the states for an additional 13 weeks
(P.L. 85-441)
of temporary state unemployment benefits. Loan had to
be repaid.
Temporary Extended Unemployment Compensation Act Temporary Federal Unemployment Tax Act (FUTA) increase of 0.4% for 1962 and

of 1961, (P.L. 87-6)
0.25% for 1963.
Emergency Unemployment Compensation Act of 1971,
None.

(P.L. 92-224)
[No title] (P.L. 92-329)
An increase in FUTA tax from 3.2% to 3.28% in 1973.

Emergency Unemployment Compensation Act of 1974
None.

(P.L. 93-572)
Tax Reduction Act (P.L. 94-12)
None.
Large bill with many tax reductions.
Emergency Compensation and Special Unemployment
None.

Assistance Extension Act
Emergency Unemployment Compensation Act of 1977
None.

(P.L. 95-19), signed April 12, 1977.
Tax Equity and Fiscal Responsibility Act of 1982
Large bill. Offsets included: Increased FUTA wage base of individual annual earnings
(P.L. 97-248)
paid by employers from $6,000 to $7,000. Increased gross FUTA tax from 3.4% to
3.5% (employers in states with approved UI laws continued to receive 2.7% credit
against FUTA tax so net tax is 0.8%); effective date: 1/1/1983. Increased gross
FUTA tax from 3.5% to 6.2% (this included a permanent tax of 0.6% plus a
temporary 0.2% that continues until al general revenue advances to EUCA have
been repaid; the offset for state employers increased to 5.4% so net FUTA tax
remained at 0.8% until all general revenue advances to EUC have been rapid and
then dropped to 0.6%); state experience rating schedules were required to have a
maximum rate of at least 5.4%; effective date: 1/1/1985 but 5-year phase-in period.
Reduced income thresholds limiting inclusion of state and federal UI benefits in
adjusted gross income to $12,000 (from $20,000) for single taxpayers and to
$18,000 (from $25,000) for married taxpayers filing jointly (waived estimated tax
penalties for 1982 attributed to this change); effective for benefits paid on or after
1/1/1982.
CRS-25


Revenue Increases or Expenditure Decreases Related to Unemployment
Public Law
Benefits Notes
Surface Transportation Assistance Act of 1982
Large bill. None.
Unable to identify UC specific offsets. However, bill
(P.L. 97-424)
revised the authorization of Highway appropriations
which included increased fuel taxes.
Social Security Amendments of 1983 (P.L. 98-21)
Required states to pay interest, when due, as a condition for al the State’s
The “cap” on automatic FUTA credit reductions
employers to continue to receive offset credit against the FUTA tax and for the
(available if certain solvency requirements are met)
State to continue to receive grants for administration; effective date: 4/1/1983.
which was scheduled to expire at the end of CY 1987,
was made permanent.
Federal Supplemental Compensation Extension of 1983
None.

(P.L. 98-118)
Federal Supplemental Compensation Amendments of
None.
Study to examine how to prevent retirees and prisoners
1983 (P.L. 98-135)
from receiving unemployment compensation.
[No title] (P.L. 99-15)
None.

Emergency Unemployment Compensation Act of 1991
None.
In order for EUC to be implemented, the President had
(P.L. 102-107)
to submit to Congress a separate declaration of a
budget emergency that, in effect, would have allowed
off-budget financing. Although the President signed the
legislation into law, he did not issue the emergency
declaration and thus the new program was inoperative
Emergency Unemployment Compensation Act of 1991
Among other financing provisions: extension of FUTA for one additional year
Superseded by P.L. 102-182.
(P.L. 102-164)
(through 1996); making estimated tax payment conform more closely to a
taxpayers’ liability; making permanent the tax refund offset program for collecting
non-tax debts owed to the federal government; and improving the col ection of
guaranteed student loans in default.
Termination of Application of Title IV of the Trade Act
None.

of 1974 to Czechoslovakia and Hungary (P.L. 102-182)
To increase the number of weeks for which benefits are
Amended Internal Revenue Code (IRC) provisions to provide for a temporary

payable under the Emergency Unemployment
increase in the amount of certain corporate estimated tax payments, by setting the
Compensation Act of 1991, and for other purposes
applicable percentage for such annualized payments at 95% of the tax liability for
(P.L. 102-244)
each of 1993 through 1996 (rather than 94% for 1993 and 1994, and 95% in 1995
and 1996).
CRS-26


Revenue Increases or Expenditure Decreases Related to Unemployment
Public Law
Benefits Notes
Unemployment Compensation Amendments of 1992
Amended the IRC to extend by one year, through December 31, 1996, a phaseout

(P.L. 102-318)
of personal exemptions for certain high income taxpayers.
Revised IRC requirements for corporate estimated tax payments. Required large
corporations to base their estimated tax payments on an increased percentage of
their current year tax liability as follows: (1) 97% for taxable years beginning after
June 30, 1992, and before 1997 (rather than 95% or 93%, determined on an actual
or annual basis); and (2) 91% for taxable years beginning in 1997 and thereafter
(rather than 90%).
Emergency Unemployment Compensation Amendments
None.

of 1993 (P.L. 103-6)
Unemployment Compensation Amendments of 1993
None.

(P.L. 103-152)
Job Creation and Worker Assistance Act of 2002
None.

(P.L. 107-147)
Supplemental Appropriations Act of 2008, Title IV
None.

Emergency Unemployment Compensation (P.L. 110-252)
Unemployment Compensation Extension Act of 2008
None.

(P.L. 110-449)
American Recovery and Reinvestment Act of 2009
None.

(P.L. 111-5),
Worker, Homeowner, and Business Assistance Act of
Extended FUTA surtax an additional 1.5 years (through June 2011).

2009 (P.L. 111-92)
Department of Defense Appropriations Act 2010
None.
Large bill, EUC08 funding was declared emergency
(P.L. 111-118)
spending.
The Temporary Extension Act of 2010 (P.L. 111-144)
None.

The Continuing Extension Act of 2010 (P.L. 111-157)
None.

The Unemployment Compensation Extension Act of
None.

2010 (P.L. 111-205)
Tax Relief, Unemployment Insurance Reauthorization,
None.

and Job Creation Act of 2010 (P.L. 111-312)
Source: CRS.
CRS-27


Notes: Some of these laws reduced expenditures or increased revenues but (1) they were part of large appropriation bills and generally not subject to PAYGO rules or (2)
CRS was unable to directly link these measures to any type of unemployment benefits.
CRS did not attempt to identify whether these reductions in expenditures or increases in revenues ful y offset the expected costs of the changes in expenditures on
temporary unemployment benefits.

CRS-28

Extending Unemployment Compensation Benefits During Recessions


Congressional Research Service
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