Temporary Programs to Extend Unemployment Compensation

Congressional research reportJan 24, 2003

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Order Code RL31277

Report for Congress

Received through the CRS Web

Temporary Programs to Extend

Unemployment Compensation

Updated January 24, 2003

Jennifer E. Lake

Analyst in Social Legislation

Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

Temporary Programs to Extend

Unemployment Compensation

Summary

The federal/state unemployment compensation (UC) system is designed to

provide temporary and partial wage replacement to workers who have become

involuntarily unemployed. UC also helps to stabilize the economy by providing

unemployed workers with additional purchasing power, which serves as an economic

stimulus when unemployment rises during recessions. The UC system generally

provides sufficient duration of benefits during periods of economic prosperity, as

most UC beneficiaries experience fewer weeks of unemployment than their

maximum entitlements and return to work before their benefit rights are exhausted.

However, during periods of economic decline or stagnation, people tend to remain

unemployed longer because of the greater difficulty in finding new jobs, and a rising

proportion of jobless workers exhaust UC benefits without finding new work. Thus,

programs have been established to increase the number of weeks of assistance during

periods of high unemployment.

Since 1958 there have been eight separate programs passed by Congress to

buttress the UC system, during periods of serious economic decline. The designs of

each of these temporary programs have addressed the perennial issues of benefit

level, duration, triggering mechanism, eligibility, and financing. The permanent

extended benefits (EB) program was enacted in 1970. EB provides one-half of

regular benefits up to a maximum of 13 weeks, and is financed half from state UC

taxes and half from a federal payroll tax.

The most recently completed temporary program was the Emergency

Unemployment Compensation (EUC) program of 1991-1994. The EUC program

was signed into law November 15, 1991, and paid benefits through April 30, 1994.

During that time, EUC was amended five times, creating a complex web of benefit

levels and durations. Over the course of the EUC program, a total of $27.9 billion

in benefits were paid to recipients, 160.9 million weeks of compensation were paid,

and 5 million individuals exhausted their EUC benefits.

On March 9, 2002, the Job Creation and Worker Assistance Act of 2002 was

signed into law (P.L. 107-147). Title II of P.L. 107-147, the Temporary Extended

Unemployment Compensation Act of 2002 (TEUC), contains provisions for a 13week extension of UC benefits in all states and an additional 13 weeks of UC

benefits for high-unemployment states.

The TEUC program ended on December 28, 2002. On January 8, 2003, S. 23

(P.L. 108-1) was signed into law, extending the TEUC program through the week

ending May 31, 2003, and including a gradual a phase-out period through August 30,

2003. Those with existing TEUC or TEUC-X claims as of May 31, 2003, will be

able to receive the remainder of their entitlement through the week ending August 30,

2003. No new TEUC claims will be accepted after May 31, 2003. P.L. 108-1 does

not provide additional weeks of benefits to individuals once they have exhausted

their initial TEUC entitlement. This report will be updated as events warrant.

Contents

Description of the UC System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Brief History of Extended Benefit Programs . . . . . . . . . . . . . . . . . . . . . . . . . 5

Temporary Unemployment Compensation (TUC) . . . . . . . . . . . . . . . . 5

Temporary Extended Unemployment Compensation (TEUC) . . . . . . . 5

Extended Benefits (EB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Magnuson Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Federal Supplemental Benefits (FSB) . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Federal Supplemental Compensation (FSC) . . . . . . . . . . . . . . . . . . . . . 8

Emergency Unemployment Compensation (EUC) . . . . . . . . . . . . . . . . 9

Issues in Designing Benefit Extension Programs . . . . . . . . . . . . . . . . . . . . 10

Insured Unemployment Rate vs. Total Unemployment Rate . . . . . . . 10

National, State, and Sub-State Triggers . . . . . . . . . . . . . . . . . . . . . . . . 11

Measuring the Severity of a Downturn . . . . . . . . . . . . . . . . . . . . . . . . 12

The Temporary Extended Unemployment Compensation (TEUC)

Act of 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Benefit Tiers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

TEUC-X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Legislative Developments in the 108th Congress . . . . . . . . . . . . . . . . . . . . . 15

Legislative History in the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . 16

Proposals to Provide Temporary Extended

Unemployment Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Proposals to Amend the TEUC Program . . . . . . . . . . . . . . . . . . . . . . . 17

Appendix. Detailed History and Benefit Structure for the Emergency Unemployment

Compensation Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

List of Tables

Table 1. Summary of Extended Unemployment Programs . . . . . . . . . . . . . . . . . . 3

Table 2. FSC Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Table 3. EUC Legislative History and Benefit Structure . . . . . . . . . . . . . . . . . . . 20

Table 4. EUC Benefit Duration (in weeks) by State and Lawa . . . . . . . . . . . . . . 21

Table 5. EUC Benefit Data, 1991-1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Temporary Programs to Extend

Unemployment Compensation

Description of the UC System

The federal/state system of unemployment compensation (UC) is designed to

provide temporary and partial wage replacement to workers who have become

involuntarily unemployed. UC also helps stabilize the economy by providing

unemployed workers with added purchasing power, which serves as an economic

stimulus when unemployment rises. UC pays weekly cash benefits on the basis of

involuntary unemployment and past work. UC benefits are not based on financial

need. The U.S. Department of Labor (DoL) oversees the UC system, but each state

administers its own program. Federal law designates the District of Columbia,

Puerto Rico, and the Virgin Islands as “states” for the purposes of the UC program;

thus, there are 53 state programs.

While federal law provides the framework for the UC system, each state has

significant latitude in designing its program. Each state establishes laws that levy

taxes to support regular benefit payments and half of the permanent extended benefits

(EB) program, set eligibility rules, determine weekly benefit amounts (WBAs), and

limit the duration of regular benefits. Federal law establishes the requirements for

the approval of state programs, authorizes grants to the states for UC administration,

and establishes the Unemployment Trust Fund, a federal fund that accounts for both

federal and state program revenues and spending.

The Federal Unemployment Tax Act (FUTA) levies an effective 0.8% tax on

private employers on the first $7,000 of wages paid annually to each UC-covered

employee.1 The Unemployment Trust Fund (UTF) accounts for the financial

transactions of the UC system. These transactions are recorded in the federal unified

budget as outlays and taxes in the UTF. Within the UTF, federal FUTA receipts are

credited to three federal accounts: (1) the Extended Unemployment Compensation

Account (EUCA), which provides the financing authority for one-half of EB; (2) the

Employment Security Administration Account (ESAA), which funds both federal

and state administrative costs; and (3) the Federal Unemployment Account (FUA),

which funds loans to insolvent state accounts.

States finance their programs and half of the permanent EB program with

payroll taxes similar to the federal FUTA tax. States impose an unemployment tax

The FUTA tax levied on private employers is actually 6.2% of the first $7,000 of wages

paid annually to each UC-covered employee. This tax rate is reduced to 0.8% in states with

approved UC programs. All 50 states, the District of Columbia, Puerto Rico, and the Virgin

Islands have approved programs; thus the effective FUTA tax rate is 0.8%.

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on at least the first $7,000 paid annually to each covered employee.2 Each state

deposits its own UC taxes with the U.S. Treasury. There are 53 state accounts within

the Unemployment Trust Fund. Each state’s account accumulates legal spending

authority over time, through credits for state UC tax receipts and interest income.

Each state is reimbursed, from its state account, by the federal government for its

benefit costs.

Regular UC benefits are designed to assist experienced workers facing shortterm, temporary periods of unemployment. Currently, 51 state programs limit the

maximum duration for receipt of regular UC benefits to 26 weeks. Only

Massachusetts and Washington allow a longer maximum duration of 30 weeks.

During periods of economic growth, the duration of regular benefits is usually

sufficient, as most UC beneficiaries experience fewer weeks of unemployment than

their maximum entitlements for the year. For example, in 1999 the national average

duration was 14.2 weeks, compared to a national average duration of 16.5 weeks

during 1993 (when the effects of the 1991 recession were reflected in the

unemployment data). The national average duration for 2001 was 13.5 weeks.

However, during periods of economic decline, people tend to remain unemployed

longer because of the greater difficulty in finding new jobs, and a rising proportion

of jobless workers exhaust UC benefits without finding new work. For example, in

1993 the national average exhaustion rate for regular UC benefits was 38.4%,

compared to 31.3% in 1999. The national average exhaustion rate for 2001 was

32.6%, and was 38.8% in the 2nd quarter of 2002. Thus, programs have been

established to increase the number of weeks of assistance during periods of high

unemployment.

Alaska, New Jersey, and Pennsylvania also tax employees directly.

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Table 1. Summary of Extended Unemployment Programs

Duration of

Benefits

Public

Law

Dates

Temporary

Unemployment

Compensation

(TUC)

85-441

6/58 to 6/59

Lesser of 50% of

regular UC benefit

entitlement, or 13

weeks

None.

Loans to state accounts; if a

state failed to repay loan by

1/1/63, the FUTA tax in the

state was raised to repay the

loan

Temporary

Extended

Unemployment

Compensation

(TEUC)

87-6

4/61 to 3/62

Lesser of 50% of

regular UC benefit

entitlement, or 13

weeks

None.

FUTA taxes.

Federal-State

Extended

Benefits Act of

1970 (EB)

91-373

Permanently

Authorized

Lesser of 50% of

regular UC benefit

entitlement, or 13

weeks

National:

IUR: (seasonally adjusted) of

at least 4.5%

State

IUR: at least 5.0% and 120%

prior 2 years; or 6.0%

TUR: 6.5% and 110% of either

of 2 prior years.3

50% state UC taxes

50% federal FUTA taxes

Emergency

Unemployment

Compensation

(Magnuson Act)

92-224

1/72 to 3/73

Lesser of 50% of

regular UC benefit,

or 13 weeks

National: seasonally adjusted

IUR of at least 4.5%

State: special IUR of at least

4% and 120% of prior 2

years4

FUTA taxes.

Program

Trigger Mechanism

Financing Authority

The EB triggers reported in this box are the trigger rates in operation today. See the section below, Extended Benefits (EB) for more

details on the changes made to the EB triggers since enactment of P.L. 91-373.

The Magnuson Act used an IUR that was adjusted to include exhaustions. See the section below on the Magnuson Act for a

description of this trigger. This measure was not calculated in exactly the same manner as the adjusted insured unemployment rate

(AIUR) was calculated in the EUC program of the 1990's.

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Public

Law

Dates

Federal

Supplemental

Benefits (FSB)

93-572

1/75 to 10/77

Federal

Supplemental

Compensation

(FSC)

97-248

Emergency

Unemployment

Compensation

(EUC)

Temporary

Extended

Unemployment

Compensation

(TEUC)

Program

Duration of

Benefits

Trigger Mechanism

Financing Authority

Varied during the

program; at its

peak provided up

to 26 weeks of

benefits in the first

half of 1975

National:

IUR: (seasonally adjusted)

of at least 4.5%

State:

IUR: at least 5.0% and 120%

prior 2 years; or 6.0%

TUR: 6.5% and 110% of either

of 2 prior years

FUTA taxes for benefit paid

before 4/1/77; federal general

revenue for benefits paid on or

after 4/1/77

9/82 to 6/85

Varied depending

on time period and

state’s insured

unemployment

(see Table 2)

Varied during the program (see

Table 2)

FUTA taxes and federal

general revenue.

102-164

11/91 to 4/94

Varied depending

on time period and

state’s insured

unemployment

(see Table 3 in the

Appendix)

Varied during the program (see

Table 3 in the Appendix)

FUTA taxes for benefits paid

before 7/5/92 and after 10/2/93;

with certain exceptions, federal

general revenue for benefits

paid on or after 7/5/92 but

before 10/3/93

107-147

3/02 to 12/02

TEUC and TEUCX: Lesser of 50%

of regular UC

entitlement, or 13

weeks5

TEUC-X:

IUR: at least 4% and 120% of

the prior 2 years

TUR: at least 6.5% and 110%

of either or both of the

prior 2 years.

FUTA taxes.

There are two benefit tiers available under the TEUC program. The first tier (TEUC) is available in every state; the second tier

(TEUC-X) is available only in ‘high-unemployment’ states which meet the trigger.

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Brief History of Extended Benefit Programs6

Temporary Unemployment Compensation (TUC). The first temporary

extended UC program was the Temporary Unemployment Compensation (TUC)

(P.L. 85-441) program available from June 1958 through June 1959. Eligible

individuals received a TUC benefit that was equal to 50% of the total amount of their

regular UC benefit. This means, for example, that an individual who received a

regular UC entitlement of 26 weeks received 13 weeks of TUC benefits, or an

individual who received 14 weeks of regular UC received 7 weeks of TUC benefits.

An individual’s TUC benefit was also reduced by the amount of any state financed

temporary additional UC benefits.7

The TUC program was extended once. As originally enacted, the TUC program

was to provide additional benefits for weeks of unemployment beginning after June

19, 1958, and before April 1, 1959. P.L. 86-7 extended TUC through June 1, 1959

for claimants who had exhausted regular benefits before the week of April 1, 1959.

TUC was financed by loans to individual state accounts. If a state failed to repay the

loan by January 1, 1963, the FUTA tax in that state was raised to repay the balance

of the loan. State participation in the TUC program was optional.

Temporary Extended Unemployment Compensation (TEUC)8. The

Temporary Extended Unemployment Compensation (TEUC) (P.L. 87-6) program

was in place from April 1961 through March 1962. TEUC benefits were provided

nationwide for individuals who had exhausted their regular benefit entitlement after

June 30, 1960. Individuals eligible for TEUC received a benefit equal to the lesser

of 50% of their regular UC entitlement or 13 weeks. The TEUC program also

limited the total number of weeks of benefits to a maximum of 39 (26 weeks of

regular UC plus 13 weeks of TEUC). Unlike the TUC program, TEUC benefits were

not reduced by weeks of temporary additional state UC, but they were reduced by

amounts received from public or private pensions.

TEUC was financed through repayable advances from federal general revenue,

except that benefits for jobless federal employees and ex-service members were

financed directly from federal general revenues and were not required to be repaid.

The advances for regular state benefit exhaustees were required to be repaid through

a delayed, temporary increase in the FUTA tax revenues. The net FUTA tax rate was

doubled in 1962 to 0.8% (from the 1961 level of 0.4%), and was set at 0.65% for

1963. This increased FUTA revenue was credited to a special, temporary account in

For a more detailed history, see CRS Report 94-458, Unemployment Compensation: A

History of Extended Benefits for the Long-Term Unemployed, by James R. Storey and Gene

Falk.

While an individual’s TUC entitlement would be reduced by the number of weeks of state

temporary additional UC, an individual’s receipt of TUC benefits could not affect their

eligibility for, or amount of the state temporary additional UC benefits.

P.L. 107-147, the recent Job Creation and Worker Assistance Act of 2002, has also created

a temporary extended benefit program entitled the Temporary Extended Unemployment

Compensation Program of 2002 or (TEUC).

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the Unemployment Trust Fund that served as an accounting device for the repayment

of the general fund transfers. The TEUC program was mandatory in all states.

Extended Benefits (EB). The permanent EB program was enacted with the

passage of the Federal-State Extended Unemployment compensation Act of 1970

(P.L. 91-373). As originally enacted, the EB program contained both national and

state-level triggers. The program was activated nationally when the national

seasonally adjusted insured unemployment rate (IUR)9 was 4.5% or higher for at least

3 consecutive months. EB could be activated in a specific state if its IUR for the

preceding 13 weeks was at least 4% and this quarterly average was at least 120% of

the corresponding average of the previous 2 years. The national trigger was

eliminated in 1981 with passage of the Omnibus Budget Reconciliation Act of 1981

(OBRA 81). The permanent EB program provides one-half of regular benefits up to

a maximum of 13 weeks, and is financed half from state UC taxes and half from

FUTA taxes. The Federal-State Extended Benefits Act of 1970 also provided for

additional FUTA revenue by raising the taxable wage base, for the first time in the

UC system’s history, from $3,000 to $4,000, and by raising the net FUTA tax rate

from 0.4% to 0.5%.

The Omnibus Reconciliation Act of 1980 (OBRA 80, P.L. 96-499), established

a federal job search requirement for EB claimants, established rules denying EB

benefits to claimants who refused certain classes of work, and provided a federal

definition of “suitable work.” The Omnibus Reconciliation Act of 1981 (OBRA 81,

P.L. 97-35), signed into law August 13, 1981, established more restrictive criteria for

activating EB. OBRA 81 eliminated the national trigger, making EB available only

in states with high IURs; raised the state trigger level to a 13-week average IUR of

at least 5% and 120% of the average IUR for the corresponding weeks in the past 2

years; allowed, at state option, for EB to be activated when the state’s IUR is at least

6%, regardless of the average IUR in the past 2 years; and changed the way the IUR

was calculated, excluding EB claimants from the measure (thus reducing IURs).10

OBRA 81 also established a federal minimum requirement for work history by

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 over the first 4

of the last 6 completed quarters. In other words, it is number of individuals receiving UC

benefits divided by the number of individuals who would be eligible for UC should they

become unemployed. Insured Unemployed is defined as the average weekly number of

weeks claimed for the 3 months of the quarter. Covered Employment is defined as the

number of employees covered by UI as reported to the states by employers.

The Federal-State Extended Unemployment Compensation Act of 1970 required that

national and state EB triggers be based on the IUR, defined as average weekly UC claims

divided by covered employment. The Department of Labor’s regulation required that claims

for regular UC, EB and any additional compensation be included in the IUR determination.

In June 1979, the Carter Administration proposed revising the regulations to include claims

only for regular benefits in the IUR calculations. This change was effective February 3,

1980 (Federal Register, v. 45 no. 2, January 3, 1980, p. 797). However, the U.S. District

Court for the District of Columbia in AFL/CIO v. Marshall found this change to be illegal.

DoL revised its IUR computation in December 1980 to include EB claimants, until OBRA

81 mandated that the IUR include only regular benefit claimants.

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requiring EB claimants to have worked at least 20 full weeks, or earned equivalent

wages, in a recent period prior to becoming unemployed.

In 1992, P.L. 102-182 added an optional EB trigger that uses a state’s total

unemployment rate (TUR) to determine its eligibility to activate EB. The TUR

measures the level of unemployment using survey data rather than the administrative

UC claims data upon which the IUR depends. The TUR is the ratio of the number

of people who have lost jobs and are seeking work to the number of people who are

in the civilian work force. Currently, nine states have adopted the optional TUR

trigger (Alaska, Connecticut, Kansas, New Hampshire, North Carolina, Oregon,

Rhode Island, Vermont, and Washington).

Magnuson Act. The EB program was enhanced temporarily by the

Emergency Unemployment Act of 1971 (P.L. 92-224). Also known as the Magnuson

Act, it was signed into law on December 29, 1971, began operation 30 days later, and

was in place through March 1973. Like its predecessors, the Magnuson Act provided

one-half the regular benefits in the state up to an additional 13 weeks of benefits.

The Magnuson Act was wholly financed with FUTA taxes. Under the Magnuson

Act, emergency compensation was made available in states that had activated the EB

program, or in states’: that had been eligible for EB at some point in the past year;

where the IUR exceeded EB’s 4% threshold but failed to meet the 120% requirement;

or where the insured unemployment rate, adjusted for exhaustions exceeded 6.5%.

It is important to note that the adjusted insured unemployment rate (AIUR)

implemented by the Magnuson Act was arrived at using a different calculation than

the AIUR implemented in the Emergency Unemployment Compensation (EUC)

program of the 1990's.11 Under the Magnuson Act the AIUR was calculated by

combining the IUR (as determined in the EB program) with the 13-week exhaustion

rate. The Magnuson Act calculated the 13-week exhaustion rate by dividing 25% of

the sum of the most recent 12 months worth of exhaustions by the average monthly

covered employment.

The Magnuson Act was originally set to expire on September 30, 1972. P.L. 92329 extended the program to March 31, 1973, and included a delayed, temporary

increase in the FUTA tax rate, for 1973 only, to 0.58% from 0.5%.

Federal Supplemental Benefits (FSB). The Emergency Unemployment

Compensation Act of 1974 (P.L. 93-572) created the Federal Supplemental Benefits

(FSB) program. FSB was in effect from January 1975 through October 1977. FSB

went through several changes in duration during the course of the program. P.L. 93572 provided for 13 weeks of extended UC benefits, financed from spending

authority in the Emergency Unemployment Compensation Account (EUCA). EB

was triggered nationwide in February 1975, making both EB and FSB payable in all

states. The Tax Reduction Act of 1975 (P.L. 94-12) doubled the maximum FSB

The AIUR used in the EUC program was defined as the 13-week moving average of

insured unemployed plus the sum of the exhaustions in the 3 most recently completed

calendar months divided by covered employment.

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weeks to 26. This brought the maximum number of weeks of UC in all states to 65

(26 weeks of regular benefits, 13 weeks of EB, and 26 weeks of FSB).

The Emergency and Special Unemployment Extension Act of 1975 (P.L. 94-45)

retained the March 31, 1977 expiration date set by P.L. 93-572 but began a gradual

scaling back of the program. P.L. 94-45 established a trigger for FSB separate from

that for EB. The new trigger restricted FSB to states with high IURs and introduced

a tiered benefit structure providing more weeks of FSB in states with higher

unemployment. In states with IURs exceeding 6%, 26 weeks of FSB continued to

be available; in states with IURs of at least 5% but less than 6%, FSB was available

for up to 13 weeks. FSB was not available in states with IURs of less than 5%.

The Emergency Unemployment Extension Act of 1977 (P.L. 95-19) extended

FSB through October 31, 1977, when the program expired. P.L. 95-19 reduced the

maximum number of weeks of FSB to 13 in all states with IUR’s over 6%, with no

additional weeks available in any state that did not meet the 6% trigger. P.L. 95-19

also provided that FSB benefits paid after April, 1, 1977 be financed from federal

general revenues.

Federal Supplemental Compensation (FSC). The Tax Equity and Fiscal

Responsibility Act of 1982 (P.L. 97-248), which established the FSC program, was

enacted September 3, 1982. FSC was authorized in part to offset the restrictions on

the permanent EB trigger, imposed by OBRA 81. These restrictions effectively

confined EB to about half the states during the 1981-1982 recession, the worst since

the Great Depression. States were also being triggered off EB in 1982 because the

OBRA 81 provision increasing the state trigger level became effective after

September 25, 1982. FSC provided benefits beginning September 12, 1982, and was

financed from federal general revenue. FSC was set to expire March 31, 1983, but

was extended several times through June 1985. Some of the extensions were made

retroactively because extension legislation was not enacted before scheduled

expiration dates. Table 2 illustrates the various changes made to the FSC program.

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Table 2. FSC Benefits

Law

Benefit Tiers

Dates in

Effect

Tax Equity and

Fiscal

Responsibility Act

(P.L. 97-248)

signed 9/3/82

10 weeks: EB activated in state after 6/1/82

8 weeks: EB inactive in state; IUR at least 3.5%

6 weeks: All other states

9/12/821/8/83

Surface

Transportation Act

of 1982 (P.L. 97424) signed 1/6/83

16 weeks: IUR of 6% or higher

14 weeks: EB activated on or after 6/1/83 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

1/9/833/31/83

Social Security

Amendments of

1983 (P.L. 98-21)

signed 4/20/83

First FSC payments on 4/1/83 or later:

4/1/8310/18/83

14 weeks:

12 weeks:

10 weeks:

8 weeks:

IUR of 6% or higher

IUR of at least 5% but less than 6%

IUR of at least 4% but less than 5%

IUR below 4%

Additional entitlements for FSC recipients before

4/1/83:

10 weeks: IUR at least 6%

8 weeks: IUR at least 4% but below 6%

6 weeks: IUR below 4%

Federal

Supplemental

Compensation

Amendments of

1983 (P.L. 98-135)

signed 10/24/83

FSC first payments 10/19/83 and later:

14 weeks:

12 weeks:

10 weeks:

8 weeks:

IUR at least 6%

IUR at least 5% but less than 6%

IUR at least 4% but less than 5%

IUR below 4%

10/19/83expiration

date

Additional entitlements, FSC first payments after

3/31/83 but before 10/19/83:

5 weeks:

4 weeks:

2 weeks:

If all remaining benefits are for weeks before

10/19/83

IUR of at least 5%

IUR below 5%

Emergency Unemployment Compensation (EUC). The Emergency

Unemployment Compensation Act of 1991 (P.L. 102-164) was signed into law

November 15, 1991, and paid benefits through April 30, 1994. The EUC program

was amended five times during this period: P.L. 102-182, P.L. 102-244, P.L. 102318, P.L. 103-6, and P.L. 103-152. The EUC covered those individuals who

exhausted their regular UC benefits, any additional state benefits, and EB. Thus, in

order to be considered eligible for EUC, a claimant must not have been entitled to

any other UC benefit under federal or state law. EUC was a federal program, and

was federally financed, but the benefits were paid by the states through federal-state

CRS-10

agreements. All 50 states, the District of Columbia, the Virgin Islands, and Puerto

Rico paid EUC benefits. Over the course of the EUC program, a total of $27.9

billion in benefits were paid to recipients. A total of 160.9 million weeks of

compensation were paid, however 5 million individuals exhausted their EUC

benefits.

Unlike the other temporary programs enacted since 1970, EUC effectively

superseded, rather than supplemented EB. Under the EUC program, an individual’s

EUC entitlement was reduced by any EB received. The Governor of a state that

triggered on to EB had the option of triggering it off in order to qualify that state’s

jobless for EUC. EB is financed half from federal unemployment taxes, while EUC

was wholly federally financed. Thus, triggering off EB to receive EUC reduced the

state’s benefit costs.

The tables located in the Appendix to this report highlight the complex

legislative framework of the EUC program. Table 3 presents the various public laws

defining the EUC program, benefit tiers, and effective dates for each law. Table 4

presents the duration of benefits and changes in the duration of benefits for each

state, under each law that authorized EUC. Table 5 presents data on the benefits

paid, number of “first pays,” weeks of compensation and the number of exhaustees

by state.12

The numerous legislative changes to the EUC program illustrate well the

difficulties inherent in the design of emergency extended benefit programs. Certain

states whose IUR, AIUR or TUR measures hovered around the triggers changed

benefit levels several times during the program’s operation, thereby creating

considerable administrative complexity for state agencies. Oregon, Pennsylvania,

Vermont and Maine were particularly affected.

Issues in Designing Benefit Extension Programs

Insured Unemployment Rate vs. Total Unemployment Rate. Since

the adoption of the permanent EB program in 1970, there has been considerable

debate concerning the relative merits of the insured unemployment rate (IUR) versus

the total unemployment rate (TUR) as an EB trigger. The IUR is defined as the 13week moving average of continuing regular UC claims divided by the average

number of individuals in UC-covered employment over the first 4 of the last 6

completed quarters.13 This means that the IUR itself is an output of the UC system.

The state IURs depend on various non-economic factors, including state eligibility

rules and administrative practices. Thus, the IUR is not a precise reflection of the

health of a state’s economy.

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

A “first pay” is defined as the first payment in a benefit year for a week of unemployment

claimed. This measure is used as proxy for “beneficiaries.”

Advisory Council on Unemployment Compensation. Report and Recommendations.

February 1994. p. 63.

CRS-11

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. Since March 1992, states have had the option of using the seasonally

adjusted TUR, a measure that should prevent a state’s triggering EB during periods

of high seasonal unemployment. Currently, nine states have adopted this trigger

(Alaska, Connecticut, Kansas, New Hampshire, North Carolina, Oregon, Rhode

Island, Vermont, and Washington). While the TUR is recognized as a better

indicator of the health of a state’s labor market, it is criticized by some as an

inappropriate EB trigger because the TUR includes many individuals for whom UC

benefits are not available, such as individuals voluntarily separated from

employment.

National, State, and Sub-State Triggers. A perennial EB question

concerns the appropriate level at which to measure changes in unemployment.

Should the EB trigger be based on national, regional, state or sub-state data?

Currently EB is triggered on a statewide basis. National and state-level triggers were

used together from the beginning of the permanent EB program in 1970 through

1981, when the national trigger was eliminated. 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 a downturn is national as well. Thus, a national

trigger is appropriate where a goal of the program is to address cyclical

unemployment by bolstering personal income during a downturn.

The EUC program, while not employing a national trigger, essentially provided

benefits on a national level, because some form of emergency extended benefits were

available to individuals in all states. The EUC triggers allowed for variations in

duration of benefits among the states in relation to state unemployment levels.

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 EB 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 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. There

is little evidence that either of these mechanisms would improve the targeting of

benefits during a recession compared to the existing state-level trigger structure.

Considerable controversy also exists concerning how 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 based

on regional or sub-state areas, because the state has always been the operational unit

CRS-12

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.14

Measuring the Severity of a Downturn. The permanent EB program

employs threshold requirements for changes in the unemployment rate in addition to

the unemployment rate itself. Historically, the EB thresholds have been set at 120%

for the IUR triggers and 110% for TUR triggers. There are three potential conditions

under which a state can trigger on to EB. The first is an automatic trigger applying

to all states, allowing EB to be triggered when a state’s average 13-week IUR in the

most recent 13 weeks is at least 5.0% and at least 120% of the average of the 13week IUR in the last 2 years for the same 13-week calendar period. The second

trigger, which is available to states at their option, does not use a threshold criterion.

It allows a state to trigger on when the current 13-week IUR is at least 6.0%. All but

12 states have adopted the second trigger option. The third trigger mechanism is a

state-option trigger based on a seasonally adjusted 3-month average TUR. If the

average TUR exceeds 6.5% and is at least 110% of the same measure in either of the

prior 2 years, a state can offer 13 weeks of EB. If the average TUR exceeds 8% and

meets the same 110% test, 20 weeks of EB can be offered. Only nine states (Alaska,

Connecticut, Kansas, New Hampshire, North Carolina, Oregon, Rhode Island,

Vermont and Washington) use this third trigger.

The threshold requirements (the 110% and 120% tests) are designed to

distinguish states suffering from chronically high unemployment from those that have

experienced a recent cyclical tightening of the labor market. Use of thresholds

prevents the countercyclical effects of EB from being applied in states that have little

cyclical unemployment. One difficulty with thresholds is that they often serve to

delay the extension of benefits beyond the point where some political leaders may

feel that assistance is needed. A state such as Alaska that suffers from chronically

high unemployment will, because of the 120% criterion, have to reach a higher IUR

to trigger EB on than will a state that enters a recession with a lower unemployment

rate. Thus, a deteriorating national economy could result in EB triggering on faster

in more prosperous states than in poorer states if the low-unemployment states meet

the 120% criterion first.15

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.

For a discussion of additional policy issues regarding the use of unemployment triggers,

with particular focus on their use as a measure of economic need under the TANF

contingency fund, see CRS Report RL31106, Welfare Reform Financing Issues: An Analysis

of Funding Available in Case of Recession, by Gene Falk and Craig Abbey. For further

discussion of policy issues concerning extended benefits, see Advisory Council on

Unemployment Compensation, Report and Recommendations. February 1994. Chapter 6,

Extended Benefits Reform.

CRS-13

The Temporary Extended Unemployment Compensation

(TEUC) Act of 2002

Historically, temporary EB programs often started operation after the trough of

a recession had passed.16 The TUC (1958) and the TEUC (1961) were proposed and

enacted after the trough of those recessions but before the unemployment rate had

peaked. The EUCA (1971) was enacted after the end of the recession in November

1970 because unemployment levels had remained relatively high. FSC (1974) and

FSB (1982) both became effective toward the end of recessions. EUC (1991) was

enacted 8 months after the 1990-91 recession trough but 8 months before the

unemployment rate peaked.

In November, 2001, the National Bureau of Economic Research (NBER)

determined that the current recession began in March 2001.17 One unique feature of

the current economic decline is the added impact of a non-economic event (the

September 11, 2001 terrorist attacks). NBER maintains that the attacks may have

been a significant factor in altering the nature of the economic decline from a

contraction to a recession. Although it is impossible to measure precisely the

economic effects of the attacks, they focused public attention on the state of the

economy and worsening unemployment.18 The recession, and the economic impact

of the attacks, put pressure on Congress to legislate some form of emergency or

supplemental extended benefits.

On March 9, 2002, the Job Creation and Worker Assistance Act of 2002 (P.L.

107-147) was signed into law. Title II of P.L. 107-147 is the Temporary Extended

Unemployment Compensation Act of 2002 (TEUC).19 The TEUC program contains

provisions extending UC benefits for 13 weeks in all states, distributing $8 billion

in Reed Act Funds to the states, and offering an additional 13 weeks of UC benefits

(for a potential total extension of 26 weeks) in high-unemployment states. The

benefit extensions in the TEUC program are wholly federally financed (with FUTA

tax dollars from EUCA account in the unemployment compensation trust fund) and

provide weekly benefit amounts equal to the amount of regular UC weekly benefits.

The trough is the lowest point of GDP reached at the end of an economic decline.

The National Bureau of Economic Research (NBER) defines a recession as “a significant

decline in activity spread across the economy, lasting more than a few months, visible in

industrial production, employment, real income, and wholesale-retail trade.” Recessions

begin just after the peak of an economic expansion and end as the economy approaches the

trough of the decline. For more information see The NBER’s Business-Cycle Dating

Procedure, [http://www.nber.org/cycles/recessions.html]. NBER Business Cycle Dating

Committee, December 13, 2001.

For additional information regarding layoffs due to the September 11, 2001 terrorist

attacks see CRS Report RL31250, Layoffs Due to the September 11, 2001 Terrorist Attacks

and the Worker Adjustment and Retraining Notification Act (WARN), by Linda Levine.

There was another program passed by Congress in 1961 called the Temporary Extended

Unemployment Compensation (TEUC) program. This program has no relationship with the

TEUC program of 2002.

CRS-14

Eligibility. An individual could be eligible for TEUC benefits if he or she (1)

filed an initial (new or additional) claim that was effective during or after the week

of March 15, 2002; and (2) has exhausted regular benefits or has no benefit rights due

to expiration of a benefit year ending during or after the week of March 15, 2001; and

(3) has no rights to regular or extended benefits under any state or federal law; and

(4) is not receiving benefits under Canadian law.20 Individuals also must have 20

weeks of work, or the equivalent in wages, in their base periods in order to qualify

for TEUC.

Benefit Tiers. The Temporary Extended Unemployment Compensation

(TEUC) program has two separate benefit tiers. The first tier, TEUC, contains no

trigger mechanism or threshold requirement. The first tier of benefits applies to all

states, regardless of the IUR in each state. Under the first tier of benefits, individuals

are eligible for up to 13 weeks of TEUC benefits.

An individual’s TEUC benefit entitlement is based upon their regular UC

entitlement. TEUC law is written so that an individual receives the lesser of 50% of

their regular UC entitlement or 13 times their average weekly benefit amount.21 The

key point is that individuals who were not eligible to receive the full 26 weeks (30

weeks in Massachusetts and Washington)22 of regular UC would receive a TEUC

allotment that was equal to half of their regular UC benefit. For example, an

individual who received 14 weeks of regular UC and exhausted those benefits, would

be eligible for 7 weeks of TEUC.

The second tier of benefits, TEUC-X, provides up to an additional 13 weeks of

extended UC benefits.23 This second extension is available only to those individuals

who exhaust their initial 13-week TEUC extension in a state classified as a ‘high

unemployment’ state at the time the individual exhausts the initial TEUC entitlement.

TEUC-X has a trigger mechanism to determine whether or not a state is considered

a ‘high-unemployment’ state.

A state is classified as a ‘high-unemployment’ state if the state’s IUR is at least

4%, and at least 120% of the average of the 13-week IUR in the last 2 years for the

same 13-week calendar period. DoL provides updated weekly trigger notices

U.S. Department of Labor. Employment and Training Administration. Unemployment

Insurance Program Letter No. 17-02.

P.L. 107-147, Sec. 203(b)(1).

The ‘lesser of’ segment of this provision also ensures that eligible individuals in

Massachusetts and Washington states do not receive a larger TEUC entitlement than

comparably eligible individuals in other states. An individual who received a full 30 weeks

of regular UC in Washington or Massachusetts would (without the ‘lesser of’ provision) be

eligible for 15 weeks.

The TEUC-X benefit amount is equal to the first tier of TEUC benefits. For example, an

individual who exhausted their initial TEUC allotment of 7 weeks while their state was

classified as a ‘high-unemployment state’ would receive an additional 7 weeks of TEUC-X

benefits. This would mean that the individual in our example (above) would have received

a total of 28 weeks of unemployment compensation benefits (14 weeks of regular UC, 7

weeks of TEUC, and 7 weeks of TEUC-X).

CRS-15

indicating when states have triggered on to the TEUC-X program.24 Once a state has

triggered on to TEUC-X, that state will remain classified as a high-unemployment

state for 13 weeks, regardless of whether or not the state’s IUR drops below the 4%

criterion during that 13-week period. At the end of that 13 weeks, the state will

trigger off TEUC-X if that state’s IUR has fallen below 4%. If the state’s IUR

remains above 4% and continues to meet the 120% criterion, the state will continue

to be classified a high-unemployment state for an additional 13 weeks. This

classification process proceeds in 13-week increments for the life of the TEUC

program (currently slated to cease accepting new TEUC claims on May 31, 2003).

Individuals who exhaust their initial 13-week TEUC extension while their state is

classified as a high unemployment state are eligible to receive TEUC-X.

TEUC-X. The TEUC-X program temporarily lowers the IUR trigger rate from

5% to 4%. As long as the state’s IUR remains above 4%, individuals in that state are

eligible to receive TEUC-X. A check of the DoL TEUC trigger notice for the week

of January 19, 2003 reveals that only three states (Alaska, Washington and Oregon)

are eligible for the second tier of benefits, TEUC-X. Between the week of enactment

of P.L. 107-147 and the week of January 19, 2003 a total of 13 states had, at some

point, triggered on to TEUC-X. When the TEUC legislation was initially passed, it

was believed that TEUC-X would provide up to an additional 13-weeks of benefits

in more states than actually triggered.

Legislative Developments in the 108th Congress

The TEUC program had originally been scheduled to end December 28, 2002.

Near the end of the 107th Congress members debated whether or not to extend and/or

expand TEUC benefits. The 107th Congress adjourned without passing an extension

of the program. The TEUC program technically expired December 28, 2002.

However, 11 days later Congress passed, and the President signed, S. 23 (P.L. 108-1)

extending the program so that there would not be a lapse in benefits for eligible

TEUC beneficiaries.

On January 8, 2003, S. 23 (P.L. 108-1) was signed into law, extending the

TEUC program through the week ending May 31, 2003, and including a gradual a

phase-out period through August 30, 2003. Those with existing TEUC or TEUC-X

claims as of May 31, 2003, will be able to receive the remainder of their entitlement

through the week ending August 30, 2003. No new TEUC claims will be accepted

after May 31, 2003. P.L. 108-1 does not provide additional weeks of benefits to

individuals once they have exhausted their initial TEUC entitlement.

Several other bills containing provisions to extend or expand the TEUC program

were introduced on January 7, 2003 (H.R. 17, S. 35, H.R. 162, H.R. 209, H.R. 228).

H.R. 17 would extend the program through the week ending June 28, 2003, and

proposes a phase-out period through December 31, 2003. H.R. 17 would augment

the first tier of TEUC benefits by providing 26 weeks of benefits to all individuals

U.S. Department of Labor. Temporary Extended Unemployment Compensation Trigger

Notices. The most recent trigger notices are available online at

[http://www.workforcesecurity.doleta.gov/unemploy/teuc.asp].

CRS-16

eligible for TEUC. This would include those individuals who have already

exhausted 13 weeks of TEUC benefits. H.R. 17 also would reduce the amount of

TEUC-X benefits in high-unemployment states from 13 weeks to 7 weeks. H.R. 17

proposes two additional triggers: an adjusted insured unemployment rate (AIUR)

trigger; and a total unemployment rate (TUR) trigger that would apply to all states

(including states that do not currently have the TUR trigger included in state law).

S. 35 would extend the TEUC program to May 31, 2003, and proposes a phaseout period through December 31, 2003. S. 35 would also provide 26 weeks of

benefits to all individuals eligible for TEUC. Under S. 35, TEUC-X benefits for

high-unemployment states would remain at a 13 week maximum. H.R. 162 would

provide all TEUC recipients who exhaust either (or both) their TEUC or TEUC-X

benefits with another allotment of benefits equal to their original TEUC entitlement,

and would extend the program to January 1, 2004. H.R. 209 would extend the

TEUC program through April 1, 2003. H.R. 228 would extend the program to April

1, 2003, and proposes a new TUR trigger. This new trigger would allow states to

trigger on to TEUC-X if the state’s seasonally adjusted average TUR for fiscal year

2002 exceeds the seasonally adjusted average TUR in all states for the same period.

S. 106, introduced January 9, 2003, would extend the TEUC program to July 1, 2003

and proposes a phase-out period through the week ending September 27, 2003.

Legislative History in the 107th Congress

Proposals to Provide Temporary Extended Unemployment

Compensation. In the immediate aftermath of the September 11 attacks, Congress

focused on providing assistance to those workers who were displaced from jobs in

the most obviously affected industries, such as the airline and related industries.25

However, as the severity of the broader economic decline was revealed, the focus

shifted from industry-specific proposals to more comprehensive economic stimulus

initiatives, including temporary UC benefit extensions.

Broad proposals also included H.R. 3090, the Economic Security and Recovery

Act of 2001, passed by the House on October 24, 2001. H.R. 3090 provided for the

distribution of $9 billion from a federal trust fund account (EUCA) to the state

unemployment accounts. These funds could have been used for regular UC benefits,

or states could have elected to extend or expand UC benefits through March 11,

2003.

H.R. 3090 was reported by the Senate Finance Committee on November 9,

2001, with an amendment in the nature of a substitute. The amendment contained

provisions to extend UC benefits temporarily for up to 13 weeks for individuals who

exhaust their regular UC benefits, expand eligibility to cover part-time workers, and

supplement the regular UC weekly benefit amount by the larger of 15% or $25. The

Senate Finance Committee version of H.R. 3090 was considered by the Senate on

For additional information see CRS Report RS21047, Unemployment Related to Terrorist

Attacks: Proposals to Assist Affected Workers in the Airlines and Related Industries, by Paul

J. Graney.

CRS-17

November 14, 2001, but was not brought to a vote. The substitute amendment was

withdrawn by unanimous consent.

As a result of negotiations attempting to reach agreement on a stimulus package,

on December 20, 2001, the House passed H.R. 3529, the Economic Security and

Worker Assistance Act of 2001. Title VII of the bill, the Temporary Extended

Unemployment Compensation Act of 2001, would have provided up to 13 weeks of

extended benefits, available in any state, for individuals who become unemployed

after March 15, 2001, and who exhaust their regular benefits. H.R. 3529, a new

version of H.R. 3090, would also have transferred $9 billion in surplus federal

unemployment (Reed Act) funds to the states. These Reed Act funds could have

been used by the states to enlarge eligibility to include (1) individuals seeking parttime work, and (2) individuals who qualify under an alternative base period for

counting past wages.

On February 6, 2002, the Senate passed by unanimous consent and sent to the

House an amended version of H.R. 622. The amended of H.R. 622 included

provisions to extend UC benefits for up to 13 weeks to those individuals who have

exhausted their regular compensation since September 11, 2001.

On February 14, 2002, the House passed a third stimulus bill, an amended

version of the Senate-approved H.R. 622. The House-passed version of H.R. 622

included provisions for a 13-week extension of UC benefits, a $9 billion Reed Act

distribution to states, and 13 weeks of additional UC benefits in high unemployment

states. Also, on February 14, 2002, the Senate passed an amended version of the

House-approved H.R. 3090. The Senate-amended version of H.R. 3090 contained

provisions identical to those in the Senate-passed H.R. 622.

On, March 7, 2002, the House passed a fourth stimulus bill as a substitute

amendment to the Senate-amended version of H.R. 3090. The provisions in this bill

included a 13-week extension of UC benefits for all states, an extra 13 weeks (for a

possible extension of 26 weeks total) in high-unemployment states, and an $8 billion

Reed Act distribution to states. The Senate passed H.R. 3090 on March 8, 2002, and

the President signed H.R. 3090, the Job Creation and Worker Assistance Act of 2002,

into law (P.L. 107-147) on March 9, 2002.

Proposals to Amend the TEUC Program. Several bills were introduced

that would have amended various aspects of the TEUC program (these bills expired

with the end of the 107th Congress). S. 2714 was introduced July 9, 2002, and H.R.

5089 was introduced July 10, 2002. Both bills would have extended the first tier of

TEUC benefits to equal the lesser of the number of weeks an individual received

under regular UC or 26 times the individual’s average weekly benefit amount. S.

2714 and H.R. 5089 would also have extended the availability of the TEUC program

by 6 months to June 30, 2003.

S. 2892 was introduced August 1, 2002. S. 2892 would have extended the

availability of TEUC benefits by 6 months to June 30, 2003. S. 2892 would have

provided all eligible TEUC recipients with 26 weeks of first tier benefits. Under S.

2892, all individuals exhausting their regular UC benefits would have been eligible

for 26 weeks of TEUC benefits, regardless of their regular UC benefit entitlement.

CRS-18

S. 2892 would also have reduced the TEUC-X benefit duration from 13 weeks to 7

weeks.

S. 2892 would have revised the definition of the IUR to include individuals who

had exhausted26 their regular UC benefit during the most recent quarter. The new

definition, adjusted insured unemployment rate (AIUR), would have counted

individuals who had exhausted their regular UC benefits along with those who had

filed an initial claim for regular UC benefits. Thus, the new trigger definition would

have been: the average weekly number of people filing claims plus the average

weekly number of people exhausting their regular UC benefits, divided by the

average monthly covered employment. S. 2892 would have established an additional

trigger for states to trigger on to TEUC-X. This trigger would have allowed states

to trigger on to TEUC-X if the TUR was equal to or greater than: (1) 6%; and (2)

110% of the TUR for the same period in either (or both) of the past two years. S.

2892 would also have repealed the TEUC eligibility requirement that individuals

must have worked the equivalent of 20 weeks of full-time insured employment.

S. 3009 and H.R. 5491 were introduced September 26, 2002. Both bills would

have provided all eligible TEUC recipients with 26 weeks of first tier benefits and

would have reduced the TEUC-X benefits (second tier) in high-unemployment states

to 7 weeks. As with S. 2892, both S. 3009 and H.R. 5491 would have adjusted the

definition of IUR to include individuals who had exhausted their regular

unemployment compensation in the most recently completed quarter. This new

trigger mechanism would have allowed states to be classified as ‘highunemployment’ if their AIUR was equal to or greater than 4% and 120% of the prior

2-year average AIUR for the same period. S. 3009 and H.R. 5491 would also have

provided an additional extended benefit trigger based on the seasonally adjusted 3

month average TUR in all states. Under this provision, any state could have triggered

on to TEUC-X if their TUR was equal to or greater than 6% and 110% of the TUR

for the same period in either or both of the past 2 years. Both bills would have

extended the TEUC program until the last week of June 2003.

H.R. 5587, introduced October 9, 2002, proposed to extend the TEUC program

for high-unemployment states, and to allow individuals whose TEUC or TEUC-X

entitlement would otherwise be cut off by the December 28, 2002 expiration date of

the original TEUC legislation, to receive their full benefit entitlement. The bill

would have allowed those individuals who exhausted their TEUC allotment after

December 28, 2002 in high-unemployment states to receive an additional 13 weeks

of benefits. The bill would not have provided additional weeks to individuals who

exhausted regular UC, TEUC, or TEUC-X benefits after December 28, 2002 in states

that did not meet the high-unemployment triggers established by the original TEUC

legislation (P.L. 107-147). H.R. 5587 would not have provided benefit payments for

any weeks of unemployment after the week of April 1, 2003.

November 14, 2002, the Senate passed an amended version of H.R. 3529 that

contained provisions to extend the TEUC program through March 31, 2003, with a

Exhaustions are defined as the number of claimants drawing the final payment of their

original entitlement to a given program.

CRS-19

phase-out period continuing through June 28, 2003. The phase-out period would

have allowed anyone eligible for, or receiving benefits before March 31, 2003, to

finish out their TEUC entitlement. Under H.R. 3529, individuals who exhausted

either regular compensation, or the first tier of TEUC after March 31, 2003, would

not have been eligible to receive any further TEUC or TEUC-X benefits.

H.R. 5063 was passed by the House on November 14, 2002. H.R. 5063 would

have extended the TEUC program only in high-unemployment states, and allowed

individuals whose TEUC or TEUC-X entitlement would have been cut off by the

December 28, 2002 expiration date of the original TEUC legislation, to continue to

receive their TEUC allotment until February 2, 2003. Under H.R. 5063 (as under

H.R. 5587) individuals who exhausted regular UC (in a state not-classified as a highunemployment state) after December 28, 2002, would not have been eligible for any

additional weeks of benefits under the TEUC program.

H.R. 5731 was introduced in the House with provisions extending the TEUC

program through April 1, 2003, and introducing an alternative trigger mechanism for

states to qualify for the TEUC-X benefit tier. This alternative trigger mechanism

would have compared a state’s seasonally adjusted TUR with the average seasonally

adjusted TUR in all states during the same fiscal year. If an individual state’s

seasonally adjusted TUR was greater than the average of the national average

seasonally adjusted TUR, then the state would have been considered a highunemployment state and triggered TEUC-X.

CRS-20

Appendix. Detailed History and Benefit Structure

for the Emergency Unemployment

Compensation Program

Table 3. EUC Legislative History and Benefit Structure

Emergency Unemployment Compensation (EUC)

Law

Benefit tier

Emergency Unemployment

Compensation Act (P.L.

102-164) signed November

15, 1991

20 weeks: States with TUR of 9.5% or higher, or

AIUR of 5% or higher

Dates in

effecta

Superseded

by P.L.

102-182

13 weeks: States with AIUR of 4% or higher or

AIUR of 2.5% or higher and UC

exhaustion rate of 29% or higher

6 weeks:

All other states

Termination of Application

of Title IV of the Trade Act

of 1974 to Czechoslovakia

and Hungary (P.L. 102182) signed December 4,

1991, and Emergency

Unemployment Benefits

Extension (P.L. 102-244)

signed February 7, 1992

33 weeks: States with TUR of 9% or higher, or

AIUR of 5% or higher

Unemployment

Compensation

Amendments of 1992 (P.L.

102-318) signed July 3,

1992

26 weeks: States with TUR of 9% or higher or

AIUR of 5% or higher

Emergency Unemployment

Compensation

Amendments of 1993 (P.L.

103-6) signed March 4,

1993

Claims filed before September 12, 1993:

26 weeks: States with TUR of 9% or higher or

AIUR of 5% or higher

26 weeks: All 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]

20 weeks: All other states

November

17, 1991June 13,

1992

June 14,

1992March 6,

1993

March 7,

1993October 2,

1993

20 weeks: All other states

Claims filed on or after September 12, 1993b:

15 weeks: States with TUR of 9% or higher, or

AIUR of 5% or higher

10 weeks: All other states

Unemployment

13 weeks: States with TUR of 9% or higher, or October 3,

Compensation

AIUR of 5% or higher

1993Amendments of 1993 (P.L.

February 5,

103-152) signed November 7 weeks: All other states

1994c

25, 1993

“Dates in effect” refers to the date of first claim. A claimant received benefits for the period

established by the law in effect on the date of first claim.

This benefit reduction was triggered by the national TUR’s falling below 7% for 2 consecutive

months. Had the TUR fallen below 6.8% for 2 months, benefit weeks would have been reduced

to 13 and 7.

Payments for claims filed by this date could continue until the earlier of the exhaustion of the

claimant’s entitlement or April 30, 1994.

CRS-21

Table 4. EUC Benefit Duration (in weeks) by State and Lawa

State

Alabama

Alaska

Arizona

Arkansas

California

Colorado

P.L. 102-164,

P.L. 102-244

P.L. 102-182

P.L. 102-318

P.L. 103-6

P.L. 103-152

13, February

2, 1992--20

13, January

5, 1992--20

13, January 23,

1994--EB on

(13)b

26, November

1, 1992--20

26, July 19,

1992--20

February 21,

1993--26

Connecticut

Delaware

District of

Columbia

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

13, February

9, 1992--20

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

33, February

16, 1992--26

Montana

Nebraska

Nevada

26, March 8,

1992--33

26, March 8,

1992--33

June 6,

1992--26

15, July 4,

1993--10

10, March 28,

26, August 30, 1993--15, June

1992--20

27, 1993--10

26, August 2,

1992--20

26, October 25,

1992--20

7, March 27,

1994 EB on

(20)

10, March 7,

1993--15 June

12, 1993--10

CRS-22

P.L. 102-164,

P.L. 102-244

P.L. 102-182

New Hampshire

State

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

26, February

16, 1992--33

Oregon

13,

1/12/92--20

Pennsylvania

13, January

26, 1992--20

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

13, January

19, 1992--20

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

P.L. 102-318

P.L. 103-6

10,

March 7,

26, November 1993--15, June

22, 1992--20

13, 1993--10

26, July 12,

1992--20

P.L. 103-152

26, September

27, 1992--20

January 31,

1993--26

7, October 3,

1993--EB on

(13) February

26, 1994--EB

off

7, January 16,

1994--13

15, July 11,

1993--10

10, March 21,

26, August 16, 1993--15, June

1992--20

20, 1993--10

26, August 16,

1992--20

26, July 4,

1992--20

January 31,

1993--26

10, May 9,

1993--15

August 8,

1993--10

15, June 27,

1993--10

Source: Emergency Unemployment Compensation: the 1990’s Experience, Revised Edition, U.S.

Department of Labor Employment and Training Administration, UI Occasional Paper 99-4. January

1999. (Data on Puerto Rico and Virgin Islands not available.)

The italicized text in Table B shows the date the benefit duration changed and the new duration. For

example, a box reading 13, February 2, 1992–20 indicates that the original duration was 13

weeks, but that on February 2, 1992 the duration changed to 20 weeks because of a change in

that state’s IUR or TUR.

The notation EB indicates that the state triggered off EUC and triggered on to the permanent EB

program. For example, EB on (13), would indicate that a state had triggered on to the

permanent EB program with a 13 week duration; or a notation reading February 26, 1994–EB

off, indicates the state triggering off the permanent EB program.

CRS-23

Table 5. EUC Benefit Data, 1991-1994

State

United States

Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

District of Columbia

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Puerto Rico

Rhode Island

South Carolina

Number of First Number of Weeks

Number of

Paysa

Compensated

Exhaustees

(in thousands)

27,939

9,136

160,896

4,993

166

101

1,586

118

619

174

1,443

162

1,152

4,548

1,016

28,814

805

176

1,045

780

196

3,688

118

257

132

697

1,083

454

6,016

294

348

146

2,666

106

354

546

1,185

457

6,562

216

172

113

1,583

137

850

154

837

197

1,497

167

107

1,520

196

1,316

464

140

3,220

1,480

248

5,614

239

1,382

419

6,828

240

295

109

1,529

129

1,199

384

189

2,869

336

218

131

783

423

2,113

475

9,712

305

428

3,668

1,081

17,989

459

399

318

2,818

184

910

272

4,785

174

138

952

363

127

2,083

2,136

582

11,305

296

196

121

2,514

286

1,383

193

1,536

Benefits paid

($ millions)

CRS-24

State

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Virgin Islands

Washington

West Virginia

Wisconsin

Wyoming

Number of First Number of Weeks

Number of

Paysa

Compensated

Exhaustees

(in thousands)

284

176

2,511

1,262

507

7,752

302

351

354

297

231

2,010

507

171

3,075

171

1,135

Benefits paid

($ millions)

274

125

1,747

141

Source: Table prepared by CRS using data from the U.S. Department of Labor.

First pay is defined as the first payment in a benefit year for a week of unemployment claimed. This

measure is used as proxy for the number of “beneficiaries”.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.