What features of ARRA’s unemployment compensation provisions are the governors displeased with?
How much money are these provisions going to cost them? Interestingly, the $7.0 billion in potential incentive payments (some 14 percent of the estimated $50 billion) has generated the most public discussion and controversy since HR1 was enacted. Several governors say they will not make the indicated changes because of the implied long-run UI cost increases and the infringement upon state sovereignty in determining UI benefits. Q. If it won’t cost the states money for seven years, why are they so concerned about these changes? Many describe the UI program as having two clients: claimants who receive benefits and employers whose payroll taxes finance the program. From their public statements, the governors voicing the objections apparently feel a greater sense of responsibility to their employer community than to their claimant community. Many of the states that are objecting currently have among the nation’s lowest effective UI tax rates and the lowest UI recipiency rates. Their tax ra
