ABSTRACT
The federal-state unemployment compensation system supports both regular and extended benefit programs. The reconciliation act sought to control spending from the unemployment insurance trust fund by restricting eligibility for the extended benefits program and by discouraging state borrowing of federal funds. This chapter describes the broad federal program guidelines but will not attempt to describe specific state criteria. Activities of the unemployment compensation system flow through the unemployment trust fund, consisting of trust funds of the individual states and the federal government. The federal government has little direct control over the unemployment compensation system. Expenditures from the trust fund are subject to the unemployment rate, with the magnitude of the expenditures determined primarily by state eligibility criteria and benefit levels. The major problem facing the trust fund at the time of the reconciliation act was uncertain financial solvency.
