"Sequestration" is a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals. Currently, sequestration is being used as an enforcement tool under the Budget Control Act of 2011 (BCA; P.L. Certain federal programs are exempt from sequestration, and special rules govern the effects of sequestration on other programs. Which Types of Unemployment Insurance Benefits Are Affected by the Sequester? 112-25 ) and first implemented on March 1, 2013 (delayed by P.L. 112-240 ), affects some but not all types of unemployment insurance (UI) benefits. Benefits from the regular Unemployment Compensation (UC), Unemployment Compensation for Ex-Servicemembers (UCX), and Unemployment Compensation for Federal Employees (UCFE) programs are exempt and not subject to the sequester reductions. Extended Benefits (EB) and the temporary, now-expired Emergency Unemployment Compensation (EUC08)—as well as most forms of UI administrative funding—are not exempt from the sequester, however, and, therefore, are subject to the sequester reductions. This DOL guidance outlines how states, which administer UI benefits, must reduce all EB and EUC08 benefits, when that program was authorized. What Are the Consequences of the Sequester for Nonexempt UI Benefits in FY2015? However, under federal law, a state may choose to reduce EB benefits by the amount sequestered if the state changes its state unemployment law and the reduction is equivalent to the sequester reduction. EB benefits were not available in any state in FY2014.
"Sequestration" refers to a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals. Most recently, sequestration was triggered by the Budget Control Act of 2011 (BCA; P.L. 112-25) and first implemented on March 1, 2013 (delayed by P.L. 112-240).
Some, but not all, types of unemployment insurance (UI) benefits are subject to reductions under the BCA sequester. Regular Unemployment Compensation (UC), Unemployment Compensation for Ex-Servicemembers (UCX), and Unemployment Compensation for Federal Employees (UCFE) benefits are specifically exempt from the sequester reductions. UI payments from the Extended Benefit (EB) and now-expired Emergency Unemployment Compensation (EUC08) programs, however, are subject to the sequester reductions. States administer all types of UI benefits. Therefore, states are responsible for carrying out the sequester reduction in UI benefit payments. The amount and method by which a UI recipient's benefit is reduced varies by state and the date the reduction begins.
This report provides brief answers to some frequently asked questions regarding sequestration and unemployment insurance benefits.
Additional information on UI programs and benefits is available in CRS Report RL33362, Unemployment Insurance: Programs and Benefits, by [author name scrubbed] and [author name scrubbed]; and CRS Report R42444, Emergency Unemployment Compensation (EUC08): Status of Benefits Prior to Expiration, by [author name scrubbed] and [author name scrubbed].
Additional information on modifications to UI programs and benefits as a result of recent changes to state laws is available in CRS Report R41859, Unemployment Insurance: Consequences of Changes in State Unemployment Compensation Laws, by [author name scrubbed].
More general information on the sequester is available in CRS Report R42050, Budget "Sequestration" and Selected Program Exemptions and Special Rules, coordinated by [author name scrubbed].