Durbin, Duckworth, Davis, Schneider Champion Bill To Help Illinois Recover From The Pandemic By Waiving Interest On Federal Unemployment Loans

Statement

U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Senator Tammy Duckworth (D-IL) joined Representatives Danny K. Davis (D-IL) and Brad Schneider (D-IL) to introduce the Continued Waiver of Interest on State Unemployment Loans during the Pandemic Act. This legislation would extend the waiver of interest payments on federal unemployment loans during the pandemic to help Illinois and other states financially as they support their constituents and respond to the dual economic and health crises.

The bill would extend the period of interest-free loans from September 6, 2021, to September 30, 2022. The provision is set up to be contiguous with the date of the lapse of the interest-free waiver, meaning there would be no gap in the relief to states. It would operate retroactively as if the interest-free nature had never expired. A further extension of the waiver on unemployment loan interest will improve state and business recovery in many states.

"Illinoisans endured incredible hardships during the pandemic," said Durbin. "To ease the financial burden on Illinois and other states, we must extend the waiver of interest payments on federal unemployment loans. By extending the waiver, we can give our communities time to recover from the economic pain of the pandemic."

"It's important that the Federal Government provide states like Illinois with every tool necessary to continue addressing the painful job losses from COVID-19," said Duckworth. "I'm proud to help introduce this bill that would make it easier for our state and our businesses to emerge stronger than ever from this pandemic by waiving the interest on federal unemployment loans."

"States are on the front lines of helping Americans and businesses recover from the pandemic," said Davis. "The scars from the pandemic are deep. States are just recovering and addressing many urgent priorities. Employers are just recovering and adjusting their policies to meet consumer demands and the needs of workers. The suspension of interest gives states more time to cope with the effects of the pandemic, strengthen their economies, and thoughtfully reform their unemployment financing for the long term without suddenly increasing employer taxes or diverting tens of millions of dollars that could be used for economic recovery."

"States took extraordinary measures the last two years to power our economy back from the brink of global recession to the strongest recovery in the world," said Schneider. "Now, states like Illinois are asking for help. The federal government will be responsible and measured in providing a predictable path back to normalcy for our states. They should be working to help people and businesses recover, not to pay back interest to the federal government."

"The meter should not keep running for taxpayers as states like Illinois wrestle with how to pay back the costs of the COVID-19 pandemic," said Illinois Comptroller Susana A. Mendoza. "That's why I reached out to my counterparts in seven other states to organize support for extending the interest waiver on unemployment advances. This pandemic has lingered far longer than many expected. Prematurely ending that waiver is piling more costs on taxpayers' backs and diverting precious state resources from the critical mission of job creation and economic growth. I fully support and welcome the legislation Congressmen Davis and Schneider and Senator Durbin are working on and urge the rest of the Illinois Congressional delegation to join them."

Congress has waved the interest on unemployment loans three times during the pandemic. Multiple state comptrollers -- led by Illinois State Comptroller Susana Mendoza -- raised the need for the federal government to extend the waiver on the interest on these loans since the country is still grappling with the pandemic and since states continue to cope with the financial consequences of these dual crises. Indeed, the National Association of State Workforce Agencies supports a continued moratorium on interest accrual and payments because, if required to pay the interest, states will be forced to either increase employer unemployment taxes or divert state resources that could be used for economic recovery. The business community also supports the waiver extension. The increased unemployment resulted from the pandemic, not from the normal functioning of the labor market or the actions of employers.

"Manufacturers applaud Congressman Davis and Senator Durbin for leading efforts to waive interest on Illinois' massive $4.5 billion unemployment insurance debt. This action could save Illinois tens of millions of dollars in interest payments that could be better spent for economic development, education, or health care," said Mark Denzler, President & CEO, Illinois Manufacturers' Association.

"As Illinois strives to address the staggering unemployment insurance trust fund deficit as a result of the pandemic, the members of the Illinois Retail Merchants Association (IRMA) appreciate the leadership of Senator Durbin and Congressman Davis to extend the interest waiver and allow funds to be directed toward solving the deficit problem," said Rob Karr, President & CEO, Illinois Retail Merchants Association.

"The Chamber is proud to support this bill and the meaningful relief it will provide to states and businesses," said Stephanie Ferguson, Senior Manager, Policy, U.S. Chamber of Commerce.

The Continued Waiver of Interest on State Unemployment Loans during the Pandemic Act is supported by the National Association of State Workforce Agencies, whose membership is comprised of workforce agencies in all 50 states, as well as multiple business organizations, including: the Illinois Manufacturers' Association; the Illinois Retail Merchants Association; and the U.S. Chamber of Commerce.

The legislation was also cosponsored by Senators Michael Bennet (D-CO), Richard Blumenthal (D-CT), Kirsten Gillibrand (D-NY), and Tina Smith (D-MN).

Source