Rep. Davis, Sen. Durbin, and Rep. Schneider Champion Bill to Help Illinois Recover from the Pandemic by Waiving Interest on Federal Unemployment Loans

 Rep. Davis, Sen. Durbin, and Rep. Schneider Champion Bill to Help Illinois Recover from the Pandemic by Waiving Interest on Federal Unemployment Loans

Representative Danny K. Davis (D-IL) joined with Senator Dick
Durbin (D-IL) and Representative Brad Schneider (D-IL) to champion 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.

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.

Given that the pandemic continues, Illinois and other states continue to need financial relief to improve their recovery. 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.

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