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1 Cost of the Extension of Expanded Unemployment Compensation 1 (July 16, 2021)

handle is hein.congrec/cbocexex0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Phillip L. Swagel, Director U.S. Congress Washington, DC 20515 July 16, 2021 Honorable Kyrsten Sinema United States Senate Washington, DC 20510 Re: Cost of the Extension of Expanded Unemployment Compensation Dear Senator: This letter responds to your interest in the projected cost of the extension of expanded unemployment compensation as enacted in the American Rescue Plan Act of 2021 (ARPA). Legislation enacted in response to the coronavirus pandemic significantly expanded unemployment compensation by increasing the amount of the benefits, enlarging the pool of eligible workers, and extending the length of time that beneficiaries can receive assistance. That expansion was scheduled to expire in March 2021 and ARPA extended it until September 2021. In its recently published budget projections, CBO included mandatory outlays for the expansion totaling $144 billion in 2021 and $8 billion in 2022.1 That estimated cost is $50 billion less in 2021, and $3 billion less in 2022, than anticipated in the agency's March 2021 cost estimate.2 CBO reduced its projections of those costs for two major reasons. First, several states have announced that they are discontinuing one or more of the components of expanded unemployment compensation before the expansion's authorization ends in September 2021. In its original estimate, CBO projected that all states would participate in the programs until September. Second, because of the improving economy, the agency has lowered its forecast of the unemployment rate, resulting in fewer projected beneficiaries for the programs; that also reduced projected costs. 1. See Congressional Budget Office, An Update to the Budget and Economic Outlook (July 2021), www.cbo.gov/publication/572 l8. 2. See Congressional Budget Office, estimated budgetary effects of H.R. 1319, the American Rescue Plan Act of 2021 (March 10, 2021), www cbgov/publication/57 056.

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