White House spokesman Robert Gibbs says the economic downturn has placed heavy pressure on states, many of which have had to deplete their unemployment insurance trust funds. The administration is recommending that, starting in 2014, the taxable income levels used to tax businesses for the jobless assistance would increase from $7,000 to $15,000.
The plan would also impose a moratorium on state unemployment insurance tax increases through 2012. Gibbs said states shouldn't be increasing taxes as the recovery remains fragile. He rejected suggestions that the plan amounted to a bailout of states.