Overview
- Rep. Vince Fong, who filed the bill Tuesday, seeks to require any state with an unpaid federal unemployment loan to prioritize paying down that debt.
- The proposal orders eligible federal funds to be sent to repayment within five business days of receipt, with misuse triggering repayment of the full amount to the U.S. government.
- California is the only state still unpaid, with the balance reported around $21–22 billion and projected to reach about $22–23 billion by year’s end.
- Because the state missed the two-year repayment window set in federal law, employers face automatic payroll-tax hikes of $42 per worker this year, rising to $63 in 2027 and increasing by $21 each year until the debt is cleared.
- State spending has gone to interest rather than principal, with about $1.8 billion paid since 2021 and $668 million planned this year, as the Labor Department’s February strike team examines fraud and weak controls flagged by state auditors.