The Impact of the FRA Rescission on Unemployment Insurance Modernization Grants

Update: This brief was updated September 7, 2023 to reflect an equity grant awarded to Georgia on August 31, 2023, and to correct the equity grant amount in Table 1 for Virginia.

The American Rescue Plan Act of 2021 (ARP) appropriated $2 billion to the Department of Labor (DOL) “to detect and prevent fraud, promote equitable access, and ensure the timely payment of benefits with respect to unemployment compensation programs.” The funds were “to remain available until expended.” Two years later, however, the Fiscal Responsibility Act of 2023 (FRA, P.L. 118-5) rescinded $1 billion of those funds. Four distinct grant offerings have been affected:

1. Fraud prevention and overpayment recovery in all unemployment insurance (UI) programs
2. Promoting equitable access to UI programs
3. Tiger Team consultative agreement implementation
4. UI information technology (IT) modernization

This brief discusses the cancellations or modifications to these programs to accommodate the rescission and summarizes new opportunities DOL is offering with remaining ARP funds. Applications for most of these new opportunities are due August 18.