STEWARDSHIP INVESTMENTS IN HUMAN CAPITAL
Stewardship investments are made by the DOL for the nation's benefit.
For accounting purposes, these investments are expensed as incurred, and
reflected in the net cost of the DOL's operations. Stewardship investments
provide long term benefits which cannot be measured in traditional financial
reports.
The DOL's stewardship investments are in human capital, reported as
expenses in the net cost of the DOL's employment and training programs. These
investments are intended to maintain or increase national economic productive
capacity, as demonstrated by program outputs and outcomes. Within the DOL, the
Employment and Training Administration and the Veterans' Employment and
Training Service administer programs which invest in human capital, as
discussed below.
Employment and Training Administration
The U.S. Department of Labor, Employment and Training Administration's
(ETA) Federal investment in human capital comprises expenses incurred for
training and employment services enacted under the Workforce Investment Act of
1998 (WIA), the Job Training Partnership Act, as amended (JTPA), the Trade Act
of 1974, as amended (Trade Act), the School-To-Work Opportunities Act of 1994,
as amended (STW), and the Balanced Budget Act of 1997, as amended. This
investment is made for the general public and the expenses incurred are
intended to increase or maintain national economic productive capacity. The
ETA's investment in human capital for fiscal years 1998 to 2002, excluding the
cost of internal Federal education and training is presented below.
Text version
A brief description of the programs under each Act is as follows:
Workforce Investment Act (Successor legislation to the JTPA)
- Youth Activities - Grants to provide financial assistance to
States and U.S. territories to design and operate workforce investment
activities for eligible youth.
- Adult and Dislocated Worker Employment and Training Actvities
- Grants to provide financial assistance to States and U.S. territories to
design and operate training programs for low income adults and re-employment
services and retraining assistance to individuals dislocated from their
employment.
- Job Corps - Nationwide program carried out in partnership with
States and communities to assist eligible youth to become more responsible,
employable, and productive citizens.
- National Programs - Grants to provide financial assistance in
support of employment and training activities and opportunities for Native
Americans, Migrant and Seasonal Farmworkers, Veterans and Disadvantaged Youth.
Job Training Partnership Act (Antecedent legislation to the
WIA)
- Adult Employment and Training - Grants to provide financial
assistance to States and U.S. territories to design and operate training
programs for low income adults.
- Dislocated Worker Employment and Training - Grants to provide
re-employment services and retraining assistance to individuals dislocated from
their employment.
- Youth Training - Grants to provide financial assistance to
States and U.S. territories to design and operate training programs for
economically disadvantaged youth.
- Summer Youth Employment and Training - Grants to operate
programs of employment and opportunities, as well as academic enrichment for
economically disadvantaged youth during the summer months.
- Native Americans - Grants to Indian tribes and other Native
American groups to provide training, work experience, and other
employment-related services to Native Americans.
- Migrant and seasonal farm workers - Grants to public agencies
and nonprofit groups to provide training and other employability development
services to economically disadvantaged families whose principal livelihood is
gained in migratory and other forms of seasonal farm work.
- Veterans Employment - Grants or contracts to provide disabled,
Vietnam era, and recently separated veterans with programs to meet their unique
employment and training needs.
- National Activities - Provides program support for JTPA
activities and nationally administered programs for segments of the population
that have special disadvantages in the labor market.
Trade Act of 1974
- Trade Adjustment Assistance - Adjustment assistance, including
cash weekly benefits, training, job search, and relocation allowances provided
to workers as authorized by the Trade Act of 1974, as amended.
- North American Free Trade Agreement (NAFTA) - Transition
adjustment assistance, including weekly cash benefits, training, job search,
and relocation allowances provided to workers determined to be adversely
affected as a result of the NAFTA as authorized by the Trade Act of 1974, as
amended.
School-To-Work Opportunities Act
- School-To-Work Opportunities - Grants to States and
localities, jointly administered by the DOL and U.S. Department of Education to
build systems that provide youth with the knowledge and skills necessary to
make an effective transition from school to careers through work-based
learning, school-based education, and connecting activities.
Balanced Budget Act of 1997
- Welfare-To-Work Opportunities - Grants to States and
localities, jointly administered by the DOL and U.S. Department of Health and
Human Services to build programs to provide recipients receiving assistance
under State funded programs with the knowledge and skills necessary to make an
effective transition to unsubsidized employment opportunities.
Veterans' Employment and Training Service
The mission of Veterans' Employment and Training Service (VETS) is to
provide veterans with the resources and services to succeed in the 21st Century
workforce, by maximizing their employment opportunities, protecting their
employment rights, and meeting labor market demands with qualified veterans.
The Agency's vision is embodied in this statement: Veterans succeeding in the
21st Century Workforce.
VETS can be classified into two main areas, Career Counseling and
Employment Services, and Transition and Reemployment Services. Brief
descriptions follow:
Career Counseling and Employment Services
Disabled Veterans Outreach Program Specialist (DVOP) - This
program is codified at 38 U.S.C. 4103A. DVOP grants are made to State Workforce
Agencies (SWAs) according to a distribution formula prescribed by law. DVOP
staff provide counseling, assessment, lifelong learning skills and/or referral
to training for veterans, particularly those with disabilities or recently
separated from the military.
Local Veterans' Employment Representative (LVER) - This program
is codified at 38 U.S.C. 4104. The program provides grants to SWAs for the
appointment of LVER staff positions identified in Job Service local offices and
One-Stop Career Centers to enhance the services provided to veterans through
oversight, technical support, and direct provision of services. LVER staff help
veterans into productive employment through lifelong learning services.
Homeless Veterans' Reintegration Project (HVRP) - The HVRP,
codified at 38 U.S.C. 2021, provides employment assistance to homeless veterans
through grants to both urban and other areas.
Veterans' Workforce Investment Program (VWIP) - The VWIP,
codified at 29 U.S.C. 2913, provides targeted veterans training and/or
employment opportunities. The program targets service connected disabled
veterans, recently separated, campaign badge veterans and veterans with
significant employment barriers.
Transition and Reemployment Services
Transition Assistance Program (TAP) - Authority for TAP is
provided in 10 U.S.C. 1144. TAP operates as a partnership between the
Departments of Labor, Defense, and Veterans Affairs. This partnership also
exists at the local level, where memoranda of understanding spell out the
responsibilities of SESAs, military installations, VETS staff and VA
facilities. The program provides separating service members and their spouses
or individuals retiring from military service with career counseling and
training on becoming productive members of society through employment.
Uniformed Services Employment and Reemployment Rights and Veteran's
Preference Rights (USERRA) - is codified at 38 U.S.C. Chapter 43. The
Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)
succeeded Veterans' Reemployment Rights statutes. USERRA continues to protect
civilian job rights and benefits for veterans, members of the National Guard
and Reserves. Veteran's Preference for Federal employment is codified in 5
U.S.C. 2108. VETS educates both employee and employer so they better understand
the rights of the individuals and promotes a more productive relationship
between employer and employee.
The full cost of VETS major programs is presented below. Full costs
include all direct program costs and those indirect costs which can reasonably
be assigned or allocated to the program.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,582 |
$ |
84,681 |
$ |
81,956 |
Local Veterans' Employment Representative
|
|
77,977 |
|
80,155 |
|
78,753 |
25,635
|
|
27,970
|
|
25,500
|
|
|
|
|
|
|
$ |
186,194 |
$ |
192,806 |
$ |
186,209 |
A summary of program outputs is presented below.
2002 |
2001 |
2000 |
|
|
|
120,400 |
131,000 |
146,000 |
15,057 |
16,000 |
17,500 |
7,107 |
8,000 |
8,600 |
584,719 |
581,000 |
568,000 |
|
|
|
128,450 |
138,700 |
156,700 |
13,533 |
14,000 |
14,800 |
6,233 |
6,500 |
6,900 |
639,694 |
733,600 |
632,600 |
|
|
|
104,000 |
112,000 |
121,384 |
3,151 |
3,181 |
3,121 |
|
|
|
5,436 |
3,200 |
4,981 |
54,050 |
- |
- |
SOCIAL INSURANCE PROGRAMS
The Federal Accounting Standards Advisory Board (FASAB) has classified
certain government income transfer programs as social insurance programs.
Recognizing that these programs have complex characteristics that do not fit
traditional accounting models, the FASAB has developed accounting standards for
social insurance programs which require the presentation of supplementary
information to facilitate the assessment of the program's long term
sustainability.
The U.S. Department of Labor operates two programs classified under
Federal accounting standards as social insurance programs, the Unemployment
Insurance Program and the Black Lung Disability Benefits Program. Presented
below is the supplementary information for the two programs.
UNEMPLOYMENT INSURANCE PROGRAM
The Unemployment Insurance (UI) Program was created in 1935 to provide
income assistance to unemployed workers who lose their jobs through no fault of
their own. The program protects workers during temporary periods of
unemployment through the provision of unemployment compensation benefits. These
benefits replace part of the unemployed worker's lost wages and, in so doing,
stabilize the economy during recessionary periods by increasing the
unemployed's purchasing power. The UI program operates counter cyclically, with
benefits exceeding tax collections during recessionary periods and UI tax
revenues exceeding benefit payments during periods of recovery.
Program Administration and Funding
The UI program is administered through a unique system of Federal-State
partnerships, established in Federal law but executed through conforming State
laws by State officials. The Federal government provides broad policy guidance
and program direction through the oversight of the U.S. Department of Labor,
while program details are established through individual State UI statutes,
administered through State UI agencies.
Federal and State unemployment taxes
The UI program is financed through the collection of Federal and State
unemployment taxes levied on subject employers and deposited in the
Unemployment Trust Fund (UTF). The UTF was established to account for the
receipt, investment and disbursement of unemployment taxes. Federal
unemployment taxes are used to pay for the administrative costs of the UI
program, including grants to each State to cover the costs of State UI
operations and the Federal share of extended UI benefits. Federal unemployment
taxes are also used to maintain a loan account within the UTF, from which
insolvent States may borrow funds to pay UI benefits. State UI taxes are used
exclusively for the payment of regular UI benefits, as well as the State's
share of extended benefits.
Federal unemployment taxes
Under the provisions of the Federal Unemployment Tax Act (FUTA), a
Federal tax is levied on covered employers, at a current rate of 6.2% of the
first $7,000 in annual wages paid to each employee. This Federal tax rate is
reduced by a credit of up to 5.4%, granted to employers paying State UI taxes
under conforming State UI statutes. Accordingly, in conforming States,
employers pay an effective Federal tax of 0.8%. Federal unemployment taxes are
collected by the Internal Revenue Service.
State unemployment taxes
In addition to the Federal tax, individual States finance their UI
programs through State tax contributions from subject employers based on the
wages of covered employees. (Three States also collect contributions from
employees). Within Federal confines, State tax rates are assigned in accordance
with an employer's experience with unemployment. Actual tax rates vary greatly
among the States and among individual employers within a State. At a minimum,
these rates must be applied to the Federal tax base of $7,000; however, States
may adopt a higher wage base than the minimum established by FUTA. State UI
agencies are responsible for the collection of State unemployment
taxes.
Unemployment Trust Fund
Federal and State UI taxes are deposited into designated accounts within
the Unemployment Trust Fund. The UTF was established under the authority of
Title IX, Section 904 of the Social Security Act of 1935, as amended, to
receive, hold, invest, loan and disburse Federal and State UI taxes. The U.S.
Department of the Treasury acts as custodian over monies deposited into the
UTF, investing amounts in excess of disbursing requirements in Treasury
securities. The UTF is comprised of the following accounts:
Federal Accounts
The Employment Security Administration Account (ESAA) was
established pursuant to Section 901 of the Act. All tax receipts collected
under the Federal Unemployment Tax Act (FUTA) are appropriated to the ESAA and
used to pay the costs of Federal and State administration of the unemployment
insurance program and veterans employment services, as well as 97 percent of
the costs of the State employment services. Excess balances in ESAA, as defined
under the Act, are transferred to other Federal accounts within the Fund, as
described below.
The Federal Unemployment Account (FUA) was established pursuant
to Section 904 of the Act. FUA is funded by any excesses from the ESAA as
determined in accordance with Section 902 of the Act. Title XII, Section 1201
of the Act authorizes the FUA to loan Federal monies to State accounts that are
unable to make benefit payments because the State UI account balance has been
exhausted. Title XII loans must be repaid with interest. The FUA may borrow
from the ESAA or EUCA, without interest, or may also receive repayable
advances, with interest, from the general fund of the U.S. Treasury, when the
FUA has a balance insufficient to make advances to the States.
The Extended Unemployment Compensation Account (EUCA) was
established pursuant to Section 905 of the Act. EUCA provides for the payment
of extended unemployment benefits authorized under the Federal-State Extended
Unemployment Compensation Act of 1970, as amended. Under the extended benefits
program, extended unemployment benefits are paid to individuals who have
exhausted their regular unemployment benefits. These extended benefits are
financed one-half by State unemployment taxes and one-half by FUTA taxes from
the EUCA. The EUCA is funded by a percentage of the FUTA tax transferred from
the ESAA in accordance with Section 905(b)(1) and (2) of the Act. The EUCA may
borrow from the ESAA or the FUA, without interest, or may also receive
repayable advances from the general fund of the Treasury when the EUCA has a
balance insufficient to pay the Federal share of extended benefits. During
periods of sustained high unemployment, the EUCA may also receive payments and
non-repayable advances from the general fund of the Treasury to finance
emergency unemployment compensation benefits. Emergency unemployment benefits
require Congressional authorization.
The Federal Employees Compensation Account (FECA) was
established pursuant to Section 909 of the Act. The FEC account provides funds
to States for unemployment compensation benefits paid to eligible former
Federal civilian personnel and ex-service members. Generally, benefits paid are
reimbursed to the Federal Employees Compensation Account by the various Federal
agencies. Any additional resources necessary to assure that the account can
make the required payments to States, due to the timing of the benefit payments
and subsequent reimbursements, will be provided by non-repayable advances from
the general fund of the Treasury.
State Accounts
Separate State Accounts were established for each State and
territory depositing monies into the Fund, in accordance with Section 904 of
the Act. State unemployment taxes are deposited into these individual accounts
and may be used only to pay State unemployment benefits. States may receive
repayable advances from the FUA when their balances in the Fund are
insufficient to pay benefits.
Railroad Retirement Accounts
The Railroad UI Account and Railroad UI Administrative
Account were established under Section 904 of the Act to provide for a
separate unemployment insurance program for railroad employees. This separate
unemployment insurance program is administered by the Railroad Retirement
Board, an agency independent of DOL. DOL is not responsible for the
administrative oversight or solvency of the railroad unemployment insurance
system. Receipts from taxes on railroad payrolls are deposited in the Railroad
UI Account and the Railroad UI Administrative Account to meet benefit payment
and related administrative expenses.
UI program benefits
The UI program provides regular and extended benefit payments to
eligible unemployed workers. Regular UI program benefits are established under
State law, payable for a period not to exceed a maximum duration. In 1970,
Federal law began to require States to extend this maximum period of benefit
duration by fifty percent during periods of high unemployment. These extended
benefit payments are paid equally from Federal and State accounts.
Regular UI benefits
There are no Federal standards regarding eligibility, amount or
duration of regular UI benefits. Eligibility requirements, as well as benefit
amounts and benefit duration are determined under State law. Under State laws,
worker eligibility for benefits depends on experience in covered employment
during a past base period, which attempts to measure the workers' recent
attachment to the labor force. Three factors are common to State eligibility
requirements: (1) a minimum duration of recent employment and earnings during a
base period prior to unemployment, (2) unemployment not the fault of the
unemployed, and (3) availability of the unemployed for work.
Benefit payment amounts under all State laws vary with the worker's
base period wage history. Generally, States compute the amount of weekly UI
benefits as a percentage of an individual's average weekly base period
earnings, within certain minimum and maximum limits. Most States set the
duration of UI benefits by the amount of earnings an individual has received
during the base period. Currently, almost all States have established the
maximum duration for regular UI benefits at 26 weeks. Regular UI benefits are
paid by the State UI agencies from monies drawn down from the State's account
within the Unemployment Trust Fund.
Extended UI benefits
The Federal/State Extended Unemployment Compensation Act of 1970
provides for the extension of the duration of UI benefits during periods of
high unemployment. When the insured unemployment level within a State, or in
some cases total unemployment, reaches certain specified levels, the State must
extend benefit duration by fifty percent, up to a combined maximum of 39 weeks.
Fifty percent of the cost of extended unemployment benefits is paid from the
Extended Unemployment Compensation Account within the UTF, and fifty percent by
the State, from the State's UTF account.
Emergency UI benefits
During prolonged periods of high unemployment, Congress may authorize
the payment of emergency unemployment benefits to supplement extended UI
benefit payments. Emergency benefits are currently being paid under the
Temporary Extended Unemployment Compensation Act. Emergency benefit payments in
excess of $8 billion have been paid since March, 2002. The benefits under this
program are paid from Federal unemployment taxes and general fund
appropriations in EUCA.
Federal UI benefits
Unemployment benefits to unemployed Federal workers are paid from the
Federal Employment Compensation Account within the Unemployment Trust Fund.
These benefit costs are reimbursed by the responsible Federal agency and are
not considered to be social insurance benefits. Federal unemployment
compensation benefits are not included in this discussion of social insurance
programs.
Program Finances and Sustainability
At September 30, 2002, total assets within the UTF exceeded liabilities
by $67.4 billion. This fund balance approximates the accumulated surplus of tax
revenues and earnings on these revenues over benefit payment expenses and is
available to finance benefit payments in future periods when tax revenues may
be insufficient. Treasury invests this accumulated surplus in Federal
securities. The net value of these securities at September 30, 2002 was $68.3
billion. These investments accrue interest, which is distributed to eligible
State and Federal accounts within the UTF. Interest income from these
investments during FY 2002 was $5.1 billion. Federal and State UI tax and
reimbursable revenues of $27.6 billion and regular, extended and emergency
benefit payment expense of $50.6 billion were recognized for the year ended
September 30, 2002.
As discussed in Note 1.N.1 to the consolidated financial statements, DOL
recognized a liability for regular, extended and temporary extended
unemployment benefits to the extent of unpaid benefits applicable to the
current period. Accrued unemployment benefits payable at September 30, 2002
were $2.1 billion.
Effect of Projected Cash Inflows and Outflows on the Accumulated Net
Assets of the UTF
The ability of the UI program to meet a participant's future benefit
payment needs depends on the availability of accumulated taxes and earnings
within the UTF. The Department measures the effect of projected benefit
payments on the accumulated net assets of the UTF, under an open group
scenario, which includes current and future participants in the UI program.
Future estimated cash inflows and outflows of the UTF are tracked by the
Department for budgetary purposes. These projections allow the Department to
monitor the sensitivity of the UI program to differing economic conditions, and
to predict the program's sustainability under varying economic assumptions.
Presented on the following pages is the effect of projected economic
conditions on the net assets of the UTF, excluding the Federal Employees
Compensation Account.
Charts I and II graphically depict the effect of expected economic
conditions on the UTF over the next ten years
Projected Cash Inflows and Outflows Under Expected Economic
Conditions
Chart I depicts projected cash inflows and outflows of the UTF over
the next ten years, under expected economic conditions. Both cash inflows and
cash inflows excluding interest earnings are displayed. Current estimates by
the Department are based on an expected unemployment rate of 5.68% during FY
2003, decreasing to 4.90% in FY 2008 and thereafter. Cash outflows exceed cash
inflows combined with interest earnings for FY 2003. Positive cash flows resume
in FY 2004, peaking at $7.9 billion in FY 2007 and decreasing to $1.3 billion
in FY 2012, indicating that States have replenished their funds to desired
levels
These projections, excluding interest earnings, indicate net cash
outflows in FY 2003 and FY 2004, then net cash inflows for the next four years.
Due to projected transfers of excess Federal funds to the States starting in
2008, which tends to depress state tax collections, there is crossover back to
net outflows in FY 2009. The result is that the fund must rely on interest
earnings to keep growing.
Text version
Chart I
Effect of Projected Cash Inflows and Outflows on the Accumulated Net
Assets of the UTF - Continued
Effect of Expected Cash Flows on UTF Assets
Chart II demonstrates the effect of these expected cash inflows and
outflows on the net assets of the UTF over the ten year period ended September
30, 2012. Yearly projected total cash inflows, including interest earnings, and
cash outflows are depicted, as well as the net effect of this cash flow on UTF
assets.
Total cash outflows exceed cash inflows during 2003. Total cash
inflows exceed cash outflows in each of the next nine years projected, with
this excess peaking in 2007 and decreasing every year thereafter. Net UTF
assets decrease to $59.6 billion in FY 2003 but increase by 57% over the next
nine years to $93.5 billion by the end of FY 2012.
Text version
Chart II
Recessionary Scenarios
Charts III and IV demonstrate the effect on accumulated UTF assets of
projected total cash inflows and cash outflows of the UTF over the ten year
period ending September 30, 2012, under mild and severe recession scenarios.
Each scenario uses an open group, which includes current and future
participants in the UI program. Charts III and IV assume increased rates of
unemployment during mild and deep periods of recession.
Effect on UTF Assets of Mild Recession
The Department projects the effect of moderate recession on the cash
inflows and outflows of the UTF. Under this scenario, which utilizes an
unemployment rate peaking at 7.43% in FY 2004, net cash outflows are projected
in FY 2003 through FY 2005. Net cash inflows are reestablished in FY 2006 and
peak in FY 2007 with a drop in the unemployment rate to 5.63%.
The crossover pattern discussed above remains the same, even without
including interest earnings, until the final year of the projections. At this
point, when cash outflows are marginally less than total cash inflows and
marginally exceeds cash inflows without interest, the states have replenished
their funds to the desired level and growth of the fund slows.
Text version
Chart III
Effect on UTF Assets of Deep Recession
The Department also estimates the effect of severe recession on the
cash inflows and outflows of the UTF. This scenario assumes a rising
unemployment rate peaking at 10.15% in FY 2005. Under this scenario, net cash
outflows are projected in FY 2003 through FY 2005, with the fund in a deficit
situation in 2005. During this three year period, the net assets of the UTF
decrease from $68.1 billion to a negative $3.0 billion, a decline of $71.1
billion (104%). State accounts without sufficient reserve balances to absorb
negative cash flows would be forced to borrow funds from the FUA to meet
benefit payment requirements. State borrowing demands could also deplete the
FUA, which borrows from the ESAA and the EUCA until they are depleted. The FUA
would then require advances from the general fund of the U.S. Treasury to
provide for State borrowings. (See discussion of State solvency measures
following.)
Net cash inflows are reestablished in FY 2006, with a drop in the
unemployment rate to 7.83%. By the end of FY 2012, this positive cash flow has
replenished UTF account balances to $85.9 billion, higher than the beginning of
the recession. This example demonstrates the counter cyclical nature of the UI
program, which experiences net cash outflows during periods of recession, to be
replenished through net cash inflows during periods of recovery.
Text version
Chart IV
Tables containing the total yearly cash inflow, interest earnings and
cash outflow for each scenario are presented in the following pages.
U.S. DEPARTMENT OF LABOR SUPPLEMENTARY SOCIAL
INSURANCE INFORMATION CASH INFLOW AND OUTFLOW OF THE UNEMPLOYMENT TRUST
FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT FOR THE TEN YEAR
PERIOD ENDING SEPTEMBER 30, 2012
(1) EXPECTED ECONOMIC CONDITIONS
(Dollars in thousands)
|
|
2003 |
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
2011 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, Start of year |
$ |
68,121,425
|
$ |
59,595,703
|
$ |
61,035,749
|
$ |
65,712,536
|
$ |
72,079,836
|
$ |
79,942,102
|
$ |
84,946,740
|
$ |
88,127,299
|
$ |
90,289,139
|
$ |
92,218,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Inflow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State unemployment taxes |
|
28,239,000 |
|
33,400,000 |
|
36,532,000 |
|
38,996,000 |
|
41,055,000 |
|
41,968,000 |
|
42,654,000 |
|
43,520,000 |
|
45,684,000 |
|
46,842,000 |
Federal unemployment taxes |
|
7,000,000 |
|
7,183,000 |
|
7,372,000 |
|
7,859,000 |
|
8,323,000 |
|
6,491,000 |
|
6,218,000 |
|
6,659,000 |
|
6,687,000 |
|
7,299,000 |
General revenue appropriation |
|
152,000 |
|
1,700 |
|
900 |
|
800 |
|
500 |
|
600 |
|
700 |
|
700 |
|
700 |
|
700 |
Interest on loans |
|
10,000 |
|
53,000 |
|
73,000 |
|
56,000 |
|
23,000 |
|
31,000 |
|
39,000 |
|
66,000 |
|
127,000 |
|
227,000 |
CMIA receipts |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
Deposits by the Railroad
Retirement Board |
|
149,900
|
|
155,700
|
|
120,300
|
|
93,800
|
|
103,100
|
|
124,200
|
|
121,300
|
|
108,900
|
|
109,600
|
|
119,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash inflow
excluding interest
|
|
35,552,900
|
|
40,795,400
|
|
44,100,200 |
|
47,007,600 |
|
49,506,600 |
|
48,616,800
|
|
49,035,000
|
|
50,356,600 |
|
52,610,300
|
|
54,489,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on Federal
securities |
|
3,894,677
|
|
3,466,271
|
|
3,491,212
|
|
3,738,911
|
|
4,159,348
|
|
4,493,733
|
|
4,686,945
|
|
4,796,696
|
|
4,862,265
|
|
4,979,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash inflow
|
|
39,447,577
|
|
44,261,671
|
|
47,591,412
|
|
50,746,511
|
|
53,665,948 |
|
53,110,533 |
|
53,721,945
|
|
55,153,296
|
|
57,472,565
|
|
59,469,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash outflow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State unemployment benefits |
|
43,839,000 |
|
38,684,000 |
|
38,690,000 |
|
40,062,000 |
|
41,392,000 |
|
43,593,000 |
|
45,924,000 |
|
48,269,000 |
|
50,711,000 |
|
53,257,000 |
State administrative costs |
|
3,842,188 |
|
3,841,093 |
|
3,925,875 |
|
4,017,588 |
|
4,111,281 |
|
4,209,205 |
|
4,309,466 |
|
4,412,019 |
|
4,517,008 |
|
4,624,497 |
Federal administrative costs |
|
172,422 |
|
175,297 |
|
177,502 |
|
179,750 |
|
182,082 |
|
184,405 |
|
186,786 |
|
189,196 |
|
191,723 |
|
194,446 |
Interest on tax refunds |
|
3,689 |
|
3,620 |
|
3,591 |
|
3,850 |
|
4,121 |
|
3,197 |
|
3,046 |
|
3,244 |
|
3,258 |
|
3,575 |
Railroad Retirement Board
withdrawals
|
|
116,000
|
|
117,615
|
|
117,657
|
|
116,023
|
|
114,198
|
|
116,088
|
|
118,088
|
|
117,997
|
|
120,416
|
|
121,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash
outflow |
|
47,973,299 |
|
42,821,625 |
|
42,914,625 |
|
44,379,211 |
|
45,803,682 |
|
48,105,895 |
|
50,541,386 |
|
52,991,456 |
|
55,543,405 |
|
58,200,762 |
Total cash inflow excluding
interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
over
(under) total cash outflow |
|
(12,420,399)
|
|
(2,026,225)
|
|
1,185,575 |
|
2,628,389 |
|
3,702,918 |
|
510,905 |
|
(1,506,386)
|
|
(2,634,856)
|
|
(2,933,105)
|
|
(3,710,962)
|
Total cash inflow over
(under) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total
cash outflow |
|
(8,525,722)
|
|
1,440,046
|
|
4,676,787
|
|
6,367,300
|
|
7,862,266
|
|
5,004,638
|
|
3,180,559
|
|
2,161,840
|
|
1,929,160
|
|
1,268,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year |
$ |
59,595,703 |
$ |
61,035,749 |
$ |
65,712,536 |
$ |
72,079,836 |
$ |
79,942,102 |
$ |
84,946,740 |
$ |
88,127,299 |
$ |
90,289,139 |
$ |
92,218,299 |
$ |
93,486,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unemployment rate |
|
5.68% |
|
5.38% |
|
5.18% |
|
5.05% |
|
4.93% |
|
4.90% |
|
4.90% |
|
4.90% |
|
4.90% |
|
4.90% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. DEPARTMENT OF LABOR SUPPLEMENTARY SOCIAL
INSURANCE INFORMATION CASH INFLOW AND OUTFLOW OF THE UNEMPLOYMENT TRUST
FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT FOR THE TEN YEAR
PERIOD ENDING SEPTEMBER 30, 2012
(2) MILD RECESSIONARY UNEMPLOYMENT RATE
(Dollars in thousands) |
|
2003 |
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
2011 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, start of year
|
$ |
68,121,425
|
$ |
51,859,459
|
$ |
37,695,734
|
$ |
33,876,053
|
$ |
41,120,240
|
$ |
54,524,033
|
$ |
64,102,384
|
$ |
74,627,941
|
$ |
84,815,710
|
$ |
92,501,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash inflow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State unemployment taxes |
|
28,319,000 |
|
34,565,000 |
|
40,872,000 |
|
45,040,000 |
|
46,771,000 |
|
46,073,000 |
|
46,580,000 |
|
46,832,000 |
|
46,653,000 |
|
46,917,000 |
Federal unemployment taxes |
|
6,924,000 |
|
7,022,000 |
|
7,204,000 |
|
7,965,000 |
|
9,233,000 |
|
8,786,000 |
|
8,815,000 |
|
9,220,000 |
|
9,958,000 |
|
9,459,000 |
General revenue appropriation |
|
152,000 |
|
1,700 |
|
900 |
|
800 |
|
500 |
|
600 |
|
700 |
|
700 |
|
700 |
|
700 |
Interest on loans
|
|
34,000 |
|
248,000 |
|
558,000 |
|
645,000 |
|
521,000 |
|
373,000 |
|
267,000 |
|
170,000 |
|
101,000 |
|
85,000 |
CMIA receipts |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
Deposits by the Railroad Retirement
Board |
|
149,900 |
|
155,700 |
|
120,300 |
|
93,800 |
|
103,100 |
|
124,200 |
|
121,300 |
|
108,900 |
|
109,600 |
|
119,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cash inflow excluding interest |
|
35,580,900
|
|
41,994,400 |
|
48,757,200 |
|
53,746,600 |
|
56,630,600 |
|
55,358,800 |
|
55,786,000 |
|
56,333,600 |
|
56,824,300 |
|
56,582,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on Federal
securities |
|
3,666,294 |
|
2,558,182 |
|
1,915,576 |
|
2,007,506 |
|
2,567,174 |
|
3,223,802 |
|
3,758,516 |
|
4,328,222 |
|
4,835,184 |
|
5,160,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cash inflow |
|
39,247,194 |
|
44,552,582 |
|
50,672,776 |
|
55,754,106 |
|
59,197,774 |
|
58,582,602 |
|
59,544,516 |
|
60,661,822 |
|
61,659,484 |
|
61,742,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash outflow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State unemployment benefits |
|
51,290,000 |
|
54,263,000 |
|
50,042,000 |
|
44,103,000 |
|
41,372,000 |
|
44,462,000 |
|
44,416,000 |
|
45,782,000 |
|
49,153,000 |
|
52,093,000 |
State administrative costs |
|
3,927,089 |
|
4,156,856 |
|
4,151,788 |
|
4,107,244 |
|
4,121,129 |
|
4,237,431 |
|
4,293,767 |
|
4,380,368 |
|
4,503,578 |
|
4,618,769 |
Federal administrative costs |
|
172,422 |
|
175,297 |
|
177,502 |
|
179,750 |
|
182,082 |
|
184,405 |
|
186,786 |
|
189,196 |
|
191,723 |
|
194,446 |
Interest on tax refunds |
|
3,649 |
|
3,539 |
|
3,510 |
|
3,902 |
|
4,572 |
|
4,327 |
|
4,318 |
|
4,492 |
|
4,851 |
|
4,633 |
Railroad Retirement Board
withdrawals |
|
116,000 |
|
117,615 |
|
117,657 |
|
116,023 |
|
114,198 |
|
116,088 |
|
118,088 |
|
117,997 |
|
120,416 |
|
121,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cash outflow |
|
55,509,160 |
|
58,716,307 |
|
54,492,457 |
|
48,509,919 |
|
45,793,981 |
|
49,004,251 |
|
49,018,959 |
|
50,474,053 |
|
53,973,568 |
|
57,032,092 |
Total
cash inflow excluding interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
over
(under) total cash outflow |
|
(19,928,260)
|
|
(16,721,907)
|
|
(5,735,257)
|
|
5,236,681 |
|
10,836,619 |
|
6,354,549 |
|
6,767,041 |
|
5,859,547 |
|
2,850,732 |
|
(449,292)
|
Total
cash inflow over (under) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total
cash outflow |
|
(16,261,966)
|
|
(14,163,725)
|
|
(3,819,681)
|
|
7,244,187 |
|
13,403,793 |
|
9,578,351 |
|
10,525,557 |
|
10,187,769 |
|
7,685,916 |
|
4,710,847 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
$ |
51,859,459 |
$ |
37,695,734 |
$ |
33,876,053 |
$ |
41,120,240 |
$ |
54,524,033 |
$ |
64,102,384 |
$ |
74,627,941 |
$ |
84,815,710 |
$ |
92,501,626 |
$ |
97,212,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unemployment
rate |
|
6.60% |
|
7.43% |
|
7.13% |
|
6.35% |
|
5.63% |
|
5.48% |
|
5.10% |
|
4.90% |
|
4.90% |
|
4.90% |
U.S. DEPARTMENT OF LABOR SUPPLEMENTARY SOCIAL
INSURANCE INFORMATION CASH INFLOW AND OUTFLOW OF THE UNEMPLOYMENT TRUST
FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT FOR THE TEN YEAR
PERIOD ENDING SEPTEMBER 30, 2012
(3) DEEP RECESSIONARY UNEMPLOYMENT RATE
(Dollars in thousands)
|
|
2003 |
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
2011 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, start of year
|
$ |
68,121,425
|
$ |
49,632,607
|
$ |
21,773,498
|
$ |
(2,970,460)
|
$ |
7,398,863
|
$ |
23,073,030
|
$ |
35,051,407
|
$ |
48,437,482
|
$ |
65,004,042
|
$ |
77,425,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash inflow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State unemployment taxes
|
|
28,324,000 |
|
35,293,000 |
|
42,887,000 |
|
49,229,000 |
|
51,627,000 |
|
51,501,000 |
|
50,859,000 |
|
50,177,000 |
|
48,577,000 |
|
47,948,000 |
Federal unemployment taxes
|
|
6,891,000 |
|
6,883,000 |
|
6,994,000 |
|
8,253,000 |
|
10,546,000 |
|
10,955,000 |
|
12,675,000 |
|
13,263,000 |
|
11,018,000 |
|
8,970,000 |
General revenue appropriation
|
|
152,000 |
|
1,700 |
|
900 |
|
800 |
|
500 |
|
600 |
|
700 |
|
700 |
|
700 |
|
700 |
Interest on loans |
|
47,000 |
|
450,000 |
|
1,512,000 |
|
2,045,000 |
|
1,685,000 |
|
1,334,000 |
|
989,000 |
|
622,000 |
|
409,000 |
|
291,000 |
CMIA receipts |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
|
2,000 |
Deposits by the Railroad
Retirement Board
|
|
149,900 |
|
155,700 |
|
120,300 |
|
93,800 |
|
103,100 |
|
124,200 |
|
121,300 |
|
108,900 |
|
109,600 |
|
119,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cash inflow excluding interest |
|
35,565,900
|
|
42,785,400
|
|
51,516,200
|
|
59,623,600 |
|
63,963,600 |
|
63,916,800 |
|
64,647,000 |
|
64,173,600 |
|
60,116,300 |
|
57,330,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on Federal
securities |
|
3,584,862
|
|
1,943,590
|
|
1,277,233
|
|
1,300,513
|
|
1,667,933 |
|
2,036,450
|
|
2,358,120 |
|
3,130,311 |
|
3,893,199 |
|
4,449,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cash inflow |
|
39,150,762
|
|
44,728,990
|
|
52,793,433
|
|
60,924,113 |
|
65,631,533 |
|
65,953,250 |
|
67,005,120 |
|
67,303,911 |
|
64,009,499 |
|
61,780,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash outflow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State unemployment benefits |
|
53,375,000 |
|
67,873,000 |
|
72,675,000 |
|
46,123,000 |
|
45,447,000 |
|
49,331,000 |
|
48,920,000 |
|
46,022,000 |
|
46,790,000 |
|
48,382,000 |
State administrative costs |
|
3,972,526 |
|
4,418,718 |
|
4,563,825 |
|
4,131,974 |
|
4,208,864 |
|
4,337,985 |
|
4,387,962 |
|
4,401,697 |
|
4,480,881 |
|
4,575,671 |
Federal administrative costs |
|
172,422 |
|
175,297 |
|
177,502 |
|
179,750 |
|
182,082 |
|
184,405 |
|
186,786 |
|
189,196 |
|
191,723 |
|
194,446 |
Interest on tax refunds |
|
3,632 |
|
3,469 |
|
3,407 |
|
4,043 |
|
5,222 |
|
5,395 |
|
6,209 |
|
6,461 |
|
5,368 |
|
4,394 |
Railroad Retirement Board
withdrawals |
|
116,000 |
|
117,615 |
|
117,657 |
|
116,023 |
|
114,198 |
|
116,088 |
|
118,088 |
|
117,997 |
|
120,416 |
|
121,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash outflow |
|
57,639,580 |
|
72,588,099 |
|
77,537,391 |
|
50,554,790 |
|
49,957,366 |
|
53,974,873 |
|
53,619,045 |
|
50,737,351 |
|
51,588,388 |
|
53,277,755 |
Total cash inflow excluding
interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
over (under) total
cash outflow |
|
(22,073,680)
|
|
(29,802,699)
|
|
(26,021,191)
|
|
9,068,810 |
|
14,006,234 |
|
9,941,927 |
|
11,027,955 |
|
13,436,249 |
|
8,527,912 |
|
4,053,045 |
Total cash inflow over
(under) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total cash
outflow |
|
(18,488,818)
|
|
(27,859,109)
|
|
(24,743,958)
|
|
10,369,323 |
|
15,674,167 |
|
11,978,377 |
|
13,386,075 |
|
16,566,560 |
|
12,421,111 |
|
8,503,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
$ |
49,632,607 |
$ |
21,773,498 |
$ |
(2,970,460) |
$ |
7,398,863 |
$ |
23,073,030 |
$ |
35,051,407 |
$ |
48,437,482 |
$ |
65,004,042 |
$ |
77,425,153 |
$ |
85,928,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total unemployment rate |
|
6.93% |
|
9.08% |
|
10.15% |
|
7.83% |
|
7.28% |
|
7.05% |
|
6.43% |
|
5.65% |
|
5.18% |
|
4.90% |
States Minimally Solvent
Another measure of the sufficiency of accumulated UTF assets to meet
future benefit payment requirements analyzes the adequacy of each State's
accumulated net assets or reserve balance to provide a defined level of
benefits over a defined period of time. To be considered minimally solvent, a
State's reserve balance should provide for one year's projected benefit payment
needs based on the highest level of benefit payments experienced by the State
over the last twenty years. A ratio of 1.0 or greater indicates a state is
minimally solvent. States below this level are the most vulnerable to
exhausting their funds in a recession. States exhausting their reserve balance
must borrow funds from the Federal Unemployment Account (FUA) to make benefit
payments. During periods of high sustained unemployment, balances in the FUA
may be depleted. In these circumstances, FUA is authorized to borrow from the
Treasury general fund.
Chart V presents the State by State results of this analysis at
September 30, 2002, in descending order, by ratio. As the table below
illustrates, 30 states failed to maintain minimal solvency ratios at September
30, 2002.
Chart V
2.80 |
|
Alaska |
0.99 |
2.73 |
|
New Jersey |
0.99 |
2.41 |
|
Nevada |
0.96 |
2.13 |
|
Virginia |
0.94 |
Mississippi |
2.06 |
|
Nebraska |
0.91 |
1.92 |
|
Kansas |
0.88 |
Maine |
1.82 |
|
Wisconsin |
0.86 |
Arizona |
1.62 |
|
Maryland |
0.84 |
Wyoming |
1.55 |
|
Rhode Island |
0.80 |
Montana |
1.51 |
|
Washington |
0.79 |
Indiana |
1.47 |
|
Colorado |
0.77 |
Hawaii |
1.47 |
|
Tennessee |
0.77 |
Oregon |
1.36 |
|
Connecticut |
0.73 |
Louisiana |
1.33 |
|
Idaho |
0.69 |
Georgia |
1.33 |
|
Kentucky |
0.69 |
Puerto Rico |
1.32 |
|
Michigan |
0.69 |
Uath |
1.29 |
|
California |
0.67 |
Florida |
1.24 |
|
Alabama |
0.62 |
Iowa |
1.19 |
|
West Virginia |
0.62 |
Oklahoma |
1.19 |
|
Ohio |
0.60 |
District of Columbia |
1.19 |
|
Massachusetts |
0.59 |
South Carolina |
1.03 |
|
Pennsylvania |
0.51 |
South Dakota |
1.00 |
|
Arkansas |
0.46 |
|
|
|
North Dakota |
0.36 |
|
|
|
Missouri |
0.30 |
|
|
|
North Carolina |
0.23 |
|
|
|
Illinois |
0.21 |
|
|
|
Minnesota |
0.18 |
|
|
|
Texas |
0.10 |
|
|
|
New York |
0.05 |
BLACK LUNG DISABILITY BENEFIT PROGRAM
The Black Lung Disability Program provides for compensation, medical and
survivor benefits for eligible coal miners who are disabled due to
pneumoconiosis (black lung disease) arising out of their coal mine employment.
The U.S. Department of Labor operates the Black Lung Disability Benefits
Program. The Black Lung Disbaility Trust Fund (BLDTF) provides benefit payments
to eligible coal miners disabled by pneumoconiosis when no responsible mine
operator can be assigned the liability.
Program administration and funding
Black lung disability benefit payments are funded by excise taxes from
coal mine operators based on the sale of coal, as are the fund's administrative
costs. These taxes are collected by the Internal Revenue Service and
transferred to the BLDTF, which was established under the authority of the
Black Lung Benefits Revenue Act, and administered by the U.S. Department of the
Treasury. The Black Lung Benefits Revenue Act provides for repayable advances
to the BLDTF from the general fund of the Treasury, in the event that BLDTF
resources are not adequate to meet program obligations.
Program finances and sustainabilility
At September 30, 2002, total liabilities of the Black Lung Disability
Trust Fund exceeded assets by $7.7 billion. This deficit fund balance
represented the accumulated shortfall of excise taxes necessary to meet benefit
payment and interest expenses. This shortfall was funded by repayable advances
to the BLDTF, which are repayable with interest. Outstanding advances at
September 30, 2002 were $7.7 billion, bearing interest rates ranging from 5.375
to 13.875 percent. Excise tax revenues of $566.6 million, benefit payment
expense of $367.9 million and interest expense of $595.6 million were
recognized for the year ended September 30, 2002.
As discussed in Note 1.N.3, DOL recognized a liability for disability
benefits to the extent of unpaid benefits applicable to the current period.
Accrued disability benefits payable at September 30, 2002 were $29.5 million.
Although no liability was recognized for future payments to be made to present
and future program participants beyond the due and payable amounts accrued at
year end, future estimated cash inflows and outflows of the BLDTF are tracked
by the Department for budgetary purposes. The significant assumptions used in
the projections are coal production estimates, the tax rate structure, number
of beneficiaries, life expectancy, medical costs and the interest rate on new
repayable advances from Treasury. These projections would be sensitive to
changes in the tax rate and changes in interest rates on repayable advances
from Treasury.
These projections, made over the thirty-eight year period ending
September 30, 2040, indicate that cash inflows from excise taxes will exceed
cash outflows for benefit payments and administrative expenses for each period
projected. Cumulative net cash inflows are projected to reach $10.3 billion by
the year 2040. However, when interest payments required to finance the BLDTF's
repayable advances are applied against this surplus cash inflow, the BLDTF's
cash flow turns negative during each of the thirty-eight periods included in
the projections. Net cash outflows after interest payments are projected to
reach $58.3 billion by the end of the year 2040, increasing the BLDTF's deficit
to $49.3 billion at September 30, 2040. (See Chart I on following page.)
The net present value of future benefit payments for the thirty-eight
year period ending 2040 is $3.1 billion. The net present value of future excise
taxes for the thirty-eight year period is $7.8 billion which results in a $4.7
billion excess of excise taxes over benefit payments. However, the net present
value of total cash outflows, including interest payments and administrative
costs, is $20.9 billion resulting in an excess of cash outflows over excise
taxes of $13.1 billion. The interest rate used for net present value is 5.375
Text version
Chart I
The projected decrease in cash inflows in the year 2014 and thereafter
is the result of a scheduled reduction in the tax rate on the sale of coal.
This rate reduction is projected to result in a fifty-seven percent decrease in
the amount of excise taxes collected between the years 2013 and 2015. The
cumulative effect of this change is estimated to be in excess of $12.7 billion
by the year 2040.
Yearly cash inflows and outflows are presented in the table on the
following page.
U. S. DEPARTMENT OF LABOR SUPPLEMENTARY SOCIAL
INSURANCE INFORMATION CASH INFLOW AND OUTFLOW OF THE BLACK LUNG DISABILITY
TRUST FUND FOR THE THIRTY- EIGHT YEAR PERIOD ENDING SEPTEMBER 30,
2040
(Dollars in thousands)
|
|
2003 |
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 - 2040 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash inflow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise taxes |
$ |
573,000 |
$ |
597,000 |
$ |
616,000 |
$ |
628,000 |
$ |
638,000 |
$ |
13,695,019 |
$ |
16,747,019 |
Interest |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash inflow
|
|
573,000 |
|
597,000 |
|
616,000 |
|
628,000 |
|
638,000 |
|
13,695,019 |
|
16,747,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash outflow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disabled coalminers benefits |
|
359,727 |
|
344,208 |
|
328,986 |
|
313,645 |
|
296,972 |
|
3,498,197 |
|
5,141,735 |
Administrative costs
|
|
56,717 |
|
58,472 |
|
60,310 |
|
62,236 |
|
64,230 |
|
967,446 |
|
1,269,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash outflows before
interest payments |
|
416,444
|
|
402,680
|
|
389,296
|
|
375,881 |
|
361,202 |
|
4,465,643 |
|
6,411,146 |
Cash inflow over cash
outflow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
before interest
payments |
|
156,556
|
|
194,320
|
|
226,704
|
|
252,119
|
|
276,798 |
|
9,229,376
|
|
10,335,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on advances |
|
619,535
|
|
643,610
|
|
666,972
|
|
689,867
|
|
712,629
|
|
48,578,300
|
|
51,910,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash
inflow |
|
1,035,979
|
|
1,046,290
|
|
1,056,268
|
|
1,065,748 |
|
1,073,831 |
|
53,043,943 |
|
58,322,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash outflow over
total cash inflow |
|
(462,979) |
|
(449,290) |
|
(440,268) |
|
(437,748) |
|
(435,831) |
|
(39,348,924)
|
|
(41,575,040) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, start of year
|
|
(7,681,649) |
|
(8,144,628) |
|
(8,593,918) |
|
(9,034,186) |
|
(9,471,934) |
|
(9,907,765) |
|
(7,681,649) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
$ |
(8,144,628) |
$ |
(8,593,918) |
$ |
(9,034,186) |
$ |
(9,471,934) |
$ |
(9,907,765) |
$ |
(49,256,689) |
$ |
(49,256,689) |
|
|
|
|