Awwal 06, 1432, Feb 09, 2011, SPA -- The White House said Tuesday that President Barack Obama would propose giving financial assistance to U.S. states struggling with high debt from unemployment insurance. Many states have needed to borrow from the federal government to meet rising demand for unemployment benefits as the number of jobless grew during the economic recession that started in late 2007. When Congress approved the $814 billion stimulus plan in early 2009, it waived interest charges on such loans, but the waivers expired at the end of 2010. "The president's proposal ... prevents increases in the federal tax that goes to the unemployment-insurance fund," White House spokesman Robert Gibbs said. "This policy, if enacted, would prevent ... further federal tax increases, would help states make up for the shortfalls they have, and give them time ... to rationalize what they offer and how they pay for it," Gibbs said.
