With unemployment still on the rise, demand for unemployment benefits is unsurprisingly high. Those payouts have thoroughly drained Illinois' unemployment insurance trust fund, as well as those in 33 other states. ProPublica estimates that our fund is now $350 million in the red and will ultimately borrow "an estimated $8 billion before the recession ends." We already received a $2 billion credit line from the federal government last year. And while Congress waived the interest requirement on that loan as part of the economic stimulus bill, the underlying provision is set to expire at the end of the year, meaning any remaining debt would carry an interest rate of about 4 percent. That could force Illinois lawmakers to restrict unemployment aid or borrow from the general revenue fund to make the additional payments (which is hard to imagine considering the state of our state budget).

Budget experts, however, have a few solutions in mind. The Center for Budget and Policy Priorities and the National Employment Law Project (PDF) both think Congress should extend immediately its moratorium on state interest payments. In the long-term, officials from both NELP and the Government Accountability Office are recommending that the federal taxable wage base -- the maximum amount of wages that are subject to the federal unemployment tax -- should be raised and indexed to inflation.  It has been stuck at $7,000 per worker since 1983.