CLOSE Act
- Bill Number
- H.R. 7306
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2026-02-02: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-02-12T09:06:21Z
AI-Generated Summary
Purpose of the Legislation
The CLOSE Act (H.R. 7306) aims to end specific unemployment insurance programs created under the CARES Act in response to the COVID-19 pandemic. It terminates benefit payments for these programs and cancels (rescinds) any unspent federal funds allocated to them, while allowing limited continued funding for administrative costs to states.
Key Provisions
- Termination of Pandemic Unemployment Assistance (PUA): Ends all PUA benefit payments 30 days after the bill's enactment. States can no longer receive or distribute these benefits, but federal funding for state administrative expenses continues.
- Termination of Federal Pandemic Unemployment Compensation (FPUC) and Mixed Earner Unemployment Compensation (MEUC): Stops the additional $600 weekly federal supplement to regular unemployment benefits and the extra support for self-employed or gig workers. No new state agreements for these programs can be made after enactment, with terminations effective 30 days later. Administrative funding for states persists.
- Repeal of Pandemic Emergency Unemployment Compensation (PEUC): Fully repeals the program that extended unemployment benefits beyond the standard 26 weeks, effective 30 days after enactment.
- Rescission of Unobligated Funds: Cancels all unspent balances in the Unemployment Trust Fund (a federal account holding unemployment money) that were appropriated for PUA, FPUC/MEUC, and PEUC. This takes effect 30 days after enactment, redirecting savings to the U.S. Treasury.
Significant Changes to Existing Law
- Amends Sections 2102, 2104, and 2107 of the CARES Act (passed in March 2020) to override ongoing authority for these emergency unemployment programs, which were originally set to expire at various points through 2021 but have been extended by later laws.
- Introduces a hard cutoff for benefit payments and new state agreements, shifting from temporary pandemic relief to permanent termination.
- Preserves only narrow exceptions for state administrative costs (e.g., processing claims), ensuring programs wind down without immediate operational collapse.
Potential Impacts
- On Citizens: Millions of unemployed individuals, especially those relying on extended or supplemental benefits (e.g., gig workers or those exhausting regular benefits), will lose access to federal unemployment support 30 days after enactment. This could increase financial strain during economic recovery but reduce dependency on government aid.
- On Government Agencies: The Department of Labor and states' unemployment offices will see reduced workloads and funding needs for benefits but must handle administrative wind-downs. The federal government gains fiscal savings by rescinding billions in unspent funds, potentially lowering the national deficit.
- On International Relations: No direct impacts, as the bill focuses on domestic unemployment programs.
Main Stakeholders Affected
- Unemployed Workers: Primary recipients of PUA, FPUC, MEUC, and PEUC benefits, who face abrupt loss of income support.
- State Governments: Unemployment insurance agencies lose federal benefit funding but retain administrative grants; states may need to adjust their own programs or budgets.
- Federal Government and Taxpayers: The U.S. Treasury and Congress benefit from rescinded funds, reducing overall pandemic-related spending (estimated at over $500 billion for these programs historically).
- Employers and Businesses: Indirectly affected through potential changes in labor market dynamics, as ending benefits may encourage quicker return to work.
Notable Legal, Constitutional, or Political Implications
- Legal: The bill uses standard congressional authority to amend prior laws and rescind appropriations (under the Impoundment Control Act framework), but it could face challenges if seen as retroactively harming vested benefit rights; however, unemployment benefits are typically not considered entitlements like Social Security.
- Constitutional: No major issues, as it aligns with Congress's spending power under Article I. It avoids equal protection concerns by applying uniformly nationwide.
- Political: Highlights ongoing debates over fiscal responsibility versus pandemic aid, potentially dividing lawmakers on Republican-led efforts to "claw back" emergency funds amid inflation concerns. Enactment could signal a shift toward post-emergency budget cuts, influencing future relief legislation.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (4)
Rep. Turner, Michael R. [R-OH-10], Rep. Balderson, Troy [R-OH-12], Rep. Carey, Mike [R-OH-15], Rep. Smucker, Lloyd [R-PA-11]
Recent Actions
- 2026-02-02: Referred to the House Committee on Ways and Means.
- 2026-02-02: Introduced in House
- 2026-02-02: Introduced in House
Bill Versions
- Clawing back Lapsed Obligations from State Emergency programs Act — issued 2026-02-02 — PDF (5 pages)