H.R. 6431, New Opportunities for Business Ownership and Self-Sufficiency Act

H.R. 6431 would modify the rules governing Self-Employment Assistance (SEA) programs. Specifically, H.R. 6431 would:

• Allow up to 10 percent of a state’s unemployment insurance (UI) claimants to participate in the program;
• Eliminate the requirement that states provide services only to claimants who are likely to exhaust unemployment benefits; and
• Clarify that a claimant can satisfy the program’s requirements by participating in activities pursuant to a business plan and market feasibility study.

SEA programs allow people to work toward starting their own business instead of searching for other jobs while they receive weekly payments in the same amount, at the same interval, and on the same terms as regular unemployment compensation. For the few states that have such programs, less than 5 percent of UI claimants participate, which is the program cap under current law. Funding for the payments—like regular UI payments—is drawn from payroll taxes levied primarily on employers by state governments and by the federal government. Benefit payments and tax receipts flow through the Unemployment Trust Fund in the Treasury and are considered federal direct spending and revenues.

Using information from studies about the effect of SEA programs on benefit duration, CBO estimates that expanding such programs would not significantly affect the number of weeks for which participants would receive benefits. Thus, CBO estimates that enacting H.R. 6431 would have an insignificant effect on direct spending over the 2026-2036 period.

Consistent with historical experience, CBO expects that, over time, states will maintain balances in their trust fund accounts so that changes in benefits paid will be offset by changes in revenues collected. Consequently, CBO also estimates that enacting H.R. 6431 would have an insignificant effect on revenues.

CBO estimates that implementing H.R. 6431 would not significantly affect the Department of Labor’s operating costs over the 2026-2031 period; any change in such spending would be subject to the availability of appropriated funds.

The CBO staff contact for this estimate is Justin Latus. The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis.