For nearly 50 years, the unemployment insurance program has functioned as a unique and largely successful intergovernmental effort. From its inception, federal and state governments have each had principal jurisdiction over particular aspects of the program and both have shared responsibilities for others. The distribution of authority and responsibilities has provided a balance of power that accounts for the vitality of the program and its responsiveness to new problems over the years. Recent economic developments and political shifts, however, are producing an increasing federal dominance and a departure from long-standing program goals. If the unemployment insurance program is to continue to succeed, it requires a return to the traditional federal-state balance of power. This book discusses first the original reasoning for the federal-state distribution of responsibilities and the provisions originally adopted to implement the system. It next describes later federal standards and their impact on the balance of power. The administration of the federal laws is explored as well as the process of resolving conflicts. Finally, an assessment is analyzed on the value of the balance to the system and the prospects for its preservation. Recommendations are then made concerning how the balance of power can be reformulated. (KC)