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Moving from Unemployment Checks to Paychecks: Assessing the President’S Proposals to Help the Long-Term Unemployed

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Moving from Unemployment Checks to Paychecks: Assessing the President’S Proposals to Help the Long-Term Unemployed MOVING FROM UNEMPLOYMENT CHECKS TO PAYCHECKS: ASSESSING THE PRESIDENT’S PROPOSALS TO HELP THE LONG-TERM UNEMPLOYED HEARING BEFORE THE SUBCOMMITTEE ON HUMAN RESOURCES OF THE COMMITTEE ON WAYS AND MEANS U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS FIRST SESSION OCTOBER 6, 2011 Serial No. 112–HR08 Printed for the use of the Committee on Ways and Means ( U.S. GOVERNMENT PRINTING OFFICE 76–191 WASHINGTON : 2012 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191 wwoods2 on DSKR6SHH1PROD with WAYS & MEANS COMMITTEE ON WAYS AND MEANS GEOFF DAVIS, Kentucky, Chairman ERIK PAULSEN, Minnesota LLOYD DOGGETT, Texas RICK BERG, North Dakota JIM MCDERMOTT, Washington TOM REED, New York JOHN LEWIS, Georgia TOM PRICE, Georgia JOSEPH CROWLEY, New York DIANE BLACK, Tennessee CHARLES W. BOUSTANY, JR., Louisiana JON TRAUB, Staff Director JANICE MAYS, Minority Staff Director ii VerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191 wwoods2 on DSKR6SHH1PROD with WAYS & MEANS C O N T E N T S Page Advisory of October 6, 2011 announcing the hearing ........................................... 2 WITNESSES PANEL 1: The Honorable Ron Wyden, Senator from the State of Oregon ....................... 6 The Honorable Jim Renacci, Representative from the State of Ohio .............. 12 The Honorable Hansen Clarke, Representative from the State of Michigan .. 15 PANEL 2: The Honorable Jane Oates, Assistant Secretary, Employment and Training Administration, U.S. Department of Labor .................................................... 16 PANEL 3: Maren Daley Executive Director, Job Service North Dakota ........................... 52 Dawn Deane, Unemployed Worker ..................................................................... 61 Don Peitersen, Director of Unemployment/Workforce Project, American In- stitute for Full Employment ............................................................................ 66 Chris McConnell, Workforce Consultant, AlliedBarton Security Services ...... 82 SUBMISSIONS FOR THE RECORD Aaron Benjamin, Statement ................................................................................... 136 American 99ers Union, Statement ......................................................................... 142 TrueBlue, Statement ............................................................................................... 145 QUESTIONS FOR THE RECORD The Honorable Geoff Davis ..................................................................................... 90 The Honorable Rick Berg ........................................................................................ 113 The Honorable Tom Reed ........................................................................................ 119 The Honorable Llyod Doggett ................................................................................. 126 iii VerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191 wwoods2 on DSKR6SHH1PROD with WAYS & MEANS VerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191 wwoods2 on DSKR6SHH1PROD with WAYS & MEANS MOVING FROM UNEMPLOYMENT CHECKS TO PAYCHECKS: ASSESSING THE PRESIDENT’S PROPOSALS TO HELP THE LONG-TERM UNEMPLOYED THURSDAY, OCTOBER 6, 2011 U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON HUMAN RESOURCES, Washington, DC. The subcommittee met, pursuant to notice, at 9:03 a.m. in Room B–318, Rayburn House Office Building, the Honorable Geoff Davis [Chairman of the Subcommittee] presiding. [The advisory announcing the hearing follows:] (1) VerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191 wwoods2 on DSKR6SHH1PROD with WAYS & MEANS 2 ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS Chairman Davis Announces Hearing on Moving from Unemployment Checks to Paychecks: Assessing the President’s Proposals to Help the Long-Term Unemployment October 06, 2011 Congressman Geoff Davis (R–KY), Chairman of the Subcommittee on Human Re- sources of the Committee on Ways and Means, today announced that the Sub- committee will hold a hearing reviewing unemployment benefit proposals in the President’s latest jobs plan and assessing whether they will help the long-term un- employed return to work. The hearing will take place on Thursday, October 6, 2011, in Room B–318 Rayburn House Office Building, beginning at 9:00 a.m. In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only. Witnesses will include a representative of the U.S. Department of Labor (DoL) as well as other public and private sector experts on unemployment benefits and employment security policies designed to promote reemployment. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Com- mittee and for inclusion in the printed record of the hearing. BACKGROUND: In August 2011 (the most recent official data), the U.S. unemployment rate was 9.1 percent, 14.0 million individuals were unemployed, the average duration of un- employment was a record high of over 40 weeks, and 6.0 million individuals were long-term unemployed—defined as unemployed for 27 weeks of longer. The Federal-State unemployment compensation program created by the Social Se- curity Act of 1935 assists unemployed individuals by offering weekly unemployment benefit checks while they search for work. According to DoL, in order to be eligible for benefits jobless workers must have a history of attachment to the workforce and must be able and available for work. As a result of a series of Federal extended benefit laws enacted since 2008 that now provide up to 73 weeks of Federal benefits, the maximum number of weeks of unemployment benefits payable per person has grown to a record 99 weeks, which is currently available in 21 States with especially high unemployment rates. Since mid-2008, $180 billion in Federal extended unemployment benefits have been paid, with most supported by Federal general revenues. As weeks of unemployment benefits and total spending have grown, so have total payments made in error. According to DoL, improper payments of unemployment benefits reached record highs in 2010, with $17.2 billion paid in error, equal to 11.2% of all payments. On September 8, 2011, the President announced his most recent plan to assist the long-term unemployed in returning to work. This plan would extend the availability of up to 99 weeks of total unemployment benefits through CY 2012, at an estimated cost of $44 billion. Also within the Subcommittee’s jurisdiction, the President’s plan proposes providing an additional $10 billion in one-time Federal funds to States to promote various return-to-work efforts, including wage subsidies, subsidies for em- ployer training of UI recipients (along the lines of the ‘‘Georgia Works’’ program), work sharing, wage insurance, and reemployment assessments, among other of what the Administration terms ‘‘promising strategies.’’ In announcing the hearing, Chairman Davis said, ‘‘This hearing will review a number of measures the President recently proposed to assist especially the long-term unemployed in returning to work. I hope we can build on our previous findings on the importance of better engaging the unemployed VerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00006 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191 wwoods2 on DSKR6SHH1PROD with WAYS & MEANS 3 and providing States more flexibility in assisting them. I look forward to identifying possible common ground when it comes to helping more long- term unemployed beneficiaries return to work, and doing so in a fiscally responsible manner.’’ FOCUS OF THE HEARING: The hearing will focus on a review of the President’s recent proposals designed to help long-term unemployed individuals return to work. DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: Please Note: Any person(s) and/or organization(s) wishing to submit for the hear- ing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms. From the Committee homepage, http://waysandmeans.house.gov, select ‘‘Hearings.’’ Select the hearing for which you would like to submit, and click on the link entitled, ‘‘Click here to provide a submis- sion for the record.’’ Once you have followed the online instructions, submit all re- quested information. ATTACH your submission as a Word document, in compliance with the formatting requirements listed below, by the close of business on Thursday, October 20, 2011. Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225–1721 or (202) 225–3625. FORMATTING REQUIREMENTS: The Committee relies on electronic submissions for printing the official hearing record. As al- ways, submissions will be included in the record according to the discretion of the Committee.
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