[Congressional Record Volume 143, Number 82 (Thursday, June 12, 1997)]
[Senate]
[Pages S5610-S5611]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself and Mr. D'Amato):
  S. 897. A bill to make permanent certain authority relating to self-
employment assistance programs; to the Committee on Finance.


                the self-employment reauthorization act

  Mr. WYDEN. Mr. President, today I am introducing legislation with 
Senator D'Amato to reauthorize the Self-Employment Assistance [SEA] 
Program. The Self-Employment Assistance Program takes an innovative and 
cost-effective approach to helping eligible dislocated workers become 
self-sufficient: It enables them to use their weekly unemployment 
checks to start their own businesses. The law has helped turn the 
unemployment safety net into a trampoline of opportunity for thousands 
of unemployed.
  Today, in 38 States the unemployed who wish to start their own 
businesses are forced to give up their weekly unemployment compensation 
checks as soon as their company starts generating revenue--but before 
it provides enough income to support them. It is exactly this problem 
the Self-Employment Assistance Program is designed to correct. It gives 
many skilled workers the chance to get back to work faster and helps 
create new jobs as well.
  In a few short years, the Self-Employment Assistance Program (Public 
Law 103-182; title V) has enabled thousands of unemployed Americans to 
use their unemployment compensation to establish new businesses. 
Modeled on experiments in Massachusetts and Washington, self-employment 
programs can create jobs at no cost to the taxpayer. Using existing 
funds, the Massachusetts program created dozens of new businesses but 
actually paid $1,400 less unemployment per worker than the State 
average. The Washington program created more than 600 new jobs and the 
firms were paying an average of $10.50 an hour to workers they had 
hired.
  In Oregon, 122 UI claimants enrolled in SEA last year; 76 completed 
the program. These entrepreneurs are now running an auto repair shop, a 
marine maintenance and repair shop, distributing cleaning products to 
resorts and restaurants along the Oregon Coast and setting up a 
computer cleaning service.
  In Grants Pass, OR, one participant said she could not have developed 
her publication business without SEA. It helped keep her afloat 
financially while she pursued her self-employment goal. She received 
counseling from the local Small Business Development Center, and 
through the Center she was able to contact potential customers.
  In Sweet Home, OR, another woman said the SEA program gave her the 
chance to have an income as she was starting up her day care business. 
She presently cares for nine children by herself and has plans to 
increase enrollment and add another teacher and three aides. The Small 
Business Development Center at Linn-Benton Community College helped her 
develop her

[[Page S5611]]

business plan and locate financial resources.
  Over the past 3 years, 10 States used the 1993 legislation to create 
Self-Employment Assistance programs: California, Connecticut, Delaware, 
Maine, Maryland, Minnesota, New Jersey, New York, Oregon and Rhode 
Island. To date, DoL has approved six States plans (California, 
Delaware, Maine, New Jersey, New York and Oregon) and four of these--
Delaware, Maine, New York and Oregon--are actually up and running.
  Here's how the program works. States are given the flexibility to 
establish Self-Employment Assistance [SEA] programs as part of their 
unemployment insurance [UI] programs. It permits States to provide 
income support payments to the unemployed in the same weekly amount as 
the worker's regular unemployment insurance [UI] benefits would 
otherwise be. It permits claimants to work full-time on starting their 
own business instead of searching for traditional wage and salary jobs.
  The law directs the DoL to review and approve State SEA program 
plans. In States that operate SEA programs, new UI claimants who may be 
eligible for SEA are identified through worker profiling--automated 
systems that use a set of criteria to identify those claimants who are 
likely to exhaust their UI benefits and need reemployment assistance. 
State SEA program provide participants on a weekly or biweekly basis 
the same amount as regular UI benefits while they are getting their 
business off the ground. SEA participants are required to participate 
in technical assistance programs--entrepreneurial training (accounting, 
cash flow, finances, taxes, etc), business counseling (business plans, 
marketing, legal requirements, insurance, etc.), and finance--to ensure 
they have the skills necessary to operate a business. Finally, SEA 
programs are required to operate at no additional cost to the 
unemployment trust fund: the law stipulates that the payment of SEA 
allowances may not result in any additional benefits charges the 
unemployment trust fund.
  Individuals may choose at any time to opt out of the SEA program; 
they may resume collection of regular unemployment compensation until 
the total amount of regular unemployment compensation paid and the SEA 
paid equals the maximum benefit amount. States, through the title III 
of the Job Training Partnership Act and Small Business Development 
Centers, support the costs of providing basic SEA program services, 
like business counseling and technical assistance, but may allow 
participants to pay for more intensive counseling and technical 
assistance.
  In effect, the program eliminates a high hurdle for those who have 
the ingenuity, motivation and energy to start their own businesses. In 
those States with SEA programs, an unemployed worker no longer has to 
choose between receiving UI benefits and starting a new business.
  Mr. President, as we move into the global economy of the 21st 
century, we must adopt fresh strategies so that our skilled but 
unemployed workers can start anew in the private sector. Harvard 
Business School reported last year that from 1978 to 1996, 22 percent 
of the workforce, or 3 million workers, at the country's top 100 
companies had been laid off, and that 77 percent of all the layoffs 
involved white collar workers. Many of these highly-skilled and 
motivated workers want to start their own firms. Congress should not 
stand in their way. Renewal of the Self-Employment Assistance Program 
will give those States with programs continued flexibility to help 
unemployed workers create their own businesses and should encourage 
those without programs to establish them.
  Our bipartisan bill promotes the spirit of entrepreneurship. It 
carries forward a reasonable and sensible reform of the unemployment 
insurance system at no cost to the taxpayer.
  I would like to thank Senator D'Amato for joining me as an original 
cosponsor of this bill. New York has a very active and successful Self-
Employment Assistance Program, and I look forward to working closely 
with him to see this important program reauthorized.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 897

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SELF-EMPLOYMENT ASSISTANCE PROGRAMS.

       (a) In General.--Paragraph (2) of section 507(e) of the 
     North American Free Trade Agreement Implementation Act (26 
     U.S.C. 3306 note) is hereby repealed.
       (b) Conforming Amendments.--Subsection (e) of section 507 
     of such Act is further amended--
       (1) by amending the heading after the subsection 
     designation to read ``Effective Date.--''; and
       (2) by striking ``(1) Effective Date.--'' and by running in 
     the remaining text of subsection (e) immediately after the 
     heading therefor, as amended by paragraph (1).
                                 ______