[Congressional Record Volume 143, Number 158 (Monday, November 10, 1997)]
[Extensions of Remarks]
[Page E2311]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            THE COMMUNITY EMPLOYMENT PARTNERSHIP ACT OF 1997

                                 ______
                                 

                         HON. NANCY L. JOHNSON

                             of connecticut

                    in the house of representatives

                        Sunday, November 9, 1997

  Mrs. JOHNSON of Connecticut. Mr. Speaker, today my colleague, Nita 
Lowey and I are introducing the Community Employment Partnership Act 
[CEPA] which is designed to encourage the not-for-profit community to 
increase their participation in the national initiative to move more 
than 2 million Americans from welfare dependency into productive work. 
Through CEPA, not-for-profit employers, for the first time, will be 
allowed to participate in the work opportunity tax credit hiring 
incentives that are currently available to for-profit companies which 
hire entry-level workers.
  During the last Congress, when we enacted welfare reform, we embarked 
on a bold new initiative to move millions of able-bodied welfare 
recipients into the work force. At the time we understood this new 
initiative, many of us realized that if the private sector were to 
provide jobs for those leaving the welfare rolls, they would need an 
incentive to offset the added costs of hiring, training, and retaining 
a category of people who face significant obstacles to succeeding in 
the workplace. These obstacles include problems with minimal job 
skills, low self-esteem, and little, if any, work history. In order to 
encourage for-profit employers to hire welfare recipients, I strongly 
supported the enactment of the work opportunity tax credit which is 
designed to offset the added costs involved.
  Unfortunately, at that time, we did not develop a mechanism for 
extending these hiring tax incentives to the nonprofit community. In 
many cases, the largest employers in inner-city and rural communities, 
where most welfare recipients reside, are nonprofits such as hospitals, 
universities, museums, and community-based organizations. That they are 
not eligible is ironic since many nonprofit employers view as part of 
their primary mission service to those on welfare. As a result, 
nonprofits are often more acclimated to working with hard-to-employ 
individuals than their for-profit brethren. Another advantage of making 
not-for-profit employers eligible for WOTC is that they often provide 
full-time jobs with a career path, and generally offer their employees 
benefits.
  In addition, numerous stories have come to light regarding the time 
and financial burden faced by welfare recipients who must travel long 
distances from their homes in the inner city or in rural America to the 
suburbs where most new jobs are becoming available. For the welfare 
recipient, who generally does not have a car, this means long and 
costly trips on public or privately organized transportation. The long 
hours that newly employed welfare recipient must be away from home 
requires them to string together unreliable and often expensive day 
care arrangements, including relying on family members, friends, and 
day care centers. Allowing not-for-profit organizations eligibility for 
tax credits would, for those recipients able to find employment in 
their communities, significantly reduce the travel burden and in turn, 
help to reduce the critical day care problems faced by those hoping to 
move from welfare to work.

  Despite the ideal match between the mission, location, and type of 
jobs offered by not-for-profits, they have not participated in the 
welfare to work initiative to the extent we would like because 
insufficient resources have been made available to them to help offset 
the added costs involved in hiring those on welfare. CEPA would help to 
overcome this obstacle by reducing the largest tax burden faced by not-
for-profits--the payroll tax--by allowing them to offset their total 
Federal payroll tax burden by any work opportunity tax credits earned 
for hiring an eligible worker. The Community Employment Partnership Act 
would: Track the existing eligibility standards for the work 
opportunity tax credit; and provide not-for-profits with a graduated 
tax credit against their total Federal payroll taxes of 20 percent 
versus 25 percent under WOTC from the date of hire for the first $6,000 
in wages paid an eligible worker by a not-for-profit for those who work 
at least 120 hours and to up 399 hours; and 30 percent versus 40 
percent under WOTC from the date of hire for the first $6,000 in wages 
paid an eligible worker by a not-for-profit for those who work at least 
400 hours.
  The reduction in the credit amounts equalize the value of the credit 
between nonprofit employers and for-profit employers. This is because 
under WOTC, the amount of the employer's wage deduction is reduced by 
the amount of the credit which has the effect of reducing the value of 
the tax incentive to the for-profit employer.
  The credits would be taken against a not-for-profit employer's 
quarterly payroll tax liability.
  A payment to the Social Security trust fund would continue to be 
treated as having been made on the date it is ordinarily made.
  Both Congresswoman Lowey and I strongly believe that the enactment of 
the Community Employment Partnership Act is important if we are to 
enlist the not-for-profit community into providing good jobs to the 
millions of Americans who will be coming off the welfare rolls in the 
coming years.

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