[Congressional Record Volume 144, Number 138 (Tuesday, October 6, 1998)]
[Senate]
[Pages S11583-S11584]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DeWINE:
  S. 2556. A bill to amend the Internal Revenue Code of 1986, the 
Social Security Act, the Wagner-Peyser Act, and the Federal-State 
Extended Unemployment Compensation Act of 1970 to improve the method by 
which Federal unemployment taxes are collected and to improve the 
method by which funds are provided from Federal unemployment tax 
revenue for employment security administration, and for other purposes; 
to the Committee on Finance.


               employment security financing act of 1998

 Mr. DeWINE. Mr. President, today I introduce the Employment 
Security Financing Act of 1998, a bill which seeks to reform the 
unemployment insurance program by giving states greater control over 
the management of their unemployment insurance system.
  Specifically, under this legislation, beginning January 1, 2000, 
states would begin to collect Federal unemployment taxes, or ``FUTA 
taxes,'' in addition to the state unemployment taxes that they 
currently collect. The legislation also repeals the ``temporary'' 0.2 
percent FUTA surtax in 2004, restructures the accounts in the 
Unemployment Trust Fund and reduces paperwork for employers. Most 
importantly, this legislation will return to the states the funding 
necessary to effectively operate their employment security systems and 
services.
  Reform of the unemployment insurance program is essential to a state 
like Ohio which receives less than 39 cents of each employer FUTA 
dollar. This shortfall in funding has led to the closing of 22 local 
employment service offices during the past four years. In order to make 
up for the shortfall of FUTA dollars, the Ohio legislature has 
appropriated more than $50 million during the last four years to pay 
for employment services, something that should be funded by FUTA 
dollars. This appropriation of state tax dollars forces Ohio taxpayers 
to pay twice to fund unemployment services.
  Ohio is not alone--since 1990, less than 59 cents of every employer 
FUTA tax dollar has been returned to the states for funding employment 
security. As a result, $2 billion sits in Federal accounts rather than 
being used as it was intended--to help put people back to work.
  This is an important issue that Congress needs to consider. While 
this legislation obviously will not be considered before adjournment, I 
look forward to working with Representative Clay Shaw, the House 
sponsor of this bill, on legislation that can meet the budget rules, 
yet still achieve necessary reform of the unemployment insurance 
program.

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