[Congressional Record Volume 147, Number 133 (Friday, October 5, 2001)]
[Extensions of Remarks]
[Page E1809]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     STATEMENT ON THE TEMPORARY UNEMPLOYMENT COMPENSATION (TUC) ACT

                                 ______
                                 

                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                       Thursday, October 4, 2001

  Mr. CARDIN. Mr. Speaker, as our economy enters a period of great 
uncertainty, Congress can take at least one step that will protect the 
families most imperiled by mounting job losses, while simultaneously 
stimulating consumer demand and economic growth. In short, we should 
improve our unemployment compensation (UC) system. Expanding, extending 
and supplementing UC coverage will put more money into the pockets of 
the families most affected by economic dislocations and most likely to 
spend quickly.
  I am therefore introducing the Temporary Unemployment Compensation 
Act to improve our Nation's response to rising unemployment levels. The 
bill would draw down funds from the federal unemployment accounts for 
one year to: (1) provide benefits to certain unemployed workers who are 
now not covered by the Unemployment Compensation system; (2) extend 
benefits by 13 weeks to workers whose regular UC has expired; and (3) 
supplement the amount of unemployment benefits. Over the next year, 
these provisions would provide UC benefits to over one million jobless 
Americans who otherwise would go without any assistance, they would 
extend UC coverage to roughly 3 million individuals whose regular 
benefits have expired, and they would increase the amount of 
unemployment payments to 9 million displaced workers. With new claims 
for unemployment benefits recently reaching their highest level in nine 
years, it is imperative that Congress and the Administration consider 
these reforms in the quickest possible time frame.
  Any effort to improve our unemployment system must start with the 
recognition that many dislocated workers, particularly low-wage 
workers, do not receive assistance from the current system when they 
are laid off. The General Accounting Office (GAO) reported last 
December that while low-wage workers were twice as likely to become 
unemployed, they were only half as likely to receive UC benefits 
compared to higher-wage workers, even when employed for similar periods 
of time. The GAO cited the fact that only 18% of unemployed lowwage 
workers were receiving Ul benefits compared to 40% of higher-wage 
workers. This problem may track a general reduction in the percentage 
of unemployed Americans who actually receive UC benefits (which has 
declined over the last few decades from about one-half to about one-
third).
  Over the last few years, Congress has received repeated 
recommendations to correct this situation. Groups suggesting changes 
include: the Advisory Council on Unemployment Compensation, which was 
jointly appointed by Congress and the President; the Committee for 
Economic Development, which is led by leaders in business and academia; 
and a group of state, federal, business and labor stakeholders in the 
UC system. All of these organizations highlighted two issues that must 
be addressed. First, too many unemployed workers are denied UC because 
their most recent wages are not counted. (Many States do not count the 
last completed quarter of work). And second, part-time workers are 
sometimes discriminated against in the UC system. To begin to address 
these inequities, the TUC Act would provide federally-funded UC 
coverage for one year to jobless workers who would be otherwise 
ineligible because their last completed quarter of employment was not 
included in their wage record, and to unemployed workers seeking part-
time employment.
  As unemployment creeps up, it becomes increasing difficult for 
dislocated workers to quickly find new jobs. For this reason, Congress 
also should consider increasing the duration of unemployment benefits, 
particularly since the current law provision providing an extension of 
benefits has proven ineffective. In fact, since 1983, only 12 States 
have triggered on to the current Extended Benefits (EB) program. 
Because changes to the existing EB program would demand time-consuming 
changes to many State's laws, this legislation would establish a new, 
temporary program that would provide an additional 13 weeks of benefits 
to individuals whose regular UC expires. Like the coverage for certain 
newly eligible workers, these extended benefits would be federally-
funded and would continue requirements that recipients seek work.
  One final area that deserves attention is the adequacy of UC 
benefits. Unemployment benefits generally replace 50% or less of lost 
wages, leaving many workers hard-pressed to meet their monthly bills. 
This is particularly true in many urban and suburban areas where 
housing costs have exceeded inflation over the last decade. 
Furthermore, many States have relatively low average and maximum UC 
payment rates (the average weekly UC payment in the US is about $230). 
Finally, UC wage replacement rates were never adjusted to account for 
the fact that unemployment benefits were made fully taxable in 1986. 
This tax policy was enacted to ensure equity among families with the 
same amount income but from different sources. However, it has had the 
effect of reducing the value of UC benefits by about 15%. Therefore, to 
restore the value of unemployment benefits, while also maintaining 
equity in the tax code, this legislation would increase every UC 
recipient's weekly check by 15% for the next year.
  Mr. Speaker, we have over $38 billion in the Federal Unemployment 
Trust Funds. Those reserves are designed just for this purpose--
responding to rising unemployment. We should spend a portion of those 
funds to help Americans face the uncertainties and hardships that come 
with increased joblessness. The Temporary Unemployment Compensation Act 
will put those monies to good use by expanding, extending and 
increasing unemployment coverage just when it is needed most. Thank 
you.

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