[Congressional Record Volume 149, Number 69 (Friday, May 9, 2003)]
[Extensions of Remarks]
[Pages E921-E922]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 A BILL TO PERMANENTLY EXTEND THE WORK OPPORTUNITY AND WELFARE-TO-WORK 
                  TAX CREDITS AND IMPROVE THE PROGRAMS

                                 ______
                                 

                           HON. AMO HOUGHTON

                              of new york

                    in the house of representatives

                          Friday, May 9, 2003

  Mr. HOUGHTON. Mr. Speaker, today I am joined by my colleague from New 
York, Mr. Rangel, in introducing our bill, ``Encouraging Work Act of 
2003.'' The bill would permanently extend the Work Opportunity Tax 
Credit (WOTC) and the Welfare-to-Work Credit (W-t-W) and make other 
changes discussed below. Both programs are currently due to expire on 
December 31, 2003. The credits are tax incentives designed to encourage 
employers to hire public assistance recipients and other individuals 
with barriers to employment. They are important tools in our efforts to 
help needy individuals become productive employees.
  Improvements in the programs the past few years have made WOTC and W-
t-W far more effective in providing employment, with training, for our 
nation's disadvantaged. Such training can be costly and the credits 
provide an incentive to employers to hire the disadvantaged and provide 
the needed training while

[[Page E922]]

offsetting costs associated with the latter effort.
  Of course, many believe the programs would be even more successful if 
they could be extended indefinitely. We hear from both employers and 
state job services, which administer the programs, that the continued 
uncertainty surrounding short-term extensions impedes expanded 
participation and improvements in program administration. If the 
programs were made permanent, employers, both large and small, would be 
induced to expand their recruitment efforts and encourage the states to 
improve the administration of the programs. Such a change would benefit 
everyone.
  WOTC provides employers a 40-percent tax credit on the first $6,000 
of wages paid to those from targeted groups who are working at least 
400 hours, or a partial credit of 25 percent for those working 120-399 
hours. W-t-W provides employers a 35-percent tax credit on the first 
$10,000 of wages for those leaving welfare and working 400 hours in the 
first year. In the second year, the W-t-W credit is 50 percent of the 
first $10,000 of wages paid to qualifying employees.
  In addition to making the credits permanent, our bill would simplify 
WOTC and W-t-W, as President Bush recommended in the Administration's 
FY 2004 budget, by combining them into one credit and making the rules 
for computing credits simpler. Among other changes, the bill would 
expand the food stamp category by increasing the age limit from 24 to 
39 years of age for members of food stamp households and residents of 
enterprise zones or renewal communities (``a designated community 
resident''). The current ceiling of 24 limits the availability of 
individuals in these targeted categories. There are many individuals, 
over the age of 24, who could be gainfully employed if the age limit 
was expanded. Currently, the programs do an excellent job of helping 
women on welfare enter into the workforce. Over 80 percent of the hires 
in the programs are women. However, men from welfare households face a 
greater barrier to employment because they are no longer eligible for 
welfare once they turn 18. However, they can qualify up to age 24 if 
they are a member of a household receiving food stamps or live in an 
enterprise zone or renewal community. We believe increasing the age 
limit to 39 will provide employers an incentive to hire more ``at-
risk'' males and provide them with a sense of personal responsibility 
and self-esteem in assuming their responsibilities as parents and 
members of society.
  More than 80 percent of the 2.2 million individuals hired under the 
WOTC and W-t-W programs were previously dependent on public assistance 
programs. However, during periods of slow economic growth and rising 
unemployment, employers have more hiring options. The jobs skills of 
those coming off welfare today--many because they have reached their 5-
year life time eligibility ceiling--are even less than the first 
generation that left the welfare rolls. Because of the high cost of 
recruiting, training, supervising low-skilled individuals, many 
employers will look elsewhere for employees if these programs are not 
renewed before the end of the year. WOTC and W-t-W are proven 
incentives for encouraging employers to seek employees from the 
targeted groups.
  We urge our colleagues to join us in cosponsoring this important 
legislation to extend and improve the two programs.

                          ____________________