[Congressional Record Volume 153, Number 5 (Wednesday, January 10, 2007)]
[Senate]
[Pages S387-S388]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself and Ms. Snowe):
  S. 248. A bill to amend the Internal Revenue Code of 1986 to 
permanently extend and modify the work opportunity credit, and for 
other purposes; to the Committee on Finance.
  Mr. BAUCUS. President, I am pleased to join my Colleague, Senator 
Snowe, in introducing legislation to improve and permanently extend the 
Work Opportunity and the Welfare-to-Work tax credits. Last year, I was 
pleased to help enact legislation that consolidated, streamlined, and 
extended these credits through the end of 2007. Now it is time to make 
these tax credits permanent.
  The current extension expires at the end of this year. So immediate 
action is needed to make these credits permanent and make several 
improvements to the programs to improve their effectiveness. Recurring 
lapses and extensions make administration of this credit burdensome 
both for the taxpaying employer, who cannot keep track of who is or is 
not qualified, and for the IRS, which needs to ensure that taxpayers 
are complying with the ever-shifting law. Last year, the program lapsed 
until late December, when Congress finally passed a retroactive 
extension.
  Over the past decade, the Work Opportunity Tax Credit, WOTC, and the 
Welfare-to-Work credits have helped more than 2.2 million public 
assistance dependent individuals to enter the workforce. These hiring 
tax incentives have demonstrated their effectiveness. They help to 
level the job selection playing field for low-skilled individuals. They 
provide employers with additional resources to help recruit, select, 
train and retain individuals with significant barriers to work. Many 
vulnerable individuals still need a boost in finding employment. And 
this is particularly important during periods of high unemployment. 
Without an extension of these programs, the task of transitioning from 
welfare-to-work will become even harder for individuals who reach their 
welfare eligibility ceiling.
  Because of the costs involved in setting up and administering a WOTC 
and Welfare-to-Work program, employers have established massive 
outreach programs to maximize the number of eligible persons in their 
hiring pool. The States, in turn, have steadily improved the programs 
through improved administration. WOTC has become an example of a true 
public-private partnership design to assist the most needy applicants. 
Without the additional resources provided by these hiring tax 
incentives, few employers would actively seek out this hard-to-employ 
population.
  The new combined WOTC and Welfare-to-Work credits provide employers 
with a graduated tax credit equal to 25 percent of the first $6,000 in 
wages for eligible individuals working between 120 hours and 399 hours 
and a 40-percent tax credit on the first $6,000 in wages for those 
working more than 400 hours. In the category of longterm welfare 
recipients, employers receive a maximum credit of $4,000, or 40 percent 
of qualified first year wages up to $10,000. Employers receive a 
maximum credit of $5,000, or 50 percent of qualified wages up to 
$10,000, for retaining for a second year individuals in the long-term 
welfare assistance category.

[[Page S388]]

  In my home State of Montana, many businesses take advantage of this 
program, including large multinational firms and smaller family-owned 
businesses. Those who truly benefit from the WOTC and Welfare-to-Work 
program, however, are low-income families under the Food Stamp Program, 
the Aid to Families with Dependent Children, AFDC, and Temporary 
Assistance for Needy Families, TANF, programs, and also low income U.S. 
Veterans. In Montana, more than 1,000 people were certified as eligible 
under the WOTC program during an 18-month period, October 2001 through 
March 2003, including 476 Food Stamp recipients, 475 AFDC or TANF 
recipients, and 52 U.S. veterans.
  The bill that we are introducing today provides for a permanent 
program extension of the combined credits. After a decade of experience 
with WOTC and Welfare-to- Work, we know that employers do respond to 
these important hiring tax incentives. Permanent extension would 
provide these programs with greater stability, thereby encouraging more 
employers to participate, make investments in expanding outreach to 
identify potential workers from the targeted groups, and avoid the 
wasteful disruption of termination and renewal. A permanent extension 
would also encourage the state job services to invest the resources 
needed to make the certification process more efficient and employer-
friendly.
  Finally, there are other changes in the bill that would extend these 
benefits to more people and help them find work. One change would 
increase the age of eligibility for those individuals seeking work who 
reside in enterprise zones or empowerment communities. Another change 
would include referrals from the Ticket to Work program in the 
Vocational Rehabilitation category. These two changes are modest 
improvements to the program.
  Further, this bill adds a new subcategory with an enhanced credit for 
employers who hire veterans with service-connected disabilities 
occurring on or after September 11, 2001. As of July 2006, nearly 
20,000 members of our Armed Forces were wounded in action in Operation 
Iraqi Freedom and Operation Enduring Freedom. Many of these veterans 
are now permanently disabled. Of these brave men and women who have 
been wounded, nearly 5,000 are members of the National Guard and 
Reserves. Our National Guard and Reserves are carrying a huge burden in 
our current conflicts abroad.
  Many of these wounded veterans come from rural States such as my home 
State of Montana. In Montana, we have the highest proportion of 
veterans per capita of any state. According to the most recent census, 
veterans account for nearly one out of every six people in Montana. And 
veterans and families of veterans constitute a significant portion of 
the population in rural states throughout the country.
  When not deployed, many National Guardsmen and reservists in Montana 
support their families with second and even third jobs. At any time, 
they can be deployed overseas, to our borders, or even to aid with 
national disasters such as hurricanes or forest fires. If they are 
injured or disabled, however, many become unable to perform the jobs 
that they did before deployment. They will need to transition into a 
new job or career. It is our duty to provide the proper means for 
veterans to make that transition. It is our duty to help them to live 
as independent citizens.
  Since August 2002, the share of veterans collecting unemployment 
insurance has nearly doubled. During any given year, half a million 
veterans across the Nation experience homelessness. We are not 
providing enough resources for veterans looking for work. We are too 
often failing our injured and our disabled veterans.
  Many seriously injured and disabled veterans simply do not know what 
they are going to do once they return home. We need to help these young 
men and women. And a modest tax incentive to get them back into the 
workforce is one place to start.
  I look forward to working with Senator Snowe to get a permanent work 
incentive for these individuals. And I encourage our Colleagues to join 
us in this effort.
                                 ______