[Congressional Record (Bound Edition), Volume 157 (2011), Part 10]
[Extensions of Remarks]
[Pages 14346-14347]
[From the U.S. Government Publishing Office, www.gpo.gov]




   INTRODUCTION OF THE ECONOMIC GROWTH AND REDUCING UNEMPLOYMENT ACT

                                 ______
                                 

                       HON. ELEANOR HOLMES NORTON

                      of the district of columbia

                    in the house of representatives

                       Friday, September 23, 2011

  Ms. NORTON. Mr. Speaker, I rise today to introduce the Economic 
Growth and Reducing Unemployment Act, to address perhaps the two 
greatest workforce tragedies resulting from today's economy--our long-
term unemployed and our unemployed young people--and to spur economic 
growth. Since Republicans took control of the House of Representatives, 
many Democrats have tried to get them to shift from their one-sided, 
cuts-only fiscal policy to taking some steps to more quickly reduce 
stubborn unemployment throughout the country. Republican austerity 
policies, as predicted by history and Economics 101, have driven the 
economy into another ditch, with the possibility of a double-dip 
recession. We need to reduce the country's budget deficit and debt in 
the long term, but as virtually every economist and the Federal Reserve 
chair himself have said, we must also create jobs and stimulate the 
economy now, before it is too late. While 14 million Americans are 
unemployed, my bill targets those particularly hard hit by 
unemployment. In August 2011, the number of long-term unemployed (those 
jobless for 27 weeks or more) was six million, which accounted for 42.9 
percent of the total unemployed population. In July 2011, the number of 
unemployed youth 16 to 24 years old was 4.1 million.
  To make matters even worse, the unemployed now face employment 
discrimination and employers are reluctant to hire the long-term 
unemployed because of the length of their unemployment. My bill would 
give employers a $5,000 tax credit against their payroll tax liability 
for each (net) new long-term unemployed person they hire. The tax 
credit is large enough to give employers an incentive to increase 
hiring and wages, which would inject demand into the economy. The 
credit would be available to the broadest base of employers because 
every employer--government, non-profit and for-profit--pays payroll 
taxes, and employers could claim the credit on a quarterly rather than 
annual basis. According to the independent, non-partisan Congressional 
Budget Office, the proposal would ``increase both output and 
employment,'' through four mechanisms: (1) with lower employment costs, 
employers would reduce the costs of their products and services, which, 
in turn, would first boost sales and then hiring and hours worked; (2) 
employers would pass on some of the tax savings to employees in the 
form of higher wages or other compensation, which, in turn, would 
increase employees' purchasing power; (3) higher profits would lead to 
higher stock prices for public companies, increasing shareholders' 
wealth and therefore their willingness to spend; and (4) with lower 
employment costs, employers would increase hiring. The bill has 
safeguards to prevent employers from gaming the system, including 
denying a credit to an employer that fires one employee and hires a 
replacement.
  Particularly disappointing as well is the high unemployment rate for 
young people who heeded our advice to graduate from high school and 
college, only to try to enter the workforce in the worst economy in 
generations. By significantly expanding AmeriCorps, my bill, without 
needing a new administrative structure or bureaucracy, would allow 
unemployed young people to earn a stipend sufficient to support 
themselves and to obtain work experience and a good work history to 
help them obtain future employment. The net cost of the expansion would 
be low, because these young people would be providing urgently needed 
local services that are being dropped or curtailed because of federal, 
state, and local budget cuts, such as after-school programs, tutoring, 
and assistance for the elderly.
  The bill would significantly expand job opportunities for young 
people who have played by the rules but find themselves unemployed in 
this economy. The bill would increase the number of participants in the 
AmeriCorps State and National program from approximately 78,000 to 
500,000 full-time participants. Participants receive a living 
allowance, which most find sufficient to meet their basic needs, and 
are also eligible for an education award equal to the value of a Pell 
grant, for school-loan forbearance, health care benefits and child care 
assistance. By expanding the program, we would reduce the number of 
unemployed young people, provide them with the work skills and 
experience they would not get while unemployed, and help cash-strapped 
states and local governments provide services that they would otherwise 
have to cut.
  For some time, it has been clear that policies to address today's 
unusually stubborn unemployment need to be targeted in order to be 
effective. The long-term unemployed and unemployed young people are the 
two groups that have been hardest to reach in prior measures. Without 
significant targeting, the long-term unemployed are in danger of 
becoming

[[Page 14347]]

permanently unemployed and young graduates will face their first years 
as adults without jobs and with no way to acquire work experience. Both 
groups deserve better. I ask the House of Representatives to support 
this bill because it targets both of these neglected groups of 
Americans.

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