[Congressional Record (Bound Edition), Volume 162 (2016), Part 2]
[Extensions of Remarks]
[Pages 2042-2043]
[From the U.S. Government Publishing Office, www.gpo.gov]




        INTRODUCTION OF THE REDUCING LONG-TERM UNEMPLOYMENT ACT

                                 ______
                                 

                       HON. ELEANOR HOLMES NORTON

                      of the district of columbia

                    in the house of representatives

                       Tuesday, February 23, 2016

  Ms. NORTON. Mr. Speaker, today, I introduce the Reducing Long-Term 
Unemployment Act, to address one of the lingering workforce tragedies 
in today's economy--our long-term unemployed--and to keep the economy 
growing. Although the overall unemployment rate has fallen below 5 
percent, Americans who have remained unemployed for longer than 27 
weeks have not enjoyed a similar recovery. In January 2016, the number 
of long-term unemployed (those jobless for 27 weeks or more) was 2.1 
million, which accounted for 26.9 percent of the total unemployed 
population.
  To make matters even worse, the long-term unemployed now face 
employment discrimination as employers show reluctance to hire job-
seekers because of the length of their unemployment. Therefore, my bill 
provides a necessary incentive to hire the long-term unemployed--a 
$5,000 tax credit for employers 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 the hiring and 
wages of those who have been unjustifiably left behind, while ensuring 
that the economy benefits from their participation. 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 in order to 
take advantage of the incentive.
  For some time, it has been clear that targeted policies are necessary 
to address today's stubborn long-term unemployment rates. Without 
significant targeting, the long-term unemployed are in danger of 
becoming permanently unemployed. This group of competent and 
experienced Americans deserves better.
  I urge my colleagues to support this bill.

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