This Subcommittee’s last hearing focused on criticism of the Administration for offering too much flexibility to the States and today’s seems to focus on the Administration offering too little flexibility for waivers with another program. Sometimes I get the feeling that for our Republican colleagues, the porridge is either too hot or too cold but never just right so long as it is President Obama’s Administration doing the serving.
Rather than repeat past partisan battles, I would like to focus on policies that show real promise in helping more unemployed Americans return to work--both reviewing implementation of our recently adopted reforms, and considering new improvements.
Unfortunately, right now as we meet, about 90,000 Texans face across-the-board cuts due to sequestration that is cutting benefits to those who can least afford it and scaling back some of the very reforms that we enacted last year. Sequestration is now hitting the unemployed with a triple whammy. It cuts federal unemployment benefits by over 10% - hitting nearly two million Americans with a reduction in their already meager weekly income. It reduces funding for the employment services designed to help folks return to work, including some of the new reforms passed just last year. And according to the Congressional Budget Office, sequestration hurts the job market by reducing employment by 750,000 jobs by the end of this year. These cuts only compound the fact that eight states have reduced the duration of state unemployment benefits to less than 26 weeks.
We all talk about wanting to get people back to work, but that is just empty talk if we fail to provide folks with the tools do so. We will hear today from one of our witnesses, Judy Conti about at least one area that is ripe for improvement: the need to strengthen our Nation’s Employment Service system to provide early and intensive personal assistance to those unemployed.
Last year, Congress enacted a series of changes to UI law that were a step in the right direction. The law included a reform I worked on to encourage entrepreneurship among the unemployed. The provision allows a limited number of individuals receiving federal unemployment benefits to participate in self-employment programs, under which they attempt to establish their own business rather than search for a job. This approach is obviously limited in its reach, but there is some evidence that participants in these programs are more likely to obtain employment than other UI recipients. The legislation also sought to promote work sharing programs in which workers with reduced hours receive a partial UI check when employers use such a strategy to avert layoffs. These initiatives have shown lots of promise in the 26 states that have adopted work sharing programs.
There was a provision related to providing waivers under the UI program to promote subsidized employment, and a provision permitting drug testing for a limited group of UI applicants. While I have doubts about how useful this is-as the experience to-date does not indicate that any purported savings exceed the cost of the testing -as outlined in federal statute, the drug testing provision is narrowly focused. If it is done, at all, it seems that the bill that has passed the Texas Senate sponsored is the way to go. Sen. Williams has developed a bipartisan proposal that has gained support from Democrats and Republicans alike.
Again, as we sit here today, we need to realize that when it comes to helping the unemployed our first and most immediate goal should be to find a sensible and balanced alternative to the budget cuts in the sequester.
The best remedy to unemployment is a strong economy. Blunting economic growth through misguided budget cuts, or by once again threatening to default on our nation’s debt, hurts all Americans, but it is the biggest slap in the face to the unemployed. They simply can’t afford any more self-inflicted wounds coming from Washington.
Mr. Chairman, I look forward to hearing from our witnesses and to working to promote broad economic growth, while also supporting specific policies that help unemployed Americans return to work. Thank you.
