Senator Sarbanes Introduces Unemployment Benefits Extension Act

Mr. SARBANES. Mr. President, I rise today in support of The Unemployment Benefits Extension Act of which I am a proud cosponsor. The purpose of this bill is to extend the Temporary Extended Unemployment Compensation, TEUC, program, for an additional 6 months through the end of November. Currently, extended umeployment insurance benefits are scheduled to expire at the end of May. Beginning June first, individuals whose regular unemployment benefits expire will no longer be eligible for extended benefits.

Extending the existing unemployment insurance benefits program for an additional 6 months is estimated to provide assistance to between 2 to 2.5 million working Americans who have lost their jobs through no fault of their own. This legislation also provides an additional 13 weeks of benefits to unemployed workers who have already exhausted their extended benefits prior to enactment and remain unable to find work. The bill also provides tempory Federal funding, through July 2004, for States to implement alternative base periods, which could a worker's most recent wages when determining eligibility, and to allow displaced part-income workers to seek part-time employment while receiving unemployment insurance workers. Improving the unemployment insurance system for part-time workers is important. A recent op-ed in the Baltimore Sun makes the point that:

The old rationale for excluding part-time workers from unemployment insurance eligibility was that part-time workers were not working to support their families. But this is not true today.

I am convinced that we are going to still be in very difficult shape when the current extension of unemployment insurance benefits expires at the end of May. There is little chance that the labor market will significantly improve for unemployed workers between now and then. There is growing evidence that the labor market is still in fact deteriorating. The Federal Open Markets Committee's most recent statement on interest rates concluded that, "recent labor market indicators have proven disappointing."

That is an understatement. Last month the economy lost 108,000 jobs in addition to losing 357,000 jobs in February. There are 1.8 million workers who have been out of work for more than 26 weeks and are looking for work but cannot find a job. The unemployment rate at 5.8 percent is higher today than when extended benefits were first enacted in March, 2002. Over 3.48 million Americans are currently drawing unemployment benefits. We have lost 2.6 million private sector jobs since President Bush took office. No President in over 50 years has failed to create jobs during a 4-year term in office, let alone lose jobs during an administration. But it would take private sector job creation of over 100,000 per month, every month, for the next 2 years, in order for the economy to dig out of the jobs deficit created during this administration.

Yet instead of abandoning the economic policies which have failed, the administration continues to pursue the same fundamental policy—large tax cuts which primarily benefit the wealthiest Americans. The administration, whose budget contained nothing to further extend the unemployment benefits program, remains out of touch with today's economic realities. Over 8.5 million Americans are unemployed and looking for work but cannot find a job because there are no jobs to be had. In situations like this the Congress has always provided extended unemployment benefits. In the last recession these benefits were provided for 29 months. During the recession before that, they lasted for 33 months. In both of those recessions extended benefits were discontinued only after a pronounced strengthening in the labor market.

Today these benefits are set to expire after only 15 months, well before the labor market has improved. If this happens it will mark not only a departure from prudent fiscal policy that has been implemented in a bipartisan fashion in the past but will also harm economic growth and hurt millions of Americans. Extended unemployment insurance benefits, already enacted by the Congress, have assisted 4.7 million workers and provided $12 billion of stimulus into the economy. Federal Reserve Chairman Greenspan has testified that, "extended unemployment insurance provided a timely boost to disposable income."

This legislation also allows for all Americans who qualify to receive an additional 13 weeks of benefits. This would include the 1 million workers who have already exhausted their extended benefits. These workers need help. They want to find work but cannot find a job because there are simply no jobs to be had.

I know that some of my colleagues oppose providing extended benefits for more than 13 weeks to anyone. I have a differing viewpoint. I point out that at this stage of the last recession, a minimum of 20 weeks of additional Federal benefits were provided for all Americans in every State. In the previous recession and jobless recovery extended unemployment insurance benefits lasted for 29 months and for much of that time provided benefits for 26 to 33 weeks. In this recession and jobless recovery, benefits are scheduled to expire only after 15 months and have provided only 13 weeks of extended benefits to the vast majority of Americans.

Under normal circumstances with a growing labor market there is a case to be made that providing too long of a duration of unemployment insurance benefits would be harmful. However, in times when the labor market is weak and the job base is shrinking, the situation is very different. Even Fed Chairman Greenspan acknowledged this in testimony before the Joint Economic Committee, stating: "in periods like this [a shrinking labor market], that the economic restraints on the unemployment insurance system almost surely ought to be eased." Unfortunately, many are forecasting continued weaknesses in the labor market.

Today's Washington Post reports that the International Monetary Fund is forecasting economic growth of only 2.2 percent for the United States in 2003, which the IMF's chief economist, Kenneth Rogoff noted is "not yet enough to make a meaningful dent in unemployment." The article goes on to state that: "the jobless rate stood last month at 5.8 percent, and the IMF projected that it will average 6.2 percent this year." Considering the weak labor market that we face today and the troubling forecasts for the remainder of the year, it appears to me that we most certainly are in such a period as described by Chairman Greenspan and that the restraints on the unemployment insurance system ought to be eased. This legislation accomplishes this goal in a fiscally responsible manner with an estimated cost of $16 billion, which is below the unemployment insurance trust funds current surplus of $20 billion.

Last year this issue was not properly dealt with, and as a result millions of Americans suffered through the holiday season believing that their benefits were going to expire. Yet when Congress reconvened, extended benefits were retroactively restored, 11 days after they had expired. Let's not put these people through this again. I urge my colleagues to support this legislation and to work expeditiously and prudently to enact it before the current program expires, less than 8 weeks from today.