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Hearing of the Trade Subcommittee of the House Ways and Means Committee - Moving from Unemployment Checks to Paychecks: Implementing Recent Reforms

Statement

By:
Date:
Location: Unknown

As we all know, we have been paying record Unemployment Insurance benefits for years now. Despite characterizations by some on the other side that this is the best stimulus money can buy, we know that the U.S. labor market remains in near-critical condition today:

There are 5 million fewer jobs today than the Administration predicted there would be at the end of 2010;

This is the slowest jobs recovery since data were first recorded in the 1930s;
Unemployment has been above 8 percent for 37 consecutive months, the longest stretch since the Great Depression;

Today's 12.7 million unemployed Americans are almost one million more than when President Obama took office; and

Today's 5.3 million long-term unemployed are more than double the number when President Obama took office.

Yet even those grim figures miss some major problems. For example, beyond the 12.7 million unemployed and 5.3 million long-term unemployed, millions more have simply stopped looking for a job. As this chart shows, the unemployment rate would be 11 percent today if these discouraged workers were counted as officially unemployed:

To address this desperate need to change direction, in February 2012 Congress passed and the President signed into law legislation originating from this Committee containing historic reforms of the nation's Unemployment Insurance (UI) system. When that legislation passed, the headlines often focused on how it extended Federal unemployment benefits through the end of the year -- with shortened durations and greater focus on the highest unemployment States. But the legislation contained much more, including what the Administration described last week as "the first major overhaul of the Unemployment Insurance system in decades." I would echo that sentiment.

In sum, these reforms are designed to help more unemployed people -- and especially more long-term unemployed -- get back to work.

Among other provisions, the legislation includes:
New job search requirements for people collecting extended unemployment benefits;
New "waiver" flexibility to test ways of using UI funds to help people get a job instead of just a benefit check;
New reemployment assessments designed to address obstacles the long-term unemployed have to taking a new job; and
New authority for drug screening and testing of some UI applicants.
The American people need these reforms to take effect quickly and to work effectively.

This hearing is designed to review the implementation of these reforms, as well as consider what additional steps may be needed. Members will hear from the Department of Labor as well as State and private sector experts about what these reforms are meant to accomplish, what has already happened, and what is yet to come in terms of their implementation.

We have some specific questions about how and why certain policies are being implemented the way they are, as well as about the challenges States and employers may have in adjusting to the reforms. But most importantly we will use this hearing to ensure these changes are being implemented in a way that will help more unemployed Americans trade benefit checks for paychecks.

That is our ultimate goal, and the standard by which this program should and will be judged.


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