Senate to Vote on Plan to Renew Assistance for U.S. Job Hunters

Press Release

While the Republican leadership in Congress appears to want to end emergency unemployment insurance (UI) because they claim it discourages job hunters from actively seeking work, U.S. Senator Jack Reed (D-RI) is offering a new, short-term proposal to renew UI, restore benefits for 1.7 million American job seekers, and help reduce the national deficit by $1.2 billion.

"Congress must come together to improve our economy, help create jobs, and put people back to work. UI is a lifeline for job seekers and renewing it will improve our economic outlook by bolstering consumer demand at a critical time. If the Republican leadership continues to block these benefits, it won't benefit economic growth," said Reed.

Reed's legislation offers a clean continuation of emergency UI for 3 months, retroactive to December 28, 2013. It is offset by extending the "pension smoothing" provision that was passed on a bipartisan basis in 2012 and begins to phase out this year -- resulting in higher pension payments by employers because extremely low interest rates require them to make higher than normal pension contributions. The offset would extend pension smoothing relief for four years by allowing companies to use historic interest rate averages in calculating their pension contributions.

Further, the legislation includes a provision modeled on Senator Tom Coburn's (R-OK) that ends unemployment insurance payments to any individual whose adjusted gross income in the preceding year was $1 million or more. According to 2010 income tax data, there were 0.03% of filers that earned over $1 million and received some form of UI at either the state or federal level. The Coburn provision received unanimous support in the Senate when it was voted on in 2011.

Reed also noted the significant cost of inaction, citing a recent study by the Council of Economic Advisers and the U.S. Department of Labor that estimates that the failure to renew UI could cost our economy 240,000 jobs during 2014, including 1,284 in Rhode Island.

"Americans are concerned about the economy and worried about their own jobs and economic security. They want their government to be there for them when they need it. According to a recent FOX News poll, 69 percent of the American public wants to see Congress renew UI and help their neighbors," stated Reed. "This will be a crucial vote and a critical test of whether Congress can listen to the American people and come together to do what is in the best interest of our economy."

According to the Washington Post, "it takes the average job hunter almost eight months to get hired, data show, compared to less than five months before the recession." But because enough Republicans have blocked a renewal of emergency unemployment compensation since December 28, most states have now reverted to the pre-recession level of just 26 weeks of benefits, meaning the average worker may now very likely lose their benefits before they can find a new job.

And National Journal recently noted: "economic studies show that the condition of long-term unemployment can last into the next generation, affecting the education and job prospects of the children of today's sufferers."

"We can't afford to simply leave 1.7 million families behind," said Reed. "Congress should uphold its end of the bargain, and do on a bipartisan basis what it has done in similar situations: renew UI. Time is of the essence. It has been 7 weeks since Senator Heller and I introduced a bipartisan, short-term plan that was designed to provide immediate relief. Now here we are, over a month into 2014, still debating a 3 month fix while people who need help and deserve assistance are forced to go without as they desperately search for work. Congress should do its job and renew UI. Jobseekers today shouldn't bear undue hardship because of partisan gridlock."

Reed noted that the "pension smoothing" offset in the bill had bipartisan support in the 2012 Map-21 Transportation bill, which passed 79-19. The extension of this offset has also been proposed by members on both sides of the aisle for other matters.

"I know this is just a short-term solution. I support a long-term solution and will continue to press for that. But even if we can help get people through to Spring, when construction activity picks up and more jobs become available, it will provide a lift to our economy. So it is just a few more weeks, but for some people that extra week or two can mean the difference between working for minimum wage or finding a job that actually allows them to fully contribute their talents, education and training, and experience -- allows them to find a job and build a better life," concluded Reed.

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