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Hearing of the Human Resources Subcommittee of the House Ways and Means Committee - Unemployment Insurance System


Location: Unknown

"Thank you, Mr. Chairman.

"Extending a hand to Americans who have lost their job through no fault of their own and who are out searching for new opportunities is the right thing to do for our economy and for millions of our fellow Americans. Unemployment benefits helped, in a significant way, to avoid a very bad recession from becoming a catastrophic depression by helping folks put food on the table, a roof over their families' heads, and provide clothes for their children to go to school.

"Overall, our economy is making some progress, as evidenced by the nearly 3.5 million jobs that have been created over the last two years. But even with this improvement, there is still considerable work to do: we still have roughly 5 million fewer jobs than when the recession started in December 2007, before this administration took office.

"Though there has been some good news in Texas, according to the Center for Public Policy Priorities in East Austin, we still have a shortfall in Texas of almost three-quarters of a million jobs, accounting for the state's job losses and booming population. In San Antonio, for example, almost 40,000 workers are receiving unemployment benefits and more than half of those have been unemployed for at least six months. In Travis County, almost 25,000 unemployed workers are claiming benefits.

"Last week, the San Antonio Express News held a job fair that attracted 1,400 people, including Amanda, a 46-year-old trained medical assistant, who has been searching for a job for six months without success.

"It is vital that we maintain the unemployment insurance lifeline for families who want to work but have not yet been able to find a job. I am therefore glad that a number of our Republican colleagues -- after dragging their feet and creating an unnecessary crisis for too many families -- finally joined Democrats in maintaining emergency unemployment benefits through the end of 2012.

"I am also pleased that the final legislation included a number of reforms designed to promote employment. Last year, I worked with Senator Ron Wyden of Oregon on legislation to encourage more states to promote entrepreneurship among the unemployed by allowing under certain conditions those who are unemployed to use their resources to help establish small businesses. I think this is a program with much potential for some of the unemployed and I look forward to hearing from the Secretary and others about how that potential can be achieved.

"The final legislation also contained provisions to avert layoffs through work sharing programs, in which individuals receive partial unemployment checks when their work hours are cut. Additionally, the measure included a recommendation from the Obama Administration to require all recipients of emergency UI to undertake reemployment assessments. And there are some demonstration projects that will be conducted by the Secretary of Labor to explore other alternatives which we can discuss this morning.

"As we review how states are responding to the various changes in Federal law related to unemployment benefits, we need to acknowledge that a much bigger challenge is looming for many states. Thirty states now owe the federal government $41 billion in UI loans and several other state unemployment programs, including my home State of Texas, have borrowed from the private market.

"The magnitude of the recession had an obvious impact in driving up insolvency, but truthfully, a number of these States failed to make preparations for even a mild recession, much less a more severe one like that we experienced. A system that was more forward funded would have averted many of these outcomes. I look forward to suggestions about how we can create an unemployment insurance system that does a better job of saving for the future and protecting those who need it in an economic downturn."

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