ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS
Subcommittee on Human Resources

FOR IMMEDIATE RELEASE, Contact: (202) 225-1025
June 16, 1998
No. HR-15

Shaw Announces Hearing on H.R. 3684,
the "Employment Security Financing Act of 1998"

Congressman E. Clay Shaw, Jr., (R-FL), Chairman, Subcommittee on Human Resources of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on H.R. 3684, the "Employment Security Financing Act of 1998." The hearing will take place on Tuesday, June 23, 1998, in room B-318 Rayburn House Office Building, beginning at 3:00 p.m.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only. Witnesses will include State government and unemployment officials, business leaders, and other experts in the administration of the Federal-State unemployment insurance and employment security programs. Any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.

The Federal-State unemployment insurance (UI) system provides temporary benefits to individuals with a recent work history who become involuntarily unemployed. Federal taxes generally support the administrative expenses of the UI system, along with the cost of providing employment services (ES) that assist individuals in returning to the workforce; State taxes support unemployment benefits.

Increased skepticism about the efficiency of the system, and especially its administration, has been one of several reasons fueling calls for reform. In recent years, various States, employer groups, and think tanks have developed proposals to reform the administrative financing of the system. Chairman Shaw has introduced a reform proposal, H.R. 3684, designed to increase State flexibility and accountability in fulfilling the UI/ES system's mission. Proponents of this approach argue that it would cut business paperwork, improve efficiency in labor markets, and finance more and better employment services for jobless workers, speeding their return to work and allowing States to increase unemployment benefits or reduce payroll taxes.

H.R. 3684 proposes numerous changes aimed at improving the administration and efficiency of the UI program. As contemplated by the legislation, little would change from a recipient standpoint. Benefits would continue to be set by States and paid for with State taxes, as part of a national system that meets due process standards. However States, aided with new Federal funds, would begin collecting all taxes that support the system, cutting business paperwork and unemployment tax filings in half. In addition, Federal unemployment taxes would return to their historic levels with the elimination of the 0.2 percent Federal Unemployment Tax Act surtax in 2004.

As contemplated under the bill, service would likely improve as States take a keener interest in getting the jobless back to work. The bill would envision that as States, encouraged by administrative financing changes phased in beginning in 2003, build up trust accounts through improved collections, greater efficiency, and quicker returns to work, they would have more funds to expand employment services or reduce State payroll taxes or both. States with small workforces would receive special payments to ensure that they could continue to meet local needs. Current program features providing extended benefits and special assistance for veterans and the disabled would remain in place.

The Administration has also offered a proposal, introduced by Representatives Levin and English, that is aimed at assuring that the current UI program fulfills its mission and remains on sound financial footing. This proposal, H.R. 3697, the "Unemployment Compensation Amendment Act of 1998," would ensure extended UI benefits trigger on appropriately during a recession, encourage States to improve the solvency of their respective unemployment trust funds, help States voluntarily improve their methods for calculating the base periods used for determining UI eligibility, and provide more administrative funding for the States.

In announcing the hearing, Chairman Shaw stated: "This Subcommittee should consider ways to improve the nation's employment security system to benefit workers and employers and especially jobless Americans. H.R. 3684 has broad support among States and the business community because it would enhance program efficiency, cut payroll taxes, and get the jobless back to work sooner. The time is now -- when unemployment is low and Federal coffers are full -- to consider changes to help us better respond to workers' needs in future recessions."

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Any person or organization wishing to submit a written statement for the printed record of the hearing should submit six (6) single-spaced copies of their statement, along with an IBM compatible 3.5-inch diskette in WordPerfect 5.1 format, with their name, address, and hearing date noted on a label, by the close of business, Wednesday, July 8, 1998, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Human Resources office, room B-317 Rayburn House Office Building, at least one hour before the hearing begins.

Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1. All statements and any accompanying exhibits for printing must be submitted on an IBM compatible 3.5-inch diskette WordPerfect 5.1 format, typed in single space and may not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.

4. A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers where the witness or the designated representative may be reached. This supplemental sheet will not be included in the printed record.

The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press, and the public during the course of a public hearing may be submitted in other forms.

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.