Opening Statement of the Hon. Wally Herger, a Representative in Congress from the State of California,
and Chairman, Subcommittee on Human Resources

Hearing on the President's Unemployment Administrative Financing Reform Initiative

March 5, 2002

Good afternoon and welcome to our hearing. The subject of today’s hearing is the Administration’s proposal for reform of the administrative financing provisions of the nation’s unemployment system. 

Our unemployment compensation program provides much-needed relief to millions of hardworking Americans, particularly in tough economic times.  It operates as a unique partnership between the federal government, states, employers, and workers to help those who lose their jobs through no fault of their own as they transition to new jobs. 

It is not a perfect system, and as Committee Members and those of you in the audience who follow the unemployment issue know, a series of hearings on this issue have been held over the past few years. 

You also know that Members of this Committee have, over a number of years, introduced a variety of bills developed to improve the system and have a number of views on the best way top accomplish that goal.

With unemployment rates high, state trust fund balances shrinking, and a shaky economy, it is more important than ever that we take a look at the current system and find ways to make it better.

I was very encouraged when the President’s fiscal year 2003 budget included a proposal to improve the administrative financing of our unemployment system and I am looking forward to the Administration’s presentation.

The plan as outlined in the fiscal year 2003 budget material will allow payroll taxes to flow more directly to states, give states more flexibility to run their unemployment and employment services programs, lower the tax burden for businesses so they can create more jobs, continue federal support for the extended benefit and loan programs, and help workers by making the extended unemployment program more responsive.