ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON HUMAN RESOURCES

Herger Announces Hearing on
Unemployment Administrative Financing Reform Initiative

Congressman Wally Herger (R-CA), Chairman, Subcommittee on Human Resources of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on the Nation's Unemployment Compensation system and the Administration's proposal for reform. The hearing will take place on Tuesday, March 5, 2002, in room B-318 Rayburn House Office Building, beginning at 12:00 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 representatives from the U.S. Department of Labor, employer and employee organizations, and State workforce officials. However, 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.

BACKGROUND:

The Unemployment Compensation (UC) program provides benefits to unemployed workers who have a history of employment. Within a broad Federal framework, each State designs its own benefit program and imposes taxes on employers to pay for regular unemployment benefits. A Federal tax also is imposed on employers to fund the Federal responsibilities under the system, including certain administrative expenses, loans to States, and the Federal half of extended unemployment benefit costs for certain workers. Taxes collected are kept in Federal unemployment compensation trust fund accounts that are part of the unified Federal budget. Since the 1950s, "surplus" Federal balances have transferred to State accounts (called "Reed Act transfers"). In recent years, a provision in the 1997 Balanced Budget Act (P.L. 105-33) retained most surpluses in Federal accounts in an effort to reduce Federal deficits. While this provision expires at the end of fiscal year 2002, the House has passed three "economic stimulus" bills in recent months to accelerate the transfer of at least $8 billion in Federal surpluses to States to assist in their administration of unemployment benefits and reemployment efforts.

In addition to accelerating the transfer of surplus Federal funds and temporarily extending unemployment benefits by up to 13 weeks in every State, President Bush's fiscal year 2003 budget proposes additional reforms of the administrative financing of the UC and Employment Service programs. The Administration's proposal would gradually reduce the current Federal Unemployment Tax Act payroll tax, while also lowering Federal transfers to States for the administrative costs of their unemployment insurance systems. Federal funds available for loans and extended benefits and remaining Federal administrative responsibilities are projected to continue to rise under the proposal. As under current law, States would have authority to raise taxes to provide for targeted administrative funding needs.

In announcing the hearing, Chairman Herger stated: "The unemployment compensation program provides much-needed relief to millions of hardworking Americans, especially in tough economic times. The Administration has built on proposals developed in recent years to improve the administrative financing of these programs so States can do a better job getting unemployed workers back to work. I am excited to have the Administration come and explain the benefits of their proposal for employees, employers, and the economy."

FOCUS OF THE HEARING:

The hearing will focus on proposals in the President's fiscal year 2003 budget to reform the administrative financing of the nation's Unemployment Compensation and Employment Security programs.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note: Due to the change in House mail policy, any person or organization wishing to submit a written statement for the printed record of the hearing should send it electronically to hearingclerks.waysandmeans@mail.house.gov, along with a fax copy to (202) 225-2610, by the close of business, Tuesday, March 19, 2002. Those filing written statements who wish to have their statements distributed to the press and interested public at the hearing should deliver 200 copies to the Subcommittee on Human Resources in room B-317 Rayburn House Office Building, in an open and searchable package 48 hours before the hearing. The U.S. Capitol Police will refuse sealed-packaged deliveries to all House Office buildings.

FORMATTING REQUIREMENTS:

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. Due to the change in House mail policy, all statements and any accompanying exhibits for printing must be submitted electronically to hearingclerks.waysandmeans@mail.house.gov, along with a fax copy to (202) 225-2610, in Word Perfect or MS Word format and MUST 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. Any statements must include a list of all clients, persons, or organizations on whose behalf the witness appears. A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers of each witness.

Note: All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

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.