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Davis Opening Statement: Hearing on Moving from Unemployment Checks to Paychecks: Assessing the President’s Proposals to Help the Long-Term Unemployed

October 06, 2011

Today’s hearing is on the President’s proposals to help the long-term unemployed get back to work, which are part of his latest jobs plan.  

There is certainly bipartisan agreement on that goal. But we need to do a better job helping all the unemployed return to work, because today’s short-term unemployed workers risk becoming tomorrow’s long-term unemployed.  

For example, one of America’s 14 million unemployed workers, Ms. Dawn Deane, will testify shortly about her experience since being laid off in June.  She is not “long-term unemployed.”  But why should we wait until she reaches that stage before she gets effective help in getting back to work?  Yet that is largely what the President’s latest plan proposes, starting with its call to extend unemployment benefits for up to 99 weeks for another year.  

That has a familiar ring because this would be the 10th extension since mid-2008.  That’s left a long track record for assessing whether extending unemployment benefits will create jobs, as some have claimed.  For instance, then-Speaker Nancy Pelosi last year said extending unemployment benefits “is one of the biggest stimuluses to our economy….It creates jobs faster than almost any other initiative that you can name.”

But in reality, since Federal extended benefits began, the unemployment rate rose from 5.6 to 9.1 percent and over 6 million jobs disappeared.  Federal benefits have already added $180 billion to the deficit, and today we are being asked by the President to spend another $50 billion next year.  

Other proposals in this plan have a familiar ring, too.  

For example, like provisions in Democrats’ 2009 stimulus law, the President’s latest plan proposes more temporary Federal funds if States adopt UI policies dozens of States already support.  If these programs have merit, and many States already use them, why must the Federal government again spend billions of dollars for other States to adopt them, too?  

There is no free lunch here.  The Administration has proposed new taxes on job creators to “pay for” this new spending, but Senate Democrats have already rejected some of those.  Meanwhile, the Administration’s budget, which was unanimously rejected in the other body, called for nearly $60 billion in permanently higher unemployment taxes on jobs in the coming decade.  It is hard to see how permanently higher taxes on jobs will help the unemployed get back to work.

The President’s plan is noteworthy for steps it does not take, such as providing States more flexibility over UI funds so fewer people become long-term unemployed.  This Committee approved such UI waiver authority earlier this year.  Just last week President Obama signed into law a bill — cosponsored by my friend Mr. Doggett, among others – to provide States waiver authority in child welfare programs.  If States can be trusted to design better programs for children at risk of abuse and neglect, can’t they be trusted to test ways to better help the unemployed get back to work — using their own State funds?

Other important reforms are missing, too, like strengthening work search and better engaging unemployed workers in training — reforms that were needed even before the recession.

The good news is these sorts of improvements to help all unemployed workers can and should be included in any legislation enacted this year to help the unemployed return to work.  I look forward to working with my colleagues and the Administration to that end, and welcome all of our witnesses today to discuss how we can craft the most effective policies to do just that.