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Chairman Buchanan Opening Statement at Hearing on Unemployment Insurance: An Overview of the Challenges and Strengths of Today’s System

September 07, 2016

WASHINGTON, D.C. – House Human Resources Subcommittee Chairman Vern Buchanan (R-FL) today delivered the following opening statement at a Subcommittee hearing entitled “Unemployment Insurance: An Overview of the Challenges and Strengths of Today’s System.”

Remarks as prepared for delivery:

“Good morning and welcome to today’s hearing reviewing the challenges and strengths in our federal-state Unemployment Insurance system. The purpose of this hearing is to highlight efforts being undertaken by those on the ground to address program integrity, trust fund solvency, and successful reemployment strategies.

“Helping the unemployed return to work as quickly as possible and preventing improper payments within the system will better serve employers who fund the system to keep taxes low, as well as workers who claim benefits by getting them back to work sooner.

“In 2015, more than $46 billion was levied from employers annually through state and federal taxes to pay for benefits and program administration. Out of that, $32 billion in benefits were paid to six and half million beneficiaries.

“States are eager to do more to help the unemployed return to work quickly for the sake of workers and job creators. I’m excited to hear from two states in particular, Utah and my home state of Florida, who are rethinking the old unemployment office and transforming UI into a reemployment system.

“Florida has combined a number of agencies at the state level to create the Department of Economic Opportunity to provide its citizens with a more streamlined approach to services and even rebranded their UI benefits to be reemployment assistance. I’m looking forward to hearing more from the Department’s executive director Cissy Proctor about some of the innovative steps the state has taken. 

“As a business owner myself, I know firsthand how important it is for a state’s fiscal house to remain in order and the consequences of rising taxes on a company’s bottom. 

“I’m particularly pleased to have Mr. Walter Carpenter, a small business owner from the Orlando area, who will provide Members with a firsthand account of how policies thought up in Washington truly impact a firm’s ability to hire new employees and grow a regional economy.

“Finally, this hearing will also discuss the importance of properly targeting UI benefits to ensure they are going to the right person at the right time. In Fiscal Year 2015 alone, states improperly paid $3.5 billion in UI benefits, or one out of every ten dollars sent out from the UI system.

“The Office of Management and Budget continues to designate the UI program on their annual list of high error programs – and yet, no real progress has been made to improve this percentage. Too many state UI agencies rely on discovering and then trying to recover improper UI payments after they occur. This “pay and chase” approach is costly, time consuming, and wasteful. It also means that only a fraction of improper payments are ever recovered. Since state UI benefits are supported by payroll taxes on jobs, this misspending leads to higher taxes on jobs, reducing the very job creation the unemployed need most.

“I welcome all of our witnesses and look forward today’s discussion.”