CHN: Congress Looking to Change Unemployment Insurance; House to Consider So-Called “Jobs, Opportunity, Benefits, and Services Act of 2011”

The House Committee on Ways and Means voted along party lines on May 11th, 2011 to dismantle the federal unemployment insurance program (UI). Although the bill was expected to come before the House Rules Committee on May 25th in order to set the terms for floor debate during the first week in June, it was pulled at the last minute. As reported in Politico, House Majority Whip Kevin McCarthy (R-CA) said the bill was postponed because of an “education” issue within the Republican caucus.  It was not clear whether Members did not understand the legislation or did not wish to vote for a bill that could potentially end unemployment benefits for 4 million workers and their families, especially since that bill would not be expected to be approved in the Senate.
The bill, proposed by Ways and Means Chair Dave Camp (R-MI) in the House and introduced in the Senate by Senator Orrin Hatch (R-UT), ranking Republican on the Senate Finance Committee, would allow states to divert  nearly $31 billion which by law now must be used for unemployment benefits  to other uses.  The Jobs, Opportunity, Benefits and Services Act of 2011 (H.R. 1745) would essentially put an end to the federal guarantee for extended UI benefits by allowing states to cut back on federal benefits for the long-term unemployed.  The funds could instead replace state dollars to pay for the first 26 weeks of UI benefits.  States could also use their share to replenish depleted state UI trust funds or to repay federal loans that covered state benefit costs.  The bill in effect would allow states to avoid raising UI taxes on employers.  Critics have pointed out that repeated UI tax cuts to employers during boom times left states with insufficient reserves in their trust funds to pay for state benefits when the recession hit.  In addition, the bill mandates training and education for recipients who have not finished high school.  While access to education would be positive, the requirement would likely be used as a way to deny benefits to workers who do not want to go back to school, or who cannot because budget cuts are expected to reduce training opportunities.

At the end of 2010 Congress brokered a deal that extended federal UI benefits for the long-term unemployed for a year in exchange for two more years of tax cuts to the wealthiest two percent of Americans. H.R. 1745 essentially reneges on that deal by changing the structure of unemployment insurance. The tax cuts for the rich would continue.

Advocates do not assume H.R. 1745 is dead, but it is not known when it will return to the calendar.

Labor and Employment
unemployment insurance