On Thursday, June 3 the House voted to approve HR 444, also known as the Back to Work Incentive Act of 2004, by a narrow margin of 213-203. The bill would establish Personal Reemployment Accounts (PRA) of up to $3000, available to workers after they have been unemployed for more than 26 weeks and exhausted their state unemployment insurance. The PRA would act as a fund by which an unemployed worker could purchase a variety of services, including skill assessment, counseling and career planning, on-the-job training, skills upgrading, and also support services such as child care and transportation. If enacted, the pilot program would be funded up to $50 million with funds taken from the Workforce Investment Act.
Any remaining funds in a PRA would be awarded as a reemployment bonus once the worker has a new job. The reemployment bonus would be paid to the worker in two installments, with 60 percent being available at the time of landing the new job, and the remaining 40 percent offered after keeping the job for 6 months.

Democrats and labor unions criticized HR 444, saying the problem is not unemployed worker’s lack of incentives to find work, but a lack of available jobs. Senator Edward Kennedy (D-MA) called the bill “another flawed attempt to deal with the serious economic problems facing millions of Americans in communities across the country.” The bill’s sponsors trumpet the program as creating incentive and providing the tools for unemployed workers to get back to work quickly.

Analysis conducted by Amy Chasanov of the Economic Policy Institute and Rick McHugh of the National Unemployment Law Project found that only 15,000 jobless workers would be eligible to participate in the program. In addition, participation in the program would require job seekers to pay for WIA services that are normally free.

Democrats in the House, led by Dale Kildee (D-MI), had attempted to force addition of supplemental unemployment benefits to the bill, but were defeated by a vote of 199-216.

There is no companion bill in the Senate and it is unlikely that the legislation will be considered in that chamber. Senate Democrats are intent on reviving a long-standing proposal to renew the supplemental federal unemployment insurance that expired at the end of 2003.

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