Dear Mrs. Savattere: Thank you for contacting me about unemployment benefits. I appreciate your concern about this vital program, and I welcome the opportunity to correspond with you. As you know, unemployment benefits are provided to workers who have lost their jobs through no fault of their own. Laid-off workers who have been employed a requisite number of months and who are actively seeking a new job receive a portion of their prior wages each week. Unemployment compensation is an essential safety net, allowing workers some peace of mind while they seek a new position. In addition, unemployment compensation has important economic benefits during a downturn. Because the recently unemployed are likely to spend their benefits immediately, to cover basic costs of living, unemployment compensation pumps money directly into the economy, increasing demand and speeding recovery. In the US, unemployment compensation programs are run by the various states; in Rhode Island, the Department of Labor and Training administers our program. However, the federal government also plays an important role in facilitating these state initiatives. The Federal Unemployment Tax Act (FUTA) tax, levied on the first $7000 of a workers pay, is used to support administrative costs at both the state and federal levels. This incentive is enhanced by the fact that businesses in states with their own unemployment compensation programs receive a credit worth 90 percent of the FUTA tax. As a result of this federal encouragement, every state in the nation has an unemployment compensation program that provides at least a minimum level of support for workers. Most unemployment benefits end after 26 weeks. In times of economic prosperity, this policy successfully combats freeloaders seeking to take advantage of the system while allowing the unemployed ample time to find a new position. However, in times of economic hardship, when job openings are few and far between, half a year is often insufficient time to find new employment. The Extended Benefits (EB) program, funded with a mix of FUTA and state dollars, addresses this problem for short term spikes in the unemployment rate in a particular region, providing up to twenty weeks of additional benefits. In the face of a more sustained economic downturn, when millions are out of work for more than a year at a time, it is up to Congress to provide further relief. In the early days of the Great Recession, Congress did just that, passing the Emergency Unemployment Compensation Act of 2008 (EUC08). EUC08 created five tiers of emergency benefits for the unemployed. Tier I provided an additional 14 weeks of compensation for all states; each successive tier was open only to states with unemployment rates above a certain number. All told, an unemployed individual in a high unemployment state could get 53 weeks of additional benefits (all paid for by the federal government) thanks to EUC08. EUC08 also relaxed lending rates and requirements for states borrowing money to pay their portion of regular unemployment benefits and allowed the federal government to pay the state portion of EB. As the US continued to struggle with persistently high unemployment rates, particularly among the long-term unemployed, Congress extended EUC08 six times. The latest reauthorization lapsed on December 28, 2013. I strongly support extending EUC08 immediately to help Rhode Islanders and people around the country out of a job and looking for work. Because the permanent EB program was not designed to handle long economic downturns, most people are now left with only 26 weeks of benefits. This is especially worrisome in Rhode Island, where we continue to battle an unemployment rate that is one of the highest in the nation. I have steadfastly stood by my colleague Senator Reed as he tried to pass a short-term extension in the Senate. After repeated filibusters by Senate Republicans, the Senate finally voted on the fully paid-for extension authored by Senator Reed; the bill passed 59-38 on April 7. The bill would retroactively extend benefits from December 28, 2013 through May 30, 2014. Unfortunately, House leadership has made no effort to take up this important legislation. I am a cosponsor of H.R. 4415, the Emergency Unemployment Compensation Extension Act, a bill that is identical to Senator Reeds. However, despite repeated entreaties to Speaker Boehner and his deputies, House Republicans continue to refuse to bring the measure to the floor for a simple up or down vote. Every week, I hear stories from my constituents about how the loss of unemployment benefits is negatively affecting their lives and their communities. Their stories – of foreclosure, of unpaid medical bills, of not being able to finish the class at CCRI they need to find a new job – are heart-wrenching. And the thought that their appeals are falling upon deaf ears in House Leadership is appalling. Please know that I will continue to fight to ensure that our safety net is not weakened during the aftermath of one of the greatest economic calamities in our nations history. I also encourage you to contact my district office, at (401) 732-9400, if you or someone you know needs help in the wake of the expiration of EUC08. Thank you again for contacting me. Sincerely, Jim Langevin Member of Congress *** If you would like to sign up for my e-newsletter, please click here. For more information about my work in Congress, please visit my website.
Posted on: Sun, 06 Jul 2014 06:53:22 +0000
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