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66–995—PDF 2010

S. HRG. 111–1010 

USING UNEMPLOYMENT INSURANCE TO HELP 

AMERICANS GET BACK TO WORK: CREATING 

OPPORTUNITIES AND OVERCOMING CHALLENGES 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

APRIL 14, 2010 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RUSSELL SULLIVAN, Staff Director 

KOLAN DAVIS, Republican Staff Director and Chief Counsel 

(II) 

C O N T E N T S 

OPENING STATEMENT 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

on Finance ............................................................................................................ 1 

WITNESSES 

Oates, Jane, M.Ed., Assistant Secretary for Employment and Training, Department of Labor, Washington, DC .................................................................. 3 

Holmes, Doug, JD, president, UWC—Strategic Services on Unemployment 

and Workers Compensation, and the National Foundation for Unemployment Compensation and Workers Compensation, Washington, DC ................ 6 

Lee, Karen, JD, president, National Association of State Workforce Agencies 

(NASWA) and Commissioner, Washington State Employment and Security 

Department, Olympia, WA .................................................................................. 8 

Zandi, Mark, Ph.D., chief economist and co-founder, Moody’s Analytics, West 

Chester, PA ........................................................................................................... 9 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 31 

Enzi, Hon. Michael B.: 

Prepared statement .......................................................................................... 33 

Grassley, Hon. Chuck: 

Prepared statement .......................................................................................... 34 

Holmes, Doug, JD: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 35 

Lee, Karen, JD: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 50 

Oates, Jane, M.Ed.: 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 64 

Zandi, Mark, Ph.D.: 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 74 

COMMUNICATIONS

Alice, Peter J. ........................................................................................................... 83 

National Treasury Employees Union (NTEU) ...................................................... 85 

(III) 

(1) 

USING UNEMPLOYMENT INSURANCE TO 

HELP AMERICANS GET BACK TO WORK: 

CREATING OPPORTUNITIES AND 

OVERCOMING CHALLENGES 

WEDNESDAY, APRIL 14, 2010 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 10:05 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senators Bingaman, Wyden, Stabenow, Menendez, Carper, Grassley, and Snowe. 

Also present: Democratic Staff: Bill Dauster, Deputy Staff Director and General Counsel; and Diedra Henry-Spires, Professional 

Staff. Republican Staff: Steve Robinson, Chief Social Security Advisor. 

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR 

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The committee will come to order. 

President John F. Kennedy said, ‘‘Anyone who is honestly seeking a job and can’t find it deserves the attention of the U.S. Government and the people.’’ 

Today we turn our attention to the Unemployment Insurance 

system. We will look at whether it can do even more to help those 

seeking a job. Last month’s job report brought us a glimpse of hope. 

The economy created 162,000 jobs. But 15 million Americans are 

still unemployed. 

America has 8.2 million fewer jobs today than it did when the 

recession began in December of 2007, and more than 44 percent of 

the unemployed have been searching for a job for at least 6 

months. That is 6.5 million Americans without a job for 6 months 

or more. On average, it is taking 31 weeks to find a new job. 

For millions, the Unemployment Insurance system provides a 

vital safety net. More than 11 million out-of-work Americans are 

relying on unemployment benefits. Unemployment benefits are providing vital services. I often hear from Montanans that these 

checks keep them able to put food on the table. I hear that, without 

this help, they would not have paid their rent or mortgage. 

In Montana, one of my neighbors, a woman from Great Falls in 

her 70s, was unemployed. She was in the process of being evicted 

from her apartment. She applied for, and began receiving, emerVerDate Nov 24 2008 16:59 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 R:\DOCS\66995.000 TIMD
2 

gency unemployment compensation benefits. These benefit payments allowed her to stay in her home and keep food on her table. 

Those benefits were a lifesaver for her. 

Because folks are staying unemployed so long, people are exhausting available State benefits. In many cases, they have exhausted the additional tiers of Federal emergency benefits. The Department of Labor reports that, as of mid-March, almost 6 million 

Americans had exhausted their State benefits and were claiming 

Federal emergency benefits. 

Our unemployment system deserves attention. It also deserves 

innovation. Many States are doing something creative. Seventeen 

States have implemented a work sharing program. Under these 

programs, to avoid layoffs, States allow employers to trim the 

hours for which they pay and then use Unemployment Insurance 

funds to maintain the full-time job. 

My State of Montana has its own version, New York State’s 

Shared Work program uses such a policy to avoid job loss, and as 

we will hear today, Washington State has an innovative program 

as well. 

Encouraging entrepreneurship is also an option. New Jersey’s 

Self-Employment Assistance Program assists qualified unemployed 

people to become self-employed and start a business in New Jersey. 

New Jersey’s program gives participants weekly Self-Employment 

Assistance compensation instead of unemployment benefits. The 

State also gives them business start-up training and counseling. 

Some States create new jobs through subsidy programs. Texas, 

for instance, has designed a subsidized jobs program that will target opportunities to low-wage workers who have exhausted Unemployment Insurance benefits or are at risk for exhausting. Montana 

also has a subsidized jobs program. We need to consider new ways 

to target job subsidies more effectively to those who have been laid 

off and exhausted all of their State-provided employment benefits. 

And there is another problem that deserves attention. Right now, 

if you have been laid off and you take a part-time job, the current 

system penalizes you for that decision. We should reverse that incentive. 

As people are hurting, so are State employment trust funds. 

States right now have borrowed more than $40 billion from Uncle 

Sam, and I look forward to hearing about how the unemployment 

system can accommodate new ideas while improving the system’s 

solvency. 

Currently, the Federal Government provides interest-free loans 

to States that borrow to pay Unemployment Insurance benefits. 

This makes sense during a recession so that businesses do not face 

an increased tax burden at a time when we need them to hire. 

We also need to continue the TANF Emergency Contingency 

Fund. The TANF Emergency Contingency Fund is a resource for 

States for jobs subsidy programs. This fund has been a big help in 

increasing the creation of subsidized jobs for low-income workers. 

Senators Kerry and Murray have worked very hard to continue 

this fund. 

When I hear from unemployed people, what they really want 

more than the unemployment check is to be back at work, and that 

is the focus of today’s hearing. President Kennedy said that those 

3 

seeking work need our attention. Let us see how that attention can 

be new, innovative, and common-sense. Let us take a focused look 

at how our Unemployment Insurance system can provide more 

than safety net support, and let us focus on how our unemployment 

system can best save jobs and create new jobs right away. 

I would now like to welcome our witnesses. First, we will hear 

from Jane Oates, Assistant Secretary for Employment and Training with the U.S. Department of Labor. Welcome, Ms. Oates. 

The second witness is Doug Holmes. Doug is the president of 

Strategic Services on Unemployment and Workers Compensation. 

Thank you, Doug, for being here. 

The third witness is Karen Lee. Karen Lee is president of the 

National Association of State Workforce Agencies and Commissioner at the Washington State Employment and Security Department. Welcome, Karen. 

Finally, we will hear from Dr. Mark Zandi, chief economist with 

Moody’s Analytics. You have been here quite often, Mark. Thanks 

very much. 

As a reminder, all written statements will be automatically included in the record. Please limit your oral presentations to about 

5 minutes. 

Thanks, all of you, again, for taking the time. I just urge you, 

do not pull any punches. Tell it like it is. Say what is on your 

mind. Let us make the most of this. All right. 

STATEMENT OF JANE OATES, M.Ed., ASSISTANT SECRETARY 

FOR EMPLOYMENT AND TRAINING, DEPARTMENT OF 

LABOR, WASHINGTON, DC 

Ms. OATES. Chairman Baucus, thank you so much for this opportunity. Good morning to you, to Senator Bingaman, to Senator 

Stabenow. It is wonderful to see you again. I look forward to talking with you about ways that we can improve UI. 

The UI program has never been more important than it is today 

as a safety net for unemployed workers and their families and as 

an economic stabilizer during these challenging times. Not only has 

it provided a desperately needed lifeline as unemployed workers 

search for new jobs, the Congressional Budget Office indicates that 

UI benefits are one of the two most cost-effective ways to stimulate 

job growth. 

The President’s Council of Economic Advisors estimates that for 

every dollar spent on unemployment benefits, $1.60 is returned to 

local communities. The President is committed to actively promoting job creation. The President’s budget included $100 billion in 

job creation money, including investments in small businesses, infrastructure, and green jobs. 

I thank the members of this committee for their work on the Hiring Incentives to Restore Employment, or HIRE Act, which provides incentives to employers to hire and retain unemployed workers. As all of you know too well, over $223.3 billion in UI benefits 

have been provided to over 30.6 million unemployed workers since 

the recession began in December of 2007. Unfortunately, the Nation’s unemployment rate still remains persistently high at 9.7 percent. 

4 

The additional weeks of benefits made available through the 

Emergency Unemployment Compensation and Extended Benefits 

programs have been critical for millions of jobless workers and 

their families. The administration supports a long-term extension 

of these programs through the end of the year. 

A top priority for this administration is to ensure the continued 

strength and viability of the UI program, which has been strained 

by the recent recession. States have done an extraordinary job in 

rising to the challenges of a greatly increased workload and a short 

timeframe to implement the EUC program. 

In looking to the future of the UI program, we must not underestimate the challenges ahead. It will be important to build on its 

strengths and to modernize and improve those areas that have not 

functioned as well. 

Today I would like to focus on a few key areas that are also in 

my written testimony in greater detail. I look forward to ongoing 

discussion with this committee on other potential reforms to this 

important program. 

First, I want to mention the implementation anomaly related to 

the EUC program, the effect of part-time or temporary employment 

on benefit levels. Mr. Chairman, you mentioned this in your opening remarks. A basic premise of the EUC program is that the worker has no eligibility for State unemployment benefits. 

State claims are paid with respect to a 12-month period called 

a benefit year. When EUC claimants reach the end of their State 

benefit year, States must check to see if the claimants can reestablish State eligibility. Some workers, including those who worked 

part-time or found temporary jobs, once again become entitled to 

regular State benefits because they were employed. 

However, their weekly benefit amount is significantly reduced 

because their part-time earnings are lower than the earnings used 

to establish the original claim. Affected workers consider this to be 

unfair, and we agree that the anomaly poses an equity issue. As 

proposals to address this situation are considered, we strongly recommend that State implementation concerns be taken into account 

in addressing this matter, given the huge administrative burden 

States already face during the recession. 

A second area concerns short-time compensation, also known as 

work sharing. Again, Mr. Chairman, you mentioned this. This allows an employer to reduce the weekly hours of work for all, or a 

group of its workers rather than temporarily laying off some workers. Clearly, this works best when labor and management are 

working together to create these programs. 

Seventeen States currently operate short-time compensation. 

Workers receive a prorated portion of their weekly benefit amount 

based on the percent by which their work week is reduced. Instead 

of facing a layoff, workers not only retain their jobs but they also 

avoid facing a period of total unemployment that may cause their 

skills to grow stale. Employers are spared the need to lay off workers, and they are able to retain the skill and talent of those workers on their site. 

Unfortunately, our department has been limited in its ability to 

promote this short-time compensation due to a need for a technical 

fix in the Federal law. Language accomplishing this fix is contained 

5 

in our Unemployment Compensation Integrity Act, which we hope 

to share with the committee shortly. By the way, Senator Reed also 

had that in his legislation. 

We are aware that there may be interest in discussing whether 

incentives should be given to States to participate in this program, 

and we are willing and looking forward to working with you on 

that. 

A third area concerns the Self-Employment Assistance program, 

which is designed to help those unemployed workers who are able 

to create their own jobs by starting a small business. Under SEA, 

States may pay a self-employment allowance equivalent to the 

weekly unemployment benefit to eligible jobless workers while they 

are establishing businesses and becoming self-employed. Eight 

States currently operate this program, and four more are looking 

into beginning operation. 

A fourth area, one that is a very high priority for my agency, is 

reemployment strategies for UI claimants. Clearly, the best remedy 

for unemployment is reemployment. To that end, the Department 

is focusing its attention and resources on better integrating and 

connecting UI claimants with the services delivered through the 

One-Stop public workforce system. The Recovery Act provided $250 million in additional resources 

to the workforce investment system to support services to claimants to get them back into the job market as quickly as possible. 

These much-needed resources have been critical to building the capacity of the workforce system to serve the significantly increased 

number of UI claimants needing those services. 

The Reemployment and Eligibility Assessment initiative has 

been one of ETA’s core strategies to improve reemployment outcomes for UI claimants and also to reduce improper payments. In 

a time when most UI claims are taken remotely, REA gets claimants into One-Stop Career Centers to develop a reemployment plan 

and to access One-Stop services. 

Thirty-four States are currently operating REA initiatives. A 

total of $60 million has been appropriated for REAs in fiscal year 

2010, and we anticipate that additional States will implement REA 

initiatives this year. These funds have strengthened the partnership between State UI programs and the One-Stops, transforming 

the way that States serve their UI claimants. 

During the course of this recession, training as a reemployment 

strategy has taken on new importance. While the economy recovers, the workforce system has used the Workforce Investment Act 

funds to upgrade worker skills to better position workers to access 

jobs in demand and to provide employers with the skilled workers 

that they need. 

The Department has worked collaboratively with States to promote innovative uses of those WIA funds, such as increasing the 

use of on-the-job training contracts with employers. The Department this week announced the availability of up to $90 million in 

Recovery Act funds for States and their partners to create on-thejob training experiences through our National Emergency Grants 

funds through the Recovery Act. 

We have also requested an additional $500 million for on-the-job 

training to encourage employers to hire more unemployed workers. 

6 

In addition, as part of a presidential initiative, we have collaborated with the Department of Education and the States to help UI 

claimants gain access to Pell grants to further their education. 

The CHAIRMAN. I am going to have to ask you to wrap up your 

testimony, Ms. Oates. 

Ms. OATES. I will stop, Mr. Chairman, right there, and look forward to your questions. 

The CHAIRMAN. Thank you very, very much. 

Ms. OATES. Thank you. 

[The prepared statement of Ms. Oates appears in the appendix.] 

The CHAIRMAN. Mr. Holmes? 

STATEMENT OF DOUG HOLMES, JD, PRESIDENT, UWC— 

STRATEGIC SERVICES ON UNEMPLOYMENT AND WORKERS 

COMPENSATION, AND THE NATIONAL FOUNDATION FOR UNEMPLOYMENT COMPENSATION AND WORKERS COMPENSATION, WASHINGTON, DC 

Mr. HOLMES. Thank you, Mr. Chairman, members of the committee. My name is Doug Holmes, president of UWC. I am going 

to address a number of items related to the topic this morning. 

Thank you for the opportunity to testify. 

The first step in getting unemployed workers back to work must 

be the creation of jobs, and the creation of jobs is impaired when 

payroll taxes are increased. According to the U.S. Department of 

Labor’s projections for the President’s fiscal year 2011 budget, very 

large amounts of borrowing from the Federal unemployment account are projected over the next few years. 

The balance of outstanding loans is projected to increase from $17.4 billion at the end of fiscal year 2009 to a peak end-of-year 

balance of $93 billion in fiscal year 2013. A total of up to 40 States 

are projected to borrow. 

UI trust fund accounts have been overwhelmed with increases in 

benefit payments, and employers are beginning to feel the shock of 

increases in State unemployment taxes. In this environment, employers are reticent to create new jobs or rehire employees because 

of the uncertainty and size of payroll tax burdens. 

An analysis of the Bureau of Labor Statistics’s Business Employment Dynamics and Job Openings and Labor Turnover Survey that 

was performed by Jim Shirk for The Heritage Foundation shows 

that the primary reason for the continuing high unemployment 

rate is that job creation continues to fall, while the labor force is 

growing, resulting in higher unemployment rates. 

It is the lack of job creation more than the loss of employment 

that needs to be addressed at this juncture. An immediate positive 

step would be to provide relief from the Federal Unemployment 

Tax Act tax penalties that are on the horizon in 2011. 

There are record numbers of long-term unemployed, many of 

whom are being paid EUC and Federal Additional Compensation. 

As of the most recent report from U.S. DOL, approximately 5.6 million are actually being paid EUC and FAC. The EUC, FAC, and the 

100-percent reimbursement of State benefit payments for regular 

Federal extended benefits provided in the Recovery Act have served 

to provide needed support for unemployed workers who became unemployed due to the recession. 

7 

They have also, however, contributed to increased duration of 

State Unemployment Compensation payments, higher unemployment rates, and restrictions on measures to address State and Federal unemployment trust fund solvency. 

A comparison of the average duration of weeks of State Unemployment Compensation from the fourth quarter of 2008 to the 

fourth quarter of 2009 shows a dramatic increase in average duration nationally, from 14.9 weeks of benefits to 18.8 weeks of benefits. 

According to a report prepared for the Brookings Panel on Economic Activity last month, a 53-week extension, such as has been 

provided in the EUC, would be associated with a 4.2- to 10.6-week 

increase in unemployment duration among UI recipients. 

The sheer size of the group of long-term unemployed requires an 

approach which combines public workforce services, private job 

search, reemployment and training services, and commitment on 

the part of unemployed workers to actively seek and accept work 

that is available in the marketplace. 

The public workforce system does not have, frankly, the capacity 

to serve these 5.6 or more million long-term unemployed workers 

by itself, and frankly should not be expected to solve these problems by itself. 

Employer-based programs such as customized training, on-thejob training, programs such as Georgia Works that permit individuals to work as employees or trainees in anticipation of long-term 

employment, are the most effective in moving unemployed workers 

into training which is likely to lead to sustainable employment. 

One of the most effective ways to get unemployed workers back 

to work is for unemployed workers to take responsibility and to be 

motivated to take jobs that are available. In developing plans to assist unemployed workers in returning to work, the employment security system should be used in conjunction with workforce programs dedicated to provide job search, reemployment, and training 

services that may be funded from sources other than the insolvent 

unemployment trust fund accounts, but that are aligned to provide 

economic security and effective workforce services to the benefit of 

the individual employers and economic recovery. 

In conclusion, the status of the slowly recovering economy dictates that, although the State and Federal trust funds are insolvent, we must do no harm to discourage job creation and economic 

recovery. The Federal penalties that would otherwise be imposed in 

the form of title XII loan interest beginning in 2011 and the FUTA 

offset credit penalty, which is already impacting employers, should 

be waived for 2 years to avoid dampening the creation of jobs and 

the economic recovery. 

States should be properly funded to work with unemployed workers and employers to provide services designed to return unemployed claimants back to work. Training should be closely coordinated with employers in developing customized training, OJTs, internships, and other employer-based training. 

The impact of the Recovery Act related to Unemployment Insurance should be evaluated to determine if modifications may be 

needed to promote job creation and reduce the duration of unemployment compensation. Also, the effect of the FAC on the ability 

8 

of States to address State UI trust fund solvency should be reviewed. 

Thank you very much, Mr. Chairman. I look forward to any 

questions you may have. 

The CHAIRMAN. Thank you, Mr. Holmes. 

[The prepared statement of Mr. Holmes appears in the appendix.] 

The CHAIRMAN. Ms. Lee, you are next. 

STATEMENT OF KAREN LEE, JD, PRESIDENT, NATIONAL ASSOCIATION OF STATE WORKFORCE AGENCIES (NASWA) AND 

COMMISSIONER, WASHINGTON STATE EMPLOYMENT AND 

SECURITY DEPARTMENT, OLYMPIA, WA 

Ms. LEE. Thank you, Chairman Baucus and members of the committee. My name is Karen Lee, and I am the Commissioner of the 

Washington State Employment Security Department. Today I am 

testifying in my role as president of the National Association of 

State Workforce Agencies, known as NASWA. 

Years ago, after I graduated from the U.S. Military Academy at 

West Point, I had the honor of serving my country in the Army. 

Today it is my honor once again to serve my country and my State 

by helping workers and businesses weather this great recession. 

Last year, some 37 million job seekers sought assistance from 

State workforce agencies, a 40-percent increase from the year before. Some lost jobs they held for decades, and they need help planning a new future. Some are recent military members just discharged who need help translating their military skills into civilian 

work. Some customers have skill gaps or other barriers: people of 

color, the disabled, and the poor. Still others have great skills, but 

their confidence is shaken after months of not finding a job on their 

own. 

State workforce agencies are doing everything we can to help 

these individuals find work, but there are simply not enough jobs 

to go around right now. So thank goodness for the Emergency Unemployment Compensation program, EUC. These benefits have 

been a lifeline for millions of Americans until times get better, so 

it is critical that Congress act this week to extend this program 

through the end of the year. 

Month-to-month extensions are anguishing for the unemployed, 

and they place unnecessary strain on State workforce agencies. Although the economic signs are improving, many businesses are still 

experiencing layoffs. In my State, we have been able to avoid layoffs and preserve jobs through our State Shared Work program. 

Shared Work allows employers to reduce the hours of their fulltime employees, while the workers collect partial unemployment 

benefits to help replace their lost wages. 

The Shared Work program in Washington saved more than 

22,000 jobs last year, and we also avoided nearly $60 million in 

benefit payouts. That saves taxes for participating employers, and 

it also helps them by retaining their skilled workers so that, when 

the economy recovers, these businesses are poised to respond quickly. 

Currently, only 17 States have Work Share programs. It is time 

for Congress to clarify this law so that all States can take advanVerDate Nov 24 2008 16:59 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 R:\DOCS\66995.000 TIMD
9 

tage of this recession-fighting tool. As the economy recovers, we 

want to put unemployed people back to work as quickly as possible. 

That is our job. With Recovery Act funds, many workforce agencies 

have expanded their capacity to provide career guidance, job referrals, and training, but these funds will not be available after September. 

Last year in Washington State, we conducted a rigorous assessment of the effectiveness of our reemployment services, and these 

results showed unemployed workers who used our job services 

found jobs faster and made more money than those who did not. 

I urge Congress to expand funding for reemployment services in 

the next budget. 

Another program that is yielding tremendous results is the 

TANF Emergency Contingency Fund, and that creates subsidized 

jobs for low-income Americans. It is a unique approach that gives 

States great flexibility to design approaches that respond to their 

particular circumstances, and in fact this program is creating jobs 

at a lower cost than virtually any other measure Congress is considering. 

This program needs to be extended for an additional year beyond 

September 30. I also urge this committee to consider a similar job 

development fund for those on Unemployment Insurance. Lastly, 

the length and depth of this recession has forced 35 State unemployment funds into insolvency. So far, these States have borrowed 

nearly $40 billion to pay benefits. 

So how can we avoid this crisis in the future? Coming from a 

State that has not had to borrow this recession, I can tell you personally that it is not easy. It takes hard, courageous decisions by 

Governors and State legislators, with cooperation from both business and labor. 

This year, at least 10 States are working to create more stable 

systems for the future, but what about now? What about our current situation? With dozens of States facing tax increases to repay 

loans, NASWA asks this committee to extend the interest-free 

waiver on their loans for 2 additional years. 

At the same time, please do not forget the States that have had 

adequate reserves going into this recession. Therefore, States 

should be recognized, and we should all work together, to ensure 

State unemployment trust funds are adequately prepared to address both good times and bad times in the future. 

Thank you. I will be pleased to take any questions you may have. 

The CHAIRMAN. Thank you, Ms. Lee, very much. 

[The prepared statement of Ms. Lee appears in the appendix.] 

The CHAIRMAN. Dr. Zandi? 

STATEMENT OF MARK ZANDI, Ph.D., CHIEF ECONOMIST AND 

CO-FOUNDER, MOODY’S ANALYTICS, WEST CHESTER, PA 

Dr. ZANDI. Thank you, Mr. Chairman. Thank you, Senator 

Bingaman, Senator Stabenow, and Senator Carper. It is a pleasure 

to be here, an honor to be here. My comments are my own personal 

views and not those of the Moody’s Corporation. 

I will make four points in my remarks. First, the recession is 

over. An economic recovery has begun, but a self-sustaining economic expansion still remains elusive. That the recession is over is 

10 

clear from GDP—the value of all the things that we produce—it 

grew 4 percent annualized in the second half of last year and is on 

track to grow 3 percent in the just-ended first quarter. 

Job loss has stabilized. We have lost 8.4 million jobs from the 

peak, which was December of 2007 through February of 2010, and 

March was, as you pointed out, the first month of job growth and 

I think marks the beginning of consistent job growth going forward. 

Unfortunately, the job growth is still very modest. Underlying job 

growth, after subtracting from the Census hiring and the effects of 

the weather, is probably around 50,000 per month. That is not 

enough. It is certainly not enough to bring down unemployment. In 

fact, at 50,000 per month, we will probably see unemployment continue to increase. The national employment rate is 9.7 percent. I 

would not be surprised if it drifted back into double digits by the 

end of the year. 

The problem, as was pointed out earlier, is not layoffs at this 

point, it is lack of hiring. Businesses are not hiring. I will just give 

you another statistic. In a normal, well-functioning economy, we 

get between 5 and 5.5 million hires per month. Since the beginning 

of the year, we have been getting 4 million hires per month. That 

is a big difference. 

Two big problems. One is lack of credit for small business. I 

think that is now pretty clear. Small businesses are key to job creation, and, if they cannot get credit, they cannot expand. The second is confidence. Many businesses went through near-death experiences not too long ago and they are not going to forget it quickly, 

and they need more time to get over it. 

I think that policy uncertainty also has played a role. Not that 

these debates we are having are not very important, and we should 

have them—health care, energy, regulatory reform, tax policy, we 

need to do it—but while we are in the middle of it, it clearly does 

create uncertainty. 

So the expansion is not in full swing. We are not off and running, 

the coast is not clear. That is point number one. 

Point number two. I think, given point number one, policymakers 

need to remain aggressive in providing support to the economy, 

and they have done a good job. I think the Recovery Act that was 

passed last year was vital to ending the recession and bringing the 

start of recovery, and I think a number of things done recently 

have been very helpful, various extensions of Recovery Act provisions, the housing tax credit, and I think the recent passage of the 

jobs tax credit, will be helpful later this year. 

I think there are a few other things that need to be done: expanded SBA lending, going back to my point about small business 

lending; more money for State and local government because of 

their budget holes; and extending the TANF Emergency Fund. As 

has been pointed out, I think that would be a very easy thing to 

do and a very effective thing to do. 

Point number three. I think the UI system can be used more effectively to provide support to the economy in the very near term. 

Let me give you four things that I would do, many of which have 

already been suggested. First, extend emergency benefits through 

the end of the year. This month-to-month process is very debilitating to confidence, and consumer confidence is very, very low and 

11 

very fragile, and I think part of the reason is because of this uncertainty. I think it makes perfect sense to do it. It provides a very 

significant bang for the buck for the economy, $1.60 for every dollar 

spent on UI, by my estimates. That is the GDP increase 1 year 

after the provision of those Unemployment Insurance benefits, so 

it is very straightforward, I think, to do. 

Second, eliminate this disincentive for part-time work. That 

makes no sense to me. I think that is an easy fix and should be 

done. 

Third, more complicated, but I think something important and 

probably more important if the economy starts to backslide a bit 

and we get more layoffs, is Work Share. That is a very good idea, 

and we should incent that. 

Fourth, self-employment assistance. This has worked in a number of States and in different parts of the world, giving folks who 

have the ability to start their own companies the means to do that 

with Unemployment Insurance benefits. 

Finally, point number four. All this costs money. It is not cheap. 

You add it all up, we are talking $70, $75, $100 billion, depending 

on how high unemployment goes. It should be paid for. In an ideal 

world, I think we need to pay for it. Not now, not next year, but 

when the economy is in full swing, I think it is important to pay 

for it. 

The deficit, the debt loads, are our next economic challenge. It 

would be very helpful if we could at least send a signal to global 

investors that we are serious about it, because that would keep interest rates low, and obviously low interest rates are key to economic expansion. 

Now, having said that, the greatest near-term risk is not higher 

interest rates; the greatest near-term risk is that this expansion 

does not engage and we go back into a weak economy or back into 

recession, because it would be very difficult to get out of it. The 

economy needs immediate help. If push came to shove, I would say 

I would live with higher temporary deficit spending to make sure 

this economy is off and running, because at the end of the day that 

will save taxpayers money. 

Thank you. 

The CHAIRMAN. Thank you very much, Dr. Zandi. 

[The prepared statement of Dr. Zandi appears in the appendix.] 

The CHAIRMAN. Let me just take up that last question when you 

said the biggest near-term risk is that the economy does not engage. What are some of the criteria, or what are some of the indicators, or how do we know? I guess by that do you mean, if unemployment does not lower? 

Dr. ZANDI. Yes. The key statistic—— 

The CHAIRMAN. By definition, we still have not engaged? 

Dr. ZANDI. Yes. The key statistic is job creation. Suppose I am 

right and the underlying rate of job growth per month is 50,000. 

We need to see at least 100,000 to 125,000 per month consistently 

to stabilize unemployment, and then, to bring down unemployment 

in any substantive way, you need to get well above that. So until 

we are above that 100,000, 125,000 threshold, I would not conclude 

that we are off and running. 

12 

The CHAIRMAN. How much of the slowness in job creation and 

new jobs is due to increases in business productivity? That is, when 

times are down, the companies get more efficient, they get rid of 

excess cost and so forth, and so now they are not hiring as many, 

in part because their productivity is so much higher. 

Dr. ZANDI. That is true. I think we have seen this massive decline in employment, this 8.4 million jobs, which, by the way, understates the actual job loss because we will get revisions, and the 

revisions will show that we have lost probably closer to 9 million 

jobs when it is all said and done. 

That was the result of a level shift in productivity, that businesses, it appears, were able to stockpile various types of laborsaving processes and technologies that they did not take advantage 

of during the expansion because it is not easy to do. It is costly to 

lay off workers, and it is not something people want to do anyway. 

But in the middle of this recession, it was the only thing to do because it was a matter of survival. So, I think we have a whole level 

of shift-down related to this increase in productivity. 

Now, going forward, I do not think businesses are going to be 

able to maintain that kind of productivity growth. The productivity 

gains we have seen in the last 3 quarters are unprecedented. You 

have to go back—well, we have data all the way back to World War 

II—and we have never seen anything like it. 

So I do not think that will continue, so we will see job growth. 

But nonetheless, we now have this huge hole in the labor market 

9 million deep, and it is going to take a long time to fill that in. 

The CHAIRMAN. Could some of you talk about work sharing? You 

all seem to like it and think it is a good idea. It has been practiced 

in 17 States. Is there some indication that maybe if the Federal 

Government got involved that that might be a good idea, but there 

might be some wrinkles and some problems? Who wants to address 

how we get the Federal Government involved in helping States 

with Work Share? 

Mr. HOLMES. Thank you, Mr. Chairman. One of the questions for 

work sharing is assuring that employers are comfortable. This is a 

program where employers develop a plan that meets their individual needs, and obviously there are 17 States doing it now. Some 

of them are similar, but there are differences from State to State. 

So one of the things to be careful about, I think, from the Federal 

perspective is to make sure that, if there are Federal requirements, 

that you do not unintentionally impair what is already there and 

working in a number of the States. I think maybe the approach 

would be to do an analysis of what is working well State by State 

and try to make sure that employers have flexibility to use work 

sharing in the best way without having unnecessary strings attached to it. 

The CHAIRMAN. Well, I hope that the current legislation, that is, 

the temporary extension, passes. We probably will extend benefits 

until the end of May. But in the meantime, I am wondering if this 

is a good opportunity to start to change the legislation to adopt 

some of these suggestions that you have. We do have an opportunity here, about a month and a half to work on it. So, some 

thoughts some of you might have as to how to do that and how to 

best take advantage of this 11⁄2-month opportunity. 

13 

Ms. LEE. Senator Baucus, what States need is just clarity in the 

law so that the enabling legislation is very clear that it will not run 

afoul of any regulations. I know that the Department of Labor has 

language that they have submitted. It has also been submitted in 

bills earlier this session. So that is the biggest thing that we need 

for States, and many States are moving forward regardless. 

The CHAIRMAN. What are your concerns about clarity? What 

might we do that makes things too unclear? 

Ms. LEE. There is an unofficial Solicitor General opinion that is 

dated, that is interpreted as murky by some States, so States that 

have not implemented Shared Work programs are uncomfortable. 

The CHAIRMAN. It is a U.S. Solicitor opinion? 

Ms. LEE. Yes. Yes. 

The CHAIRMAN. Has somebody suggested how that could be made 

less murky? 

Ms. OATES. Yes, Senator. We have submitted language to the 

committee, Senator. Basically, it is just stating clearly that this is 

an allowable activity. 

The CHAIRMAN. All right. Good. 

Ms. OATES. And we will continue to work with you so it is acceptable to the members, but a number of States have approached the 

Department and asked about, could they do this without fear of repercussions, and many of them very timidly say they do not want 

to face an audit. 

The CHAIRMAN. All right. My time is up. 

Senator Bingaman, you are next. 

Senator BINGAMAN. Thank you very much. 

What occurs to me is that, wherever there is a Solicitor’s opinion, 

there can be a follow-on Solicitor’s opinion that clarifies the situation. I do not know if that is being considered in the Department 

of Labor. Rather than waiting till Congress can agree to make a 

change in law, it might be that you could solve this problem without Congress acting. I do not know. 

Ms. OATES. Our Solicitor is currently looking at it. As you know, 

Senator, our Solicitor did not get confirmed—she has only been on 

board for about 2 months. But it is something she started looking 

at right away. It is pretty clear that it is murky and needs a legislative fix at this point, but we are continuing to look at how we 

could change the Solicitor’s opinion. 

Senator BINGAMAN. Let me ask Mark Zandi. You suggested that 

we could provide incentives for Work Share. I assume one of the 

reasons why all 50 States have not gone ahead, one may be the 

murkiness of the Solicitor’s opinion, but there might also be something related to costs involved. Is that what you are talking about? 

Do you think the Federal Government has an appropriate role in 

underwriting some of the cost of moving to Work Share? 

Dr. ZANDI. Yes. More specifically, I think it would be useful if the 

Federal Government provided grants to States that do not have 

Work Share to set up those programs. That is an administrative 

cost, and obviously these agencies are in no position to do anything 

like this in this kind of environment, and will not be for a long 

time to come. 

I think that would be something that would be straightforward 

to do, and then provide technical assistance too, because you have 

14 

to establish a process. Employers have to work with employees. 

This is something that we do not have a lot of experience with, but 

we do have experience in some States and in Europe that seems 

to have worked quite well during this recession. 

Just to give you some support for that idea: in Germany, for example, their GDP, peak to trough, fell 6 percentage points; ours fell 

4 percentage points. Their unemployment rate rose to 8 percent; 

our unemployment rose to 10. Now, there are other reasons for it, 

but one of the key reasons is they have a very effective Work Share 

program. So I think it has been quite useful, and I would advocate 

grants to States that are interested in implementing the program. 

Senator BINGAMAN. Ms. Oates, is this something the administration is supporting, the idea of Congress appropriating funds for 

grants? Is this something that is in Senator Reed’s bill as well? 

Ms. OATES. Senator, the administration is really looking at all 

creative options. This is certainly one of them. As Dr. Zandi said, 

we looked at the model used in Germany, also in the U.K., where 

it has been a great help for keeping employment at a much higher 

rate. So, while I am not quite sure the administration is adopting 

or is backing any specific provisions, all of us are very interested 

in working with this committee to figure out something that would 

work well for the States here. 

Senator BINGAMAN. All right. 

On the other issue that you flagged, and Senator Baucus talked 

about it as well, this disincentive that is in the law to part-time 

work, what is needed there? Does Congress have to pass something 

there? If so, what? Have you proposed language for us there? 

Ms. OATES. We have language which we will give you, I hope, 

later this month. It is in clearance now. But this is a heartbreaking 

case, Senator. When people bring this to our attention, they do not 

realize that by taking temporary work or by taking a part-time job, 

they lose the additional weeks on their initial claim and go to a 

much lower benefit, in most cases. Bad situation. 

We are trying to improve that now so that they get better outcomes when they take on that temporary work or that part-time 

job. But, yes. We will have language specifically for you and work 

with you to make sure that is workable with the committee. We 

think this is just heartbreaking when we meet with people who fall 

into this hole. 

Senator BINGAMAN. And is that also in Senator Reed’s bill? 

Ms. OATES. Yes, I believe it—no. My staff is saying to me, no, 

it is not in Senator Reed’s bill. 

Senator BINGAMAN. All right. That would be useful, to see what 

your proposed language is there. 

Let me just be real clear. Dr. Zandi, I think you were very clear 

about your recommendation that Congress pay for the extension of 

these unemployment benefits and the various other things we have 

talked about here, the TANF Emergency Fund, but that we not do 

so now. So you are suggesting that the current proposals to extend 

unemployment benefits need to be approved without an offset? 

That is your proposal at this point, until we get further out of this 

recession? 

15 

Dr. ZANDI. Yes. It would be counterproductive to try to offset it 

in this year or the next because it would offset the benefit of the 

UI and the other benefits. Yes. 

Senator BINGAMAN. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Next, Senator Stabenow. 

Senator STABENOW. Thank you very much, Mr. Chairman. Thank 

you for holding this hearing, and to each of you, for being here. 

This is a critical piece of what we need to be focused on in terms 

of what is happening to families, to businesses, and our economy 

as things have shifted. 

We can talk about a variety of reasons for that, but the reality 

is, we are laser-focused, first, on creating jobs and supporting the 

private sector to be creating jobs, but we have many people who 

are caught, as we all know, in the middle of this. We cannot forget 

Americans who have worked all their lives and played by the rules 

and need to know right now that they have the support they need 

for their family. So this is a very important discussion for us. 

I would, first, just comment that, as you have talked about, one 

of the consequences of this very serious recession is the fact that 

more than 30 States have borrowed approximately $40 billion from 

the Federal Government for State unemployment trust funds to 

continue being able to pay for unemployment benefits for out-ofwork families. 

Twelve States have currently borrowed more than $1 billion. We 

have actually borrowed in Michigan—because we have had doubledigit unemployment since November of 2008—about $3.8 billion. 

So, rather than specifically talk more about that, I do want to say 

for the record, I think that going forward, we have to make sure 

that this does not result in the States having to shift to raising 

taxes on employers at this time, or other things that would be 

counterproductive to creating jobs. So I think our role federally is 

critically important moving forward on all of this. 

I would ask Dr. Zandi: we have talked about work sharing, which 

is very important in conversation and the questions so far, but 

could you talk a little bit more—you highlighted the positive impact of subsidized employment through the TANF Emergency 

Fund. Could you talk a little bit more about why you think that 

is important to continue? 

Dr. ZANDI. Sure. The TANF Emergency Fund is important for 

two reasons. First, it has been helpful in subsidizing job creation, 

particularly for youth, summer youth, which I think will be key 

this summer. The teenage unemployment rate is 26 percent, and 

we are going to have a lot of difficulty in a lot of communities 

across the country with such high unemployment. I think this 

would be very effective. 

In fact, if it is not extended soon—it does expire September 30— 

I do not think any of the funds will be used for summer youth programs later this year. It has also been helpful in creating jobs, 

transitional jobs, getting people back into work. 

The second big thing that it has been used for, obviously, is to 

help with caseloads. The rise in welfare caseloads has been quite 

significant, and the money has been helpful in families, getting 

them support. That has also been very key to providing not only 

16 

help to the families, but also to the broader economy, because that 

money is spent. So, two key ways it has been helping. I think, as 

has been pointed out, it has been quite effective in those States 

that have adopted it. 

Senator STABENOW. That is what I understand. 

Dr. ZANDI. Yes. 

Senator STABENOW. I would like to use my remaining time to 

talk about job training, because again, in the broadest sense, this 

is about creating jobs, it is about job training, and it is about not 

losing sight of the people right now who need help, who have lost 

their jobs through no fault of their own. But when we look at our 

job training programs, we have put a lot of emphasis on this in 

Michigan, actually. 

Since 2007, we have put over 120,000 people into training for indemand jobs through what we call our No Worker Left Behind bill. 

We are having a much higher rate than nationally in terms of participation. About 59 percent of our adults and dislocated participants are participating in job training versus 13 percent nationally. 

We show much higher job training efforts. 

My concern is, though, how can we better align the unemployment system with upscaling our workforce, supporting job training 

efforts? How can we incentivize workers to get new skills and credentials through the unemployment system? Can we better align 

this with our investments in community colleges that we have been 

making through our other efforts, the Workforce Investment Act 

job training program unemployment system? I mean, how can we 

better align this so it is simpler, more straightforward, easily 

accessed? How can employers play a larger role? What should we 

be doing? Assistant Secretary? 

Ms. OATES. Senator, clearly, the most important thing is that, before we put anybody in training, we make sure that we are talking 

to employers so that we are just not looking at national numbers, 

but we are looking at local labor market needs, and that employers 

have a say in what the training entails, not only getting them at 

the tail end. 

I think some of your community colleges in Michigan—you know, 

Jim Jacobs does a great job of this at Macomb Community College, 

but he does not start a program unless he has a business advisory 

group telling him what should be in the curriculum, not only coming at the end for a job fair. That is something that we need to promote more, both in our workforce investment system through our 

States and through our local service delivery people. 

Then we have to talk more openly about the people who went 

into the training and got a good job, not only saying they got placed 

in a job, but talking about how much they are making. I think outof-work workers are very concerned that they are not going to get 

replacement wages. Nowhere is that more true than in Michigan, 

where people were making good wages and they are afraid they are 

going to go to training and make considerably less. 

Senator STABENOW. Right. 

Ms. OATES. So it is a compromise, in my mind, of making sure 

that we have employers working with us from the beginning, which 

is new, and also looking at better giving report cards about the outVerDate Nov 24 2008 16:59 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 R:\DOCS\66995.000 TIMD
17 

comes of our job training programs in terms of the wages people 

attain by putting that time into training. 

Senator STABENOW. I know my time is up. But Mr. Holmes, did 

you want to just—please. 

Mr. HOLMES. I certainly agree with the statement. I think one 

of the keys is that we continue to focus on employment and look 

at performance in terms of employment as a key. Oftentimes you 

will have training programs that may provide some additional skill, 

but unless that is connected immediately and effectively to employment, then it loses its effect as far as getting individuals into work. 

Senator STABENOW. Thank you very much. 

Thank you, Mr. Chairman. 

The CHAIRMAN. You bet. Thank you very much, Senator 

Stabenow. 

Next, we have Senator Snowe, if you want to. Are you ready? 

Senator SNOWE. Yes. 

The CHAIRMAN. All right. 

Senator SNOWE. Unless—— 

The CHAIRMAN. No, no. Go ahead, if you are ready. 

Senator SNOWE. Yes. Thank you. Thank you, Mr. Chairman. 

Dr. Zandi, I know you mentioned in your remarks the importance 

of small business lending to easing and mitigating this job crisis 

that Americans are confronting. How important is it? Because as 

one of the issues that I have been arguing persistently—and I 

know I had conversations with the chairman in this respect about 

moving along small business legislation to expand and to extend 

what we did last year in terms of lending, especially through the 

SBA, increasing the loan guarantees, reducing lenders’ fees, so on 

and so forth—it actually did have an impact. 

I mean, there was a correlation between doing that and the 

amount of lending that occurred nationwide, certainly in my State. 

Unfortunately, those provisions expired at the end of the last year, 

and I have been trying to get a small business job recovery package. That should be an ultimate priority. I thought we would have 

done this in January. I know the Majority Leader has indicated we 

will consider it. 

But I am concerned that we are really lagging in our ability to 

get this done and turn this economy around with respect to job creation. I mean, whatever happens on Wall Street, it has not affected 

Main Street, frankly. That is what I am seeing. That is what I 

know Maine is experiencing, America is experiencing, so it really 

is crucial to re-ignite the recovery among small businesses. 

And so, how critical is this? Because here it is, April. We have 

yet to do it. So, we are slow-walking this legislation. Everything 

seems to be overtaking the priority of doing it. But how critical is 

it to creating jobs? 

Dr. ZANDI. I think it is vital. Here is a statistic that I think is 

telling: businesses or establishments that employ fewer than 100 

employees, let us call those small businesses, account for about half 

of all the jobs in our economy. In the last economic expansion, they 

accounted for two-thirds of the net job creation. So, if small business is not on track, then the job machine is going to have a difficult time getting going here. So, it is vital. 

18 

I think there are many reasons why small businesses are not hiring. I think one of the key reasons, and one that you can have an 

influence over—and you mentioned it—is the provision of credit. I 

think credit is a problem. Just take the National Federation of 

Independent Business survey that came out a day ago. Confidence 

is about as low as it has ever been. The question with regard to 

credit is clearly indicating that businesses are starved for credit. 

I think the SBA is the best, most direct, and most effective way 

of getting credit to these businesses quickly, and I would do several 

things. I think you have already proposed them or are considering 

them. Increasing the maximum size of an SBA loan; I think that 

is pretty clearly what should be done. Increasing the loan guarantee temporarily. It is 90 percent, I believe, under the current Recovery Act. 

Senator SNOWE. Right. 

Dr. ZANDI. At least extend that. I would even consider raising it 

to 95 percent, getting closer to a direct lending program, but only 

temporarily. And third, I would raise the interest rate cap. Right 

now, I think it is 275 basis points over prime. Prime is 3 percentage points. A 53⁄4-percentage point interest rate is not enough to 

compensate for risk, so I would allow that to be temporarily higher. 

I think if we did those three things—and there are a lot of other 

good ideas, but just quickly—I think you would make a big difference. 

Senator SNOWE. Well, I appreciate that, and I hope the message 

is heard throughout Congress, because it should be at the forefront 

of our agenda. I am concerned about it because, as I know as I return home and I talk to people, it is clear they are not hiring. I 

mean, small businesses. 

The lack of certainty and predictability about what is transpiring 

in Congress is not giving them the confidence to take on that added 

cost in hiring an individual. They would like to, but certainly are 

hesitant to do so right now. I know that it has had a cause and 

effect when we saw our lending increase by 86 percent nationally, 

and in my State over 270 percent last year, just by increasing the 

loan guarantee rates. But it is central to what we do. 

I am concerned about this persistent joblessness. I mean, the fact 

is, I know we have made slight improvements on a monthly basis, 

but nevertheless, in looking and talking to people who are unemployed in my State, it clearly is an emergency, without question, 

and we need to do something to turn that around. 

Ms. Oates, I wanted to ask you, to that point, I visited some career centers in Maine, and what I discovered were an enormous 

number of hurdles in implementing these programs. As you know, 

the Workforce Investment Act has not been reauthorized in, I 

think, almost 13 years. There are 15 different programs. As a result, people who are participating in the career center work programs are really facing, I think, the obstacles that are presented 

by the myriad requirements of these different programs. 

Is there a way of consolidating these training programs? For example, they should remain invisible to the recipients and the beneficiaries of these programs, and they are not. I mean, they are 

being affected by the multiplicity of requirements across the board 

19 

in all these training programs. Could we not use, for example, the 

Trade Adjustment Assistance program as a model for all? 

People are unemployed. I mean, that is the bottom line. Regardless of why they are unemployed, they are unemployed. Should we 

not synchronize all of these programs to make it easier for implementation for those who are on the front lines in administering 

these programs, as well as those who are receiving the benefits of 

these programs? 

Ms. OATES. Absolutely, Senator. The HELP Committee in the 

Senate is actually working on reauthorization of the Workforce Investment Act. It has never been reauthorized. It was written in a 

full employment economy. We have learned so much over the years 

of implementation about how to simplify. We are currently trying 

to do what we can through regulation and through guidance to the 

field to look at things like eligibility and common definitions, but 

we are in need of a reauthorization desperately so that we can 

break down some of the silos. 

I mean, one of the clearest examples in Maine, and everywhere 

else, is people who need adult basic education or English language 

and need some job training, and have to now go through two different paths to do that. Some States have come up with really creative ways—your State particularly has done a very creative piece 

of work on entrepreneurship. 

But we should not leave it up to the States to figure this out, and 

we should not require our front-line people to be masters of acronyms. So I believe that the Senate is going to reauthorize this year. 

I hope the House picks that up. It has always been a bipartisan 

bill from when I was with Senator Kennedy. We did it with Senator Jeffords and with Senator Gregg. So I really hope that this 

will be bipartisan and that we will get it through very quickly. As 

you saw firsthand, the system really needs innovative approaches 

in this legislation. 

Senator SNOWE. Well, I appreciate that, and I look forward to 

working with you in that regard, because it truly is something that 

has to be turned around immediately. Thank you. 

Ms. OATES. Absolutely. Thank you. 

The CHAIRMAN. Senator Grassley, you are next. 

Senator GRASSLEY. I should explain to the witnesses and my colleagues that I was absent for the first 45 minutes because I was 

questioning the Attorney General down the hall. I am glad to be 

here. I would put my statement in the record and go immediately 

to questions. 

[The prepared statement of Senator Grassley appears in the appendix.] 

Senator GRASSLEY. I would start with you, Ms. Oates. Your testimony mentions several job training, job sharing, and job subsidy 

programs. I would like to put these programs into context. As I understand it, today there are about 15 million unemployed workers. 

Roughly 6 million, or about 40 percent, currently receive unemployment benefits. CBO projects that we will spend over $130 billion 

this year on combined Federal/State unemployment benefits. 

I will give you two questions. Can you tell us how many of the 

unemployed participated in these programs and, in conjunction 

with that, how much do we currently spend on those programs? 

20 

Then, lastly, how much would it cost to expand these programs to 

cover all of the unemployed? 

Ms. OATES. Well, Senator, to give you an idea, last year our system worked with 30 million people in job search and activities like 

re ́sume ́ building. You know in this committee more than I do that we spent $140 billion in Unemployment Insurance last year. 

We are trying to get better, through our reemployment efforts, to 

directly connect someone, while they are collecting unemployment 

benefits, with training, and that training could be the training that 

Senator Stabenow mentioned that Michigan is doing, which is 

longer-term, or it could be shorter-term to get somebody an 

industry-recognized credential so that they can compete for a job 

in their local area. 

I think that our goal is to touch 100 percent of the people who 

are dislocated, full-time or part-time, and get them the appropriate 

level of service that they need. I think we realize that some of 

these people just need assisted job search. They need to know what 

jobs are in their area. Other people really need a much heavierdose response. So, it is difficult for me to give you a dollar figure 

in terms of what it would cost to touch every one of them in the 

appropriate way. 

I think, first, we need to prove to you and to the rest of Congress 

that we are using every single dollar you give us in the most effective way possible, and we are trying to do that through, as I mentioned to Senator Snowe, looking at ways that we can work with 

our sister agencies, like HHS, Children and Families, to make sure 

that we are working with TANF recipients as well, as they look for 

jobs, so that they do not have to duplicate services. 

I hope that we can continue to work with you and come up with 

a number, because I think it is hard for you to respond to your constituents unless you know what the number is to make sure that 

we can serve all the people. 

Senator GRASSLEY. Ms. Lee, your testimony mentioned that 

TANF emergency funds were created under the stimulus bill to 

subsidize jobs for low-income individuals. You cite one study that 

suggests the program has created 160,000 jobs. What evidence do 

we have that these are actually net new permanent jobs rather 

than temporary jobs that might end when the subsidies run out, 

or jobs that would have existed anyway, or jobs that were redistributed from somewhere else in the economy? 

Ms. LEE. I think, Senator Grassley, the States that have been 

most aggressive in this area, Texas, Florida, and Mississippi, for 

example, as they set these programs up, these are States that did 

not have subsidized employment prior, and the requirements that 

they put on the employers that participate often are the creation 

of temporary jobs. I think that one of the tests will be, did this lead 

to a permanent position? 

But in many cases, the results have been very, very strong. It 

would be something that the States would be very appreciative if 

they could report back to you in September when this program, 

right now, is scheduled to end, although we are hoping it is going 

to be extended. 

Senator GRASSLEY. All right. And again, for you, Ms. Lee, on reemployment services. Several studies cited in your testimony sugVerDate Nov 24 2008 16:59 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 R:\DOCS\66995.000 TIMD
21 

gest reemployment services reduced the duration of unemployment 

from less than 1 week to nearly 8 weeks. Assuming an average 

weekly unemployment benefit of $300, these studies seem to imply 

potential savings ranging from less than $300 to nearly $2,400 per 

unemployed worker. That seems to be such a variation. So I am 

looking for, what is the net effect? What is the average cost of 

these reemployment services per worker, and can they be expanded 

to cover a much greater share of the unemployed on a timely and 

cost-effective basis? 

Ms. LEE. Senator Grassley, I will answer your question in two 

parts. First of all, for the math portions, I would like to submit 

some testimony to you later to give you the accurate answer. The 

second thing that I would like to say with respect to reemployment 

services is that they are very similar to the intensive services that 

Ms. Oates mentioned, but we are dealing with claimants. 

When you bring a claimant in and you help them move down a 

path to employment, whether it is a career ladder, whether it is 

labor market information, job search assistance, helping them remove a barrier, helping them with subsidized employment, physically reaching out and working with that customer really moves 

them along the path because State workforce agencies are effective 

in helping get claimants back to work. We have three studies cited 

in the testimony. We have additional State studies that we have 

done in Washington and other States as well. 

So the key is to be able to work with the claimant so they do not 

give up, so that they can effectively job search, so that they do not 

look for their same income in an occupation that is not in demand 

in the community. All of that advice helps that person make a better decision, and that is the reason why those services are so effective. 

Senator GRASSLEY. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Grassley. 

Next is Senator Menendez. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Secretary Oates, good to see you again, having had you serve in 

New Jersey as well before. 

Ms. OATES. Nice to see you, Senator. 

Senator MENENDEZ. We appreciate your service. 

Mr. Holmes, let me ask you. I read your testimony. You argued 

that increased Unemployment Insurance disincentivizes people to 

work and increases the length of unemployment. On page 8 of your 

testimony, you claimed to cite evidence of this by arguing that 

since UI payments have been extended, long-term unemployment 

has increased by about 4 weeks over the past year. 

Now, I looked at it, and I do not know how that is reconciled 

with the fact that there were millions of job losses through late 

2008 and into 2009. Do you not think that that is the primary factor that led to the increase in long-term unemployment? 

Mr. HOLMES. Well, I think what I said in my testimony is that 

those payments contributed to the increase in duration. There are 

a couple of studies that have been done on that—actually, quite a 

few. CBO recognizes that effect. 

Also, there was a study from Pennsylvania that I cited in my testimony that laid out, in quite a bit of detail, what happened in the 

22 

1980s. As there were increases in the number of weeks that were 

provided, the duration of unemployment increased. If you look at 

that data, it shows that immediately after the exhaustion of whatever the latest extension was, that the reemployment spiked up 

and the authors there speculated or found—— 

Senator MENENDEZ. I do not know about the 1980s, but let me 

ask you about a simple figure, 5:1. There are five people looking 

for every one job that is presently available. Now, when I was a 

child and we used to do musical chairs at school, and you would 

go around the table and the music stopped, there was somebody 

left out. Well, this is worse. There is only one chair with five people 

trying to sit in it. 

It just seems to me that to suggest that Unemployment Insurance is the reason for that—you say on page 7 of your testimony 

that one of the most effective ways to get unemployed workers back 

to work is for them to take responsibility personally and to be motivated to take jobs that are available. 

Mr. HOLMES. Right. 

Senator MENENDEZ. Well, there are a lot of people looking for 

jobs that are available. The problem is, there are not enough jobs 

available. So I am not sure. This is, I think, a textbook example 

of correlation not equalling causation. The causation here is that 

we had a massive drop-off in jobs and people working hard to try 

to find one. I know plenty of people in New Jersey who were telling 

me they are looking for a job. They are not looking for a handout, 

they are looking for a job. So I just want, for the record, to have 

a different view than yours. 

I appreciate your view, but I just do not understand, when you 

have 15 million people looking for 3 million jobs, how that in fact, 

at the end of the day, is the reason why people want to be lazy and 

hang onto unemployment benefits that are a fraction of what they 

made. 

Dr. Zandi, Ms. Lee, or both, the Recovery Act allowed States to 

borrow from the Federal trust fund without having to pay interest 

through 2010. My own State is one of 34 States that have outstanding loans. But with unemployment hovering around 10 percent, it seems to me that everything that we are doing, like the 

HIRE Act and other initiatives, to try to get the private sector, particularly small- and mid-sized businesses, to hire people, that is 

counter-intuitive to now have, in essence, taxes rise on them at this 

time. Is either forgiving or postponing the whole question of the 

interest-free loans something that we should be considering at this 

particular time? 

Ms. LEE. Senator Menendez, the States have asked to have their 

interest payments waived for 2 more years, and States think that 

is very important. I also think that, with respect to returning unemployment funds to solvency, that there are several options that 

we have employed before that we have done in the 1980s where 

States, if they can put a plan together, can get some flexibility with 

their FUTA taxes. Those are some options that we have used in the 

past to help States get back to solvency. 

I think what is important is that we do have a solvent system, 

and that for States that have remained solvent, that there is also 

something for them so that there are incentives for States to have 

23 

a sufficient amount of reserves in their trust fund so that we can 

pay out benefits when benefits are needed. 

Dr. ZANDI. I think it would be very therapeutic to extend that 

grace period for at least 2 years. I mean, if you look at the fiscal 

situation of the States, nearly every State across the country has 

a very severe problem, and it would be very counterproductive to 

put this on them because it will take it out in the form of program 

cuts, job cuts, or tax increases. So I think it makes perfect sense 

to extend this out. I believe there are also penalties that need to 

be addressed as well. 

I would not forgive this until you straightened it out. I think that 

would be inappropriate. But I think I would certainly extend out 

the grace period. By my calculation, the fiscal year 2011 budget for 

States is adding up to a $50-, $60-billion budget hole at this point, 

so it is very serious. 

Senator MENENDEZ. Finally, Mr. Chairman, if I may. 

The CHAIRMAN. Sure. 

Senator MENENDEZ. Secretary Oates, in New Jersey our previous 

Governor created a program that incentivizes businesses to hire 

long-term unemployed workers who have exhausted their benefits. 

In looking at ways that are different than just having unemployment, do you think that that type of effort has merits, something 

to be considered at a more national level? 

Is there a better alternative than simply expanding the number 

of tiers indefinitely or leaving families out in the cold? It seems to 

me that if we can get people to work and create productivity by 

incentivizing the private sector to do so, and in doing so that company grows and then maybe they have the ability to employ not 

only that individual on a more permanent basis but others, it 

would be looking at UI in a different way. 

Ms. OATES. Senator, I think we need to look at innovative ways 

to deal with the Unemployment Insurance issue. I agree with everything that everyone has said about the importance of solvency 

and extending the interest-free period, but I have stolen the idea 

from New Jersey and just this week put $90 million of our own 

AARA National Emergency Grant money on the street for on-thejob training, looking specifically at getting long-term unemployed 

into subsidized employment for up to 6 months, because I believe 

in business people. 

I know if they see a really high-quality worker, they are going 

to hire them. They are going to make sure that they make room 

for that worker because they are not going to want them to go to 

their competitor. So, I think what New Jersey did is exactly the 

right thing. 

I think getting people into real jobs, learning skills while they 

are getting paid, just like an apprenticeship model, a learn-whileyou-earn model, letting the employer see firsthand your quality, is 

going to make that employer much more confident. We have heard 

from the experts that employers are nervous, they are anxious. 

They almost lost their business in this recession, so they are going 

to be very slow to step up to the plate and hire new people. 

We need to use whatever resources we have. I do not think $90 

million nationwide is going to do a lot, but I hope that I can come 

back to this committee and to the HELP Committee and say that 

24 

on-the-job training, just like incumbent worker training, are things 

that we should really be looking at to get people paid while they 

are temporarily unemployed and on the track back to full-term employment. 

Senator MENENDEZ. We will look forward to seeing the success. 

Ms. OATES. Yes. Thank you, Senator. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator Menendez. 

Next, Senator Wyden? 

Senator WYDEN. Thank you, Mr. Chairman. Thank you for holding this hearing. I think this is an important subject, because we 

essentially have had a change in America in the very nature of unemployment. I mean, it used to be temporary, and many workers 

would return to their previous jobs. It is simply not that way anymore. Workers tend to be unemployed for longer periods of time. 

It is unlikely that they are going to return to their previous employer, and unfortunately sometimes not even their same occupation. 

The Bureau of Labor Statistics shows that, when unemployed 

workers regain employment, a clear majority of those workers earn 

less in the new jobs than they did in the old jobs. The data also 

shows that up to one-third of the workers take jobs that pay less 

than 80 percent of what their old jobs paid. 

Now, in recent years, policymakers have begun to look at a variety of areas. I think I want to ask you, Ms. Oates, about two of 

them. One of them is wage insurance, and the other is a program 

that you will probably recall that Senator Kennedy and I authored, 

the self-employment program. 

Now, policymakers look at wage insurance as a kind of public insurance approach that can temporarily replace a portion of a worker’s lost wages when they become reemployed. Obviously wage insurance would help workers with new jobs who are receiving onthe-job skills training. 

With self-employment, we have seen a number of States—a small 

number of States—essentially use it as a tool so that folks who are 

unemployed can take their benefits and in effect use them as a 

trampoline to set up small businesses. For example, in my State 

there has been great interest in the high-tech sector; for example, 

somebody who is laid off in high-tech using their unemployment 

dollars to go set up a web-based business, say the next eBay or 

something of that nature. 

Give me your thoughts, Ms. Oates, on how it would be possible 

to expand the government’s efforts in the two areas I mentioned: 

wage insurance and the self-employment effort. 

Ms. OATES. Well, let me start with the self-employment effort, 

Senator, if I may, because we actually contracted with an evaluation firm to look at Project GATE—Growing America Through Entrepreneurship. The results were amazing. The people who went 

through the self-employment training, literally about a third of 

them started their own business, which is pretty good, but 100 percent of them became employed. 

So that training to start your own business gave them more confidence, more skills, and made them more competitive in a very 

shrinking job market to get a good job. I think that we are working 

25 

right now with the Small Business Administration to look at the 

opportunities that we have to do their self-employment program 

through our One-Stops, to get information out, so they are not limited just with their regional offices, but could expand it into our regional offices as well, hitting over 3,000 locations across the Nation. 

I have to say that your State has been so hard hit and is very 

good at putting in for Trade Adjustment Assistance, probably because you are on this committee and you give them good information. We have seen a lot of people coming through the trade program looking at that self-employment option, too. 

So we have not done the data collection to see if any of them 

have started an eBay, or that type of business. But they have gotten employment out of it, even if they are just employing themselves. But many more of them are employing other people, creating jobs in that community. 

On wage insurance, I am going to do a public confession here. 

With all the work I have done in the past 9 months, I have not 

really looked into that very much, so, if you would allow me to get 

back to you on that, I would appreciate it, Senator. 

Senator WYDEN. I will certainly do that. My question is essentially to get your thoughts on the concept of wage insurance. 

Ms. OATES. Oh, I think it is a great concept. 

Senator WYDEN. So you think it is one that would have some potential because it, in effect, could be assistance that workers would 

see as an addition to the Unemployment Insurance, not replacing 

it. But again, what I thought was important is that we look to new 

models. 

I mean, I sense, particularly in this country, the people who are 

being laid off have extraordinary capacity in many instances to innovate, and this gives them a chance to set up their own businesses. Wage insurance is perhaps a different tool for a different 

group of individuals, but something that I think also has a lot of 

potential. So, could you take a look at the wage insurance effort? 

Ms. OATES. Absolutely. 

Senator WYDEN. How long would it take for you all to try to put 

together something resembling a concept paper of how that might 

work? 

Ms. OATES. I think we could give you something with ease by the 

end of the month. It might not be complete, but it would be at least 

a paper that we could start some discussion with you. 

Senator WYDEN. Great. 

Mr. Chairman, I would like to work with you, in particular, in 

both of those areas. The wage insurance concept, you have done, 

I think, very, very helpful work on the TAA program. This would 

be sort of another dimension to it. Then self-employment, I think 

also would have a chance to put more folks back to work. So, I 

would like to work with you on it. 

The CHAIRMAN. Good. Thank you, Senator. 

I would like to ask you, Ms. Lee, because of your unique role as 

an employment services administrator, and also as a veteran, what 

could we do better to serve our veterans? I just got back yesterday 

from Pakistan and Afghanistan. Whenever I go over, I am just 

very, very impressed with our young men and women. They are 

just aces. 

26 

On the health side, I have worked hard to address PTSD. The 

program started first in Montana, actually, and we enacted it now 

with the military, for media to do personal interviews and 30-day 

and 60-day interviews. I think it is an extra year after that. But 

with respect to jobs, just what ideas do you have? How could we 

better serve our veterans who are out of work, who come home and 

need work and so forth? 

Ms. LEE. Certainly, Senator. First of all, I would like to say I 

think that most States intend to serve veterans well and we do our 

best, but there are certain things that we could always do better. 

For skilled veterans, I will start with those. 

So let us take a veteran that was skilled in health care, nursing. 

Depending on your branch of service and depending on the veteran’s home State, they may have to seek additional training and 

take testing before they are licensed to have a job in that particular field in that particular State. 

Some States have waivers, some States are very good at giving 

credit for military service, but it is perceived by the veteran to be 

a barrier. And also, if there is a backup in the training class, then 

that veteran has a lag before they can go to work as a paramedic, 

although they were a paramedic in the navy. 

So the first thing that I think that we can do better is that, for 

all of the service branches that offer schools that are professional 

with skills that are easily transferrable to the civilian sector, that 

those institutions are accredited in every State across the country 

and that the licensing and certification process in that State is as 

transparent as possible. If the State has waiting lists, maybe there 

are ways to give the veterans priority. So that is the first thing 

that I would say that we could do for veterans who have a skill 

that is easily transferrable. 

For veterans who come from combat service, that is not quite as 

easily transferrable unless that veteran wants to go into law enforcement or something like that. Then what we really have to do 

is, first, have the staff to counsel the veterans. That is so important. It takes consistent counseling. Many States outreach to veterans while they are deployed, but they are distracted. Most veterans receive a transitionary out-briefing when they transition out 

of their base. In Washington, it is Joint Base Lewis-McChord. They 

are distracted. They want to go home. 

Many veterans are allowed to have Unemployment Insurance 

benefits and others, but it takes a while for the veteran to transition mentally and physically before they are ready to begin their 

job search. We should be counseling those veterans consistently 

about their training benefits that they are offered so that they take 

full advantage of them while they are in place, and we have to be 

consistent with that. 

If the veteran chooses to work, what we have to do is then to be 

able to help them translate that military language into something 

that civilians can understand and employ, because veterans, as we 

know, are very, very good workers. 

The last thing, if there is some type of family stress, because veterans have families, we should be looking out for the dependents 

of those veterans, and we should give the same level of services to 

the wives and children of veterans as the veterans themselves. I 

27 

think that many States are not able to do that. So, those are three 

easy areas, I think, where both the State and the Nation could help 

serve our veterans. 

The CHAIRMAN. But are you aware of efforts to remedy each of 

those three? 

Ms. LEE. Senator Baucus, every State has many efforts. It almost 

gets back to the one-stop concept that is so important. Volunteer 

organizations. States have State funds. Washington had a State 

fund at one point. But veterans may not live in a metropolitan 

area. They may live in a rural area. 

All those organizations have to know what all the services are, 

so they really need to be tied in strongly to the one-stop system so 

that we can refer the veteran appropriately. Of course, you have to 

have funding for these things as well. Then the veteran has to be 

healthy, mentally and physically, so that they can be a good employee. 

The CHAIRMAN. But are you aware of any efforts, whether DoD, 

the Pentagon, or any of the branches, that are trying to coordinate 

one-stops to more effectively and efficiently address what you are 

suggesting? 

Ms. LEE. Yes. There are many, many efforts, some everyone 

agrees with, some that they do not. But at the State level, at the 

service level, there could always be more opportunity to have cross 

knowledge and to be comfortable with the services that are provided. 

Ms. OATES. Senator, if I may. 

The CHAIRMAN. Yes. 

Ms. OATES. We have a Division of Veterans at the Department 

of Labor, and they operate what is called TAP, which is the Transition Assistance Program, which is what Karen was referring to. 

That is at a military base, before you go back to your community. 

Right now, 80 percent of the people who exit participate in that 

program. We are in negotiations with the Department of Defense 

to make sure 100 percent of exiting veterans will at least have that 

level of service. 

In addition, one specific population of veterans is particularly 

tough to serve. Those are those young veterans who are coming out 

who may be 20 to 24, and many of them are not able to go home 

for a variety of reasons. So this year we will begin a pilot program 

where we place up to 300 of those in three different Job Corps facilities to test out what happens if we take those young veterans, 

many of them not the high-skilled folks, or they would have stayed 

in the military, and link them with career training and some additional education in a setting that is residential, but in a cohort of 

like military folks so that we are going to be able to tell you how 

quickly we can get them employed. That young veteran population 

that is coming out, kids who went right out of high school, did not 

make it. They got there and realized they did not want to do a 

career-length stint. They are coming back. They have very few employment options. 

Tragically, we are finding that many of them end up as the 

homeless veterans whom we try to serve in our programs. So, we 

would be delighted to come back to you first to tell you about what 

the interest was in that program for just those young veterans beVerDate Nov 24 2008 16:59 Jul 06, 2011 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 R:\DOCS\66995.000 TIMD
28 

cause, as you know for Job Corps, you cannot be older than 24 

when you enroll in Job Corps, so it would be a very narrow piece 

of the veterans, but we think it is going to be really promising, because we think that they will accelerate through that program and 

hopefully get placed in jobs. 

The CHAIRMAN. I appreciate that. 

I would like to hear your follow-up, frankly. You see it. You talk 

to the kids over there, and some of them are not sure what they 

are going to do when they get back. 

Ms. OATES. That is right. 

The CHAIRMAN. That is very true. 

Ms. Oates, could you tell me a little bit about Georgia Works and 

how you make it work from an effective employment training perspective, as well as with respect to the Fair Labor Standards Act, 

and just how do you deal with that? 

Ms. OATES. Senator, we operate in collaboration with the States, 

so the States have a list of eligible activities for folks who are on 

unemployment. As long as they meet our standards under UI, we 

do not sanction them, but we accept them. That is how Georgia 

Works came into being. The Commissioner there, Michael Thurmond, was a big advocate of this program. He is confident that this 

program meets the guidelines that our wage and hour folks have 

put out. 

We just want to make sure that when workers are in those kinds 

of programs they are not being abused by the employer, that they 

are not displacing positions that should be held by full-time workers. Commissioner Thurmond says that they have had amazing results, but that is not a program that either we oversee or we fund; 

Georgia operates this program purely through State dollars. They 

do not use any Federal dollars. 

But we have put out our guidance to make sure that other States 

that have looked at this as a promising practice, if they choose to 

implement something like it, implement a legal program that is 

giving workers an opportunity, a training opportunity, and not 

abusing them and not holding back other workers from getting fulltime employment. 

So it is a difficult program for us to endorse. We do not fund it. 

We do not collect data on it. But obviously we trust the Commissioner there to do things, and we have not heard anything from 

participants to say that they have been abused. We are watching 

it as other States develop it because it seems like an area where 

there could be some abuse unless the Commissioner were being as 

alert about it as it seems that the Commissioner in Georgia has 

been. 

The CHAIRMAN. Well, I thank you all very much for participating. 

Before we do leave, though, does anybody have a little thought in 

the back of his or her mind that is kind of nagging back there that 

you kind of want to address? Or to state the same point differently, 

has anybody said anything so outrageous it needs to be addressed? 

[Laughter.] 

Ms. OATES. That is so nice, Senator. We just want to continue 

working with you. We know we have a lot of work to do on this. 

The CHAIRMAN. Oh, we do. We do. 

Ms. OATES. So we look forward to working with you. 

29 

The CHAIRMAN. Yes, we do. And we with you. 

So, thank you very, very much. I appreciate it. 

The hearing is adjourned. 

[Whereupon, at 11:33 a.m., the hearing was concluded.] 

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