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76–191 2012

MOVING FROM UNEMPLOYMENT CHECKS TO 

PAYCHECKS: ASSESSING THE PRESIDENT’S 

PROPOSALS TO HELP THE 

LONG-TERM UNEMPLOYED 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HUMAN RESOURCES 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

OCTOBER 6, 2011 

Serial No. 112–HR08 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

GEOFF DAVIS, Kentucky, Chairman 

ERIK PAULSEN, Minnesota 

RICK BERG, North Dakota 

TOM REED, New York 

TOM PRICE, Georgia 

DIANE BLACK, Tennessee 

CHARLES W. BOUSTANY, JR., Louisiana 

LLOYD DOGGETT, Texas 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

JOSEPH CROWLEY, New York 

JON TRAUB, Staff Director 

JANICE MAYS, Minority Staff Director 


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C O N T E N T S 

Page 

Advisory of October 6, 2011 announcing the hearing ........................................... 2 

WITNESSES 

PANEL 1: 

The Honorable Ron Wyden, Senator from the State of Oregon ....................... 6 

The Honorable Jim Renacci, Representative from the State of Ohio .............. 12 

The Honorable Hansen Clarke, Representative from the State of Michigan .. 15 

PANEL 2: 

The Honorable Jane Oates, Assistant Secretary, Employment and Training 

Administration, U.S. Department of Labor .................................................... 16 

PANEL 3: 

Maren Daley Executive Director, Job Service North Dakota ........................... 52 

Dawn Deane, Unemployed Worker ..................................................................... 61 

Don Peitersen, Director of Unemployment/Workforce Project, American Institute for Full Employment ............................................................................ 66 

Chris McConnell, Workforce Consultant, AlliedBarton Security Services ...... 82 

SUBMISSIONS FOR THE RECORD 

Aaron Benjamin, Statement ................................................................................... 136 

American 99ers Union, Statement ......................................................................... 142 

TrueBlue, Statement ............................................................................................... 145 

QUESTIONS FOR THE RECORD 

The Honorable Geoff Davis ..................................................................................... 90 

The Honorable Rick Berg ........................................................................................ 113 

The Honorable Tom Reed ........................................................................................ 119 

The Honorable Llyod Doggett ................................................................................. 126 


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MOVING FROM UNEMPLOYMENT CHECKS TO 

PAYCHECKS: ASSESSING THE PRESIDENT’S 

PROPOSALS TO HELP THE 

LONG-TERM UNEMPLOYED 

THURSDAY, OCTOBER 6, 2011 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON HUMAN RESOURCES, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 9:03 a.m. in Room 

B–318, Rayburn House Office Building, the Honorable Geoff Davis 

[Chairman of the Subcommittee] presiding. 

[The advisory announcing the hearing follows:] 


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ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

Chairman Davis Announces Hearing on Moving 

from Unemployment Checks to Paychecks: 

Assessing the President’s Proposals to Help the 

Long-Term Unemployment 

October 06, 2011 

Congressman Geoff Davis (R–KY), Chairman of the Subcommittee on Human Resources of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing reviewing unemployment benefit proposals in the 

President’s latest jobs plan and assessing whether they will help the long-term unemployed return to work. The hearing will take place on Thursday, October 

6, 2011, in Room B–318 Rayburn House Office Building, beginning at 

9:00 a.m. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. Witnesses will include a representative 

of the U.S. Department of Labor (DoL) as well as other public and private sector 

experts on unemployment benefits and employment security policies designed to 

promote reemployment. However, any individual or organization not scheduled for 

an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. 

BACKGROUND: 

In August 2011 (the most recent official data), the U.S. unemployment rate was 

9.1 percent, 14.0 million individuals were unemployed, the average duration of unemployment was a record high of over 40 weeks, and 6.0 million individuals were 

long-term unemployed—defined as unemployed for 27 weeks of longer. 

The Federal-State unemployment compensation program created by the Social Security Act of 1935 assists unemployed individuals by offering weekly unemployment 

benefit checks while they search for work. According to DoL, in order to be eligible 

for benefits jobless workers must have a history of attachment to the workforce and 

must be able and available for work. 

As a result of a series of Federal extended benefit laws enacted since 2008 that 

now provide up to 73 weeks of Federal benefits, the maximum number of weeks of 

unemployment benefits payable per person has grown to a record 99 weeks, which 

is currently available in 21 States with especially high unemployment rates. Since 

mid-2008, $180 billion in Federal extended unemployment benefits have been paid, 

with most supported by Federal general revenues. 

As weeks of unemployment benefits and total spending have grown, so have total 

payments made in error. According to DoL, improper payments of unemployment 

benefits reached record highs in 2010, with $17.2 billion paid in error, equal to 

11.2% of all payments. 

On September 8, 2011, the President announced his most recent plan to assist the 

long-term unemployed in returning to work. This plan would extend the availability 

of up to 99 weeks of total unemployment benefits through CY 2012, at an estimated 

cost of $44 billion. Also within the Subcommittee’s jurisdiction, the President’s plan 

proposes providing an additional $10 billion in one-time Federal funds to States to 

promote various return-to-work efforts, including wage subsidies, subsidies for employer training of UI recipients (along the lines of the ‘‘Georgia Works’’ program), 

work sharing, wage insurance, and reemployment assessments, among other of 

what the Administration terms ‘‘promising strategies.’’ 

In announcing the hearing, Chairman Davis said, ‘‘This hearing will review a 

number of measures the President recently proposed to assist especially 

the long-term unemployed in returning to work. I hope we can build on our 

previous findings on the importance of better engaging the unemployed 


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and providing States more flexibility in assisting them. I look forward to 

identifying possible common ground when it comes to helping more longterm unemployed beneficiaries return to work, and doing so in a fiscally 

responsible manner.’’ 

FOCUS OF THE HEARING: 

The hearing will focus on a review of the President’s recent proposals designed 

to help long-term unemployed individuals return to work. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘Hearings.’’ Select the hearing for which you 

would like to submit, and click on the link entitled, ‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word document, in compliance 

with the formatting requirements listed below, by the close of business on 

Thursday, October 20, 2011. Finally, please note that due to the change in House 

mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House 

Office Buildings. For questions, or if you encounter technical problems, please call 

(202) 225–1721 or (202) 225–3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for written comments must conform to the guidelines listed below. Any submission 

or supplementary item not in compliance with these guidelines will not be printed, but will be 

maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word format and MUST 

NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised 

that the Committee relies on electronic submissions for printing the official hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone, and fax numbers of each witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://www.waysandmeans.house.gov/. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

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Chairman DAVIS. Good morning. Thank you all for joining us 

today. Today’s hearing is on the President’s proposals to help the 

long-term unemployed get back to work, which are part of his latest jobs plan. 

There is certainly bipartisan agreement on that goal of getting 

people back to work, but we need to do a better job helping all of 

the unemployed return to work, because today’s short-term unemVerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00007 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191

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ployed workers risk becoming tomorrow’s long-term unemployed. 

For example, one of America’s 14 million unemployed workers, Ms. 

Dawn Deane, will testify shortly about her experience since being 

laid off in June. She’s not ‘‘long-term unemployed,’’ but why should 

we wait until she reaches that stage before she gets effective help 

in getting back to work? 

Yet that’s largely what the President’s latest plan proposes, 

starting with its call to extend unemployment benefits for up to 99 

weeks for another year. That has a familiar ring, because this 

would be the tenth extension since mid-2008. That’s left a long 

track record of assessing whether extending unemployment benefits will create jobs, as some have claimed. 

For instance, then-Speaker Nancy Pelosi last year said that extending unemployment benefits is ‘‘one of the biggest stimuluses 

[sic] to our economy. . . . It creates jobs faster than almost any other 

initiative that you can name.’’ But in reality, since federal extended 

benefits began, the unemployment rate rose from 5.6 to 9.1 percent, 

and over 6 million jobs disappeared. Federal benefits have already added $180 billion to the deficit, 

and today we are being asked by the President to spend another 

$50 billion next year. Other proposals in this plan have a familiar 

ring, too. For example, like provisions in the Democrats’ 2009 stimulus law, the President’s latest plan proposes more temporary federal funds if states adopt UI policies dozens of states already support. If these programs have merit, and many states already use 

them, why must the Federal Government again spend billions of 

dollars for other states to adopt them, too? 

There is no free lunch here. The Administration has proposed 

new taxes on job creators to pay for this new spending, but Senate 

Democrats have already rejected some of those. Meanwhile, the Administration’s budget, which was unanimously rejected in the other 

body, called for nearly $60 billion in permanently higher unemployment taxes on jobs in the coming decade. It is hard to see how permanently higher taxes on jobs will help the unemployed get back 

to work. 

The President’s plan is noteworthy for steps it does not take, 

such as providing states more flexibility over UI funds, so fewer 

people become long-term unemployed. This committee approved 

such UI waiver authority to the states earlier this year. Just last 

week, President Obama signed into law a bill cosponsored by my 

friend Mr. Doggett, among others, to provide states waiver authority in child welfare programs. I had the privilege of being in the 

Oval Office last Friday to see that bill enacted into law. And that 

shows that we can make progress from a bipartisan perspective, focusing on the process and the real economics and opportunities to 

help people move forward. 

If states can be trusted to design better programs for children at 

risk of abuse and neglect, can’t they be trusted to test ways to better help the unemployed get back to work, using their own state 

funds? 

Other important reforms are missing, too, like strengthening 

work search and better engaging unemployed workers in training— 

reforms that were needed even before the recession. The good news 

is these sources of improvements to help all unemployed workers 


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can and should be included in any legislation enacted this year to 

help the unemployed return to work. 

I look forward to working with my colleagues and the Administration to that end, and welcome all of our witnesses today to discuss how we can craft the most effective policies to do just that. 

Without objection, each Member will have the opportunity to 

submit a written statement and have it included in the record at 

this point. And I would like to yield now to my friend, Lloyd 

Doggett. 

Do you care to make an opening statement? 

Mr. DOGGETT. Thank you very much, Mr. Chairman. This is an 

opportunity to review the proposals of the President to assist the 

unemployed find work, and to listen to the creative recommendations of our colleagues. 

Today in America the problem that we face is not the unemployed, but unemployment. Too many Americans remain unemployed because of lack of work, not for their lack of wanting to 

work. We must stop the blame-the-victim approach of just blaming 

unemployment on the unemployed. Thus far this year we have yet 

to vote in the House on a single meaningful jobs bill. And threats 

of default on our debt and threats to shut down the government 

only set back our economic recovery and cost us more jobs. 

There is a great difference in this country between what happens 

to some unemployed citizens. Those at the top of the economic ladder don’t need to worry about unemployment insurance. Last 

month the executive at Hewlett Packard, HP, got a $13 million 

golden parachute after he was dismissed when his company’s stock 

price fell by half. But for the rest of America, and particularly the 

working-age poor, of whom we have more than at any time in 

about 50 years, things are considerably different. 

As luxury goods fly off the shelves at some specialty stores, WalMart has reduced the size of its toilet tissue rolls because so many 

people can’t afford to buy the old size. When folks lose a job 

through no fault of their own, the least we ought to do is extend 

a life line. 

In examining the provisions of the President’s Americans Job Act 

relating to unemployment, there are several new initiatives that 

merit our study. If Congress fails to act by December 31st on extending Federal unemployment insurance benefits, more than 2 

million people will lose their unemployment assistance by the middle of February. And throughout next year, a total of six million 

Americans will be without assistance. 

The President’s proposal is a good place to start in addressing 

this problem. This doesn’t mean I think that every aspect of his 

proposal has the right answers, or that he even has the best answers on all aspects of this problem. But I especially emphasize the 

need to extend Federal unemployment assistance at this time of 

continued economic downturn. Terminating unemployment assistance would hurt our nation’s economy by further suppressing consumer demand and confidence. 

The Economic Policy Institute has estimated that allowing the 

extended Federal unemployment program to expire would cost this 

country over half-a-million jobs. This amounts to a double whammy 


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for the unemployed. They lose their benefits, and jobs become even 

more difficult to find. 

And there is near unanimity among economists that few government expenditures have more positive stimulative effect. It’s true, 

it doesn’t solve all the jobless problem in the country. But economists of all political stripes agree that one of the best ways to stimulate the economy is to make payments to those who have no 

choice but to spend those dollars immediately on the necessities of 

life. 

But things could get even worse for the unemployed if the proposal before the House Appropriations Committee to cut job training and unemployment services by 75 percent is effective. 

Finally, while there is much ballyhooing about the so-called 

Texas Miracle, the unemployment rate in my state, 8.5 percent, 

stands higher today than at any time in the last quarter of a century. Our state is also a good example of what happens when ideological constraints and political imperatives produce decisions that 

harm both employers and employees. 

Let’s hope that this hearing is just the first step in forging a 

stronger consensus that we must not abandon the millions of our 

neighbors who depend on unemployment insurance to make ends 

meet until they can be successful in securing a new job. Let’s work 

together to move our economy forward, and increase the opportunity for folks looking for work to find it. Thank you, Mr. Chairman. 

Chairman DAVIS. Thank you, Mr. Doggett. Before we move on 

to our testimony, I would like to remind our witnesses that all oral 

statements need to be limited to five minutes. And, however, without objection all of the written testimony will be made part of the 

permanent record. 

On our panel today we will be hearing from several of our distinguished colleagues. First will be the Honorable Ron Wyden, Senator from Oregon. Welcome to the panel. The Honorable James 

Renacci of Ohio, accompanied by the Honorable Hansen Clarke of 

Michigan. Thank you all for joining us today. 

Senator Wyden, please proceed with your remarks. 

STATEMENT OF THE HONORABLE RON WYDEN, A UNITED 

STATES SENATOR FROM THE STATE OF OREGON 

Senator WYDEN. Thank you very much, Mr. Chairman, and it 

is a pleasure to be with you and Congressman Doggett. I had a 

chance to serve in the House of Representatives. It is good to be 

back. And let me first of all say I am going to spare you the filibuster this morning. And if I could just make my prepared remarks 

a part of the record, perhaps just kind of summarize a few 

thoughts. 

Chairman DAVIS. Without objection. 

Senator WYDEN. Thank you, Mr. Chairman. I particularly appreciate the way you, Mr. Chairman, and others are looking at trying to find a bipartisan way to make some changes in the unemployment system to provide more opportunities for our workers, 

folks that are hurting, to get ahead. 

And what I want to do is just start this brief discussion with my 

belief that this isn’t our grandparents’ job market. I think we all 


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understand that we saw our grandparents and our parents very 

often get caught up in the typical business cycle caused by bad 

weather, or an increase in the price of raw materials, something 

like that. They would be unemployed for a few months, six, eight 

months, but their jobs would come back. 

We know today that a lot of lost jobs aren’t coming back, and we 

have to start with that basic understanding. And so, I come to offer 

the theory that, in a bipartisan way, we could start with the proposition that a significant number of folks who are unemployed are 

essentially treading water in the unemployment system with no 

way of getting ahead. And these are folks who now have one of two 

choices. 

They’ve got these two choices, which aren’t particularly good for 

them, and they aren’t particularly good for taxpayers. They can 

take their unemployment check and keeping looking for jobs that 

no longer exist or they can take their unemployment check and go 

into a training program that is not as valuable as the knowledge 

in their head and the work ethic in their body. 

So, what I would like to suggest is that, on a bipartisan basis, 

we look at the idea of reforming the unemployment system to give 

those who are qualified to do so the opportunity to get off the 

treadmill. We should let them use the marketable skills that they 

have often picked up in decades of employment in the private sector, to become self-employed in the private sector, where they’re 

going to be paying taxes and often putting others to work. 

Now, I want colleagues to know that I don’t think this is for everybody. I am not suggesting you can be unemployed and just walk 

into the UI office and say, ‘‘I am going to go set up a biotech company,’’ or something of that nature. But if you look around the 

country at what we’ve done in the last 15 years with these programs on a small scale—and I authored federal SEA law in the 

1980s—we see people setting up welding shops, we see folks doing 

innovative work in wood products, in technology in a variety of 

areas. 

Recently, two unemployed fellows in my home town of Portland 

started a technology company, ‘‘Urban Airship,’’ and they are doing 

pioneering work with new mobile apps. And they have got people 

all over the country interested in their mobile applications. So, 

these jobs can pay good wages, and turn folks into entrepreneurs. 

And I will close with this, Mr. Chairman. A study by the Department of Labor found that self-employment participants were 19 

times more likely than eligible non-participants to be self-employed 

at some point after being unemployed. And even more importantly, 

they were four times more likely to obtain employment of any kind, 

any kind whatsoever. And the average cost of these jobs was 

$3,350. 

So, we can continue to go back and forth, Democrats and Republicans, punching on each other about the idea of job creation that 

costs many, many times that level, or we can find a way, in a bipartisan fashion, to do it. What we have done in this legislation is 

put in what I think are realistic limits. A state can only give about 

one percent of its UI recipients the opportunity to take part in selfemployment assistance with a limitation of the number of weeks of 

benefits. 


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And I just appreciate the tone that you are setting, Mr. Chairman and Congressman Doggett has worked, through your joint bipartisan work on the child welfare bill that was signed recently. 

And let me break the speechifying off here, and just know that 

I would be very much interested in being part of this bipartisan approach you all are trying to cultivate. 

[The prepared statement of Senator Wyden follows:] 


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Chairman DAVIS. Thank you, Senator Wyden. Much of what you 

mentioned fits the spirit of legislation that we worked on back in 

the spring regarding issues like this. And we will look forward to 

continuing that dialogue. Thank you very much. 

Congressmen Renacci and Clarke. 

STATEMENT OF THE HONORABLE JAMES B. RENACCI, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Mr. RENACCI. Good morning, Mr. Chairman, Mr. Doggett, and 

Members of the Subcommittee. I would like to thank you for 

hosting today’s hearing on moving from unemployment checks to 

paychecks, and for inviting me to testify. It is my hope that today’s 

hearing will provide the subcommittee with actionable information 

for getting our nations’ unemployed back to work. 

The dire unemployment situation currently gripping the United 

States has been an inescapable reality for several years. Unemployment data for the month of August showed zero jobs added and a 

sustained unemployment rate of over nine percent. The next report 

on job creation—or, unfortunately, the lack thereof—is due on October 7th. But there is little reason for optimism. 

However, the tools we need to overcome the economic downturn 

are already at our disposal, the most valuable of which is unemployment insurance. Significant employment opportunities can be 

created by allowing the states to leverage unemployment insurance 

into job creation. There is no silver bullet to returning America 

back to work. But creating an incentive for both employers and job 

seekers through unemployment insurance is an important first 

step. 

I have introduced a bill with bipartisan support entitled, ‘‘Employ Act,’’ H.R. 2137, that would create this dual incentive. The unemployment benefit to the business—the Employ Act would allow 

states to develop an optional program for providing a percentage of 

the unemployment benefit to a business willing to hire an individual at a rate higher than the normal benefit amount. 

The purpose of this program is simple: provide businesses with 

an incentive to hire through reduced risk, provide individuals with 

an incentive to work through increased pay, and reduce cost to the 

government by paying only a percentage of the unemployment benefit to the eligible businesses. As stated, the Employ Act is not a 

panacea for the joblessness crisis the United States is currently 

facing. But it is a crucial step in the right direction. 

I again thank the subcommittee for inviting me to testify here 

today, and I look forward to answering any questions you may 

have. I also look forward to hearing the ideas presented by my colleagues here today. 

[The prepared statement of Mr. Renacci follows:] 


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Chairman DAVIS. Congressman Clarke. 

STATEMENT OF THE HONORABLE HANSEN CLARKE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. CLARKE. Chairman Davis, Ranking Member Doggett, subcommittee members, my name is Hansen Clarke. I represent the 

metropolitan region in this country that has lost more jobs than 

any region over the last years: metropolitan Detroit. 

People in metro Detroit, they need work. They are desperate for 

work. This Employ Act would provide the people that I represent 

a chance to get on-the-job training, but also an opportunity to get 

a job long-term. This is important, and I am going to be brief. 

When you put folks in metro Detroit back to work, even though our 

area has been so hard hit, economically, we have the best manufacturing know-how still. We have got a great trained workforce. 

When you put our folks in Detroit back to work, you put this country back to work. We can create more new advanced manufacturing 

jobs. 

But I am not here just talking to you today as a Member of Congress representing Michigan’s 13th District. I also want to share 

with you my experience during the last great recession that we had 

here in this country, during the 1980s. I was a young man in my 

early twenties. I had already lost my family, they had died by the 

time I was 19. I had no brothers and sisters. I had dropped out of 

college, I had been out for years. And I lost my income. I lost my 

food stamps, and then I gave up completely. I knew that there was 

no way I was going to be able to make it in life. 

This is the tremendous tragedy right now with folks who are unemployed. I know that feeling. I can see it in their eyes. People in 

Detroit are tough, but they have given up. They don’t think that 

they have a chance any more. This Employ Act gives people some 

confidence in themselves by putting them back to work, putting 

them in a work situation where they can work with a team, they 

can see that—the value that they have to a company, to themselves, and to this country. 

The other reason why I wanted to be here today, I wanted to 

show this Congress and to show this country that a Republican like 

Jim, a Democrat like me, that we can work together, and we are 

committed to put our people back to work. This bill is not perfect, 

but nothing in this country is. But it is a clear statement: Here is 

a way that we can provide an incentive for employers to hire people 

who need money, but also need faith, faith in themselves and faith 

in what this country is all about, giving everyone an equal 

chance—not a guarantee, but a chance to pursue happiness, to actually live your life as fully as you can. 

So, I really appreciate you giving us this opportunity. I want to 

let, again, this country know Democrats and Republicans are willing to work together to put you back to work. That is why Jim and 

I are here today. Thank you so much. 

Chairman DAVIS. Thank you very much, Congressman Clarke. 

We appreciate your sentiments. 

Does anybody have any questions for our colleagues on the 

panel? 

[No response.] 


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Chairman DAVIS. I would like to thank Senator Wyden and 

Congressmen Renacci and Clarke for joining us today, sharing your 

insights. The one thing I also would like to do is extend the invitation to continue to work with all of you. We look forward to this 

dialogue as we move forward, and thank you very much. 

That concludes our first panel. And for our second panel we will 

be hearing from the Honorable Jane Oates, Assistant Secretary of 

the Employment and Training Administration, U.S. Department of 

Labor. 

Welcome, Secretary Oates, for another appearance before the 

subcommittee. You can go ahead and proceed with your testimony. 

STATEMENT OF JANE OATES, ASSISTANT SECRETARY, EMPLOYMENT AND TRAINING ADMINISTRATION, U.S. DEPARTMENT OF LABOR 

Ms. OATES. Good morning, Chairman Davis, Ranking Member 

Doggett, other Members of the Committee. Thanks for this opportunity to begin the discussion on the President’s American Jobs 

Act. 

The act draws on bipartisan ideas and proposes innovative 

changes to the unemployment insurance, the UI program. It gives 

states flexibility to implement innovative voluntary approaches to 

get long-term unemployed workers back to work and boost job creation, while also providing UI benefits to the long-term unemployed 

who continue to face challenges finding jobs. 

I know you all agree that getting people back to work is essential 

to our sustained recovery and our nation’s economic strength. The 

UI reforms in the American Jobs Act are packaged to ensure unemployed workers have the benefits they need while searching for 

work, but also ensures that they have the necessary services and 

opportunities to get re-employed. 

The proposal couples a further extension of emergency unemployment compensation with full federal funding of the extended benefit program for one year, with mandatory re-employment services 

and eligibility assessments for EUC claimants, and state flexibility 

to implement a menu of innovative re-employment strategies that 

would provide claimants with additional options, if they chose to 

pursue them. 

The President’s proposal will, by the end of 2012, prevent 6 million Americans from losing access to the benefits they need to sustain their families while they look for work. We know that without 

these life-sustaining benefits this past year, 3.2 million people 

would have slipped into poverty. 

At the same time, an extension of emergency unemployment benefits for a year bolsters consumer spending, which, in turn, fuels 

local economies by returning $2 in economic growth for every $1 in 

benefits paid. We know that the longer an individual is unemployed, the less likely that individual is to successfully return to 

work, because their skills get rusty and they face the stigma of 

being long-term unemployed. 

The President is asking Congress to extend EUC and full federal 

funding for EB through the end of 2012. At the same time, the act 

promotes rapid re-employment by requiring states to provide reemployment services, and UI eligibility assessments similar to the 


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re-employment and eligibility assessment initiative that 40 states 

currently operate. They would now provide this to all EUC recipients. 

States will provide these services in tandem, and we know this 

strategy works. Research shows that a combination of RES and 

REA activities reduces UI duration and saves trust fund dollars, 

because claimants find jobs faster and ineligible claimants are 

identified, thus reducing improper payments. 

In addition to these important re-employment services, the 

American Jobs Act proposes the Re-Employment Now initiative, 

which provides $4 billion to states through a formula, and gives 

states the flexibility to implement something from the menu of optional re-employment services, including state-developed models, 

while joining DoL in an evaluation of the models to inform future 

UI reforms. 

All of these options directly benefit long-term unemployed workers. The Bridge to Work program builds on and improves on programs such as Georgia Works, and will permit EUC recipients to 

voluntarily engage in temporary work for up to 38 hours a week 

for up to 8 weeks, while continuing to receive their EUC benefits. 

Total benefits in every state must be at least equal to the minimum wage in that state. 

Key worker protections are mandatory for both the EUC recipient and for employees at the participating employer. Bridge to 

Work is a win-win for both the EUC recipient and the employer, 

and we think it promotes job creation and hiring. 

Wage insurance will provide an incentive for older EUC recipients 50 and above to return to the labor market by taking a job 

that pays less than what they were making in their last job. Participants could be paid up to 50 percent of the difference in wages 

between the two jobs during a period of time determined by the 

state. 

Other initiatives in my oral testimony, as my time is running 

out, we can discuss during questioning. But I do want to end by 

saying that we think the American Jobs Act is a comprehensive 

package and the President is urging Congress to enact it in its entirety, including, for example, the additional re-employment strategies that are pathways back to work that will be considered by 

other committees. 

I really hope this is the beginning of our discussion. I hope we 

can reach some common ground on this, and really hope we can get 

to something quickly. 

Thank you, Mr. Chairman. 

[The prepared statement of Ms. Oates follows:] 


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Chairman DAVIS. Thank you very much, Ms. Oates. I will go 

ahead with the first question. 

According to the Administration’s most recent projections in the 

fiscal year 2012 mid-session review released in September, to 

quote, ‘‘The unemployment rate is projected to fall, but it is not 

projected to fall below 6.0 percent until 2016.’’ For reference, in 

2008, our national unemployment rate hit a low of 4.9 percent. 

Now, the Administration also projects that at this time next year 

the national unemployment rate will still be at 8.2 percent, which 

is, I think we would agree, unacceptably high. Yet, when we look 

at the proposals before us from the President, they generally propose help for the long-term unemployed through the end of 2012. 

Now the question. Does this mean that if we pass the proposed 

tenth extension of UI benefits now, that a year from now will you 

be back asking for an eleventh extension of federal UI benefits, and 

another infusion of one-time short-term stimulus funds to ‘‘create 

jobs’’? 

Ms. OATES. Mr. Chairman, I think that is a fair question, but 

I don’t have a crystal ball, with great respect. I think our hopes are 

that the proposals that we are putting forward here will reduce the 

number of people continuing into long-term unemployment, will accelerate people getting back to work, particularly when you look at 

the re-employment services that we are asking for, and the assessments. 

We think that a number of people in your state and in every 

state across the country have been put out of work in a sector 

where there are no longer jobs for them. So we are hoping that 

these initiatives that we are proposing—and we will work with you 

on trying to enact many, all, or some of them—we think it will 

change the direction of people. 

We certainly think that something like the Recovery Act, while 

some people say it wasn’t effective—I mean we can certainly look 

at things like the state sustainability funds, which eliminated the 

need to lay off workers in 2009 and 2010 from states and municipal 

areas, and the resurgence of the auto industry. Likewise, I think 

this proposal will have real benefits. Do I think it is perfect? No, 

sir. I wouldn’t say that to you. But I think together we can make 

it even better than it is now, and I look forward to working with 

you on that. 

Chairman DAVIS. Okay. Well, we have a mutual concern. There 

are a couple of generations of statistical data that would suggest 

that when people pass that two-year mark being unemployed, that 

it is very rare that they re-employ. And the question that we have 

tried to deal with over the course of this year is looking at ways 

to encourage working—especially with states, empowering frontline service providers—to get them to work as quickly as possible, 

so there is not a lag time that moves them away from the workforce. 

Regardless of the issues surrounding that and the unique issues 

that Senator Wyden commented on—I certainly think he brought 

up some very creative ideas. We had a discussion on creative ideas 

that was very well received by the states that were a little bit different from this. 


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But I guess a final question would be why doesn’t your proposal 

include permanent reforms to the UI program, so that we always 

do a better job helping the recipients to work from the first week 

of collecting benefits, instead of engaging largely after they have 

been unemployed for six months? 

Ms. OATES. Well, I think, Mr. Chairman, you and I have had 

discussions about the fact that there is a real need to work with 

this Committee and the other chamber to look at long-term UI reform. Some of the things that we would like to do, in terms of solvency and improper payments, we are initiating as much as we can 

without statutory change. 

But I think that what we are hoping is—— 

Chairman DAVIS. Just to intercede, had we gotten our JOBS Act 

passed, you would have had the statutory authority to deal with 

the data exchange and issues there. Go ahead. 

Ms. OATES. We appreciate that. But we want you to know that 

we are hoping that some of the ideas that we are proposing in this 

act, they contain an element that has been missing when states try 

to do this ad hoc on their own, and that is a strong evaluation 

piece. We are committed to you—to evaluating anything that you 

give us the permission to do, so that a year from now, if you are 

choosing to look at long-term underlying UI reform, we will have 

real data, not anecdotal, not guesses, not political spin. We will 

have data to share with you about what the promising ideas were 

that really did make a difference in getting people back to work. 

Chairman DAVIS. Okay, thank you very much. I yield now five 

minutes to the gentleman from Texas, the distinguished ranking 

member, Mr. Doggett. 

Mr. DOGGETT. I thank the gentleman and the Secretary for her 

service. 

With reference to the JOBS Act, my recollection is that the bill, 

though strongly urged in Committee and strongly opposed by me 

and others in Committee, was never brought by the House leadership to the House floor so that anything could be done on it. I am 

thankful that it wasn’t, because I think the unemployed need the 

assistance more in my state than Governor Perry needs their 

money to pay off state bonds. 

But to focus, Madam Secretary, on your testimony, what do you 

believe the economic impact will be if we allow two million people 

to begin losing their Federal unemployment insurance benefits in 

February, and a total of six million to lose their benefits, as you 

have testified, over the course of the next year? 

Ms. OATES. Congressman, I think one word would sum it up. It 

would be ‘‘catastrophic.’’ We would not only be pushing people into 

much more expensive safety net programs, but many of them 

would be entering programs like long-term disability that would be 

a mortgage that our country would have for decades to come. 

I think that the American people want to go to work. But when 

pushed to the wall, they are going to do what they have to do to 

support themselves, to keep a roof over their head and their families’. 

So I think that we have already seen a disturbing growth in 

long-term unemployment numbers. And I think that unless we give 

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selves, they are going to find another way to do it. I mean I do believe that we can reform our programs, but job creation is what we 

have to be about. There are 16 million unemployed people today, 

almost another 7 million working part-time that would like to work 

full-time. And by the best estimates, there is a little bit over three 

million jobs. That math doesn’t add up. 

So, I really hope that, you know, we don’t look at that—we don’t 

deny 6 million people in 2012 their benefits. 

Mr. DOGGETT. And, really, if you look back over the decades 

through Republican administrations and Democratic administrations, when we have hit unemployment levels that are as high as 

they are today, have there usually been bipartisan efforts to extend 

unemployment benefits under that circumstance? 

Ms. OATES. Yes, sir. Looking at the history, the last time unemployment—long-term federally-supported unemployment benefits 

were eliminated [sic], the unemployment rate was about 7.2 percent. There has never been a time in history when Congress has 

not included extensions when the unemployment rate was at nine 

percent. 

Mr. DOGGETT. And I know, as I said in my opening statement, 

there are those who want to blame the unemployed for unemployment. But aren’t we in a circumstance today where there are more 

than four unemployed Americans available for every job opening? 

Ms. OATES. Yes, sir. And that is the national average. In some 

areas, even those areas represented on this committee, that number has doubled. 

Mr. DOGGETT. And in that circumstance, what will be the effect 

if the effort last week by Republicans on the House Appropriations 

Committee to slash the Workforce Investment Act by 75 percent— 

almost eliminate it—what will the effect be on employment services, on job training, and opportunities for those unemployed individuals to find the work that they want? 

Ms. OATES. Well, I would love to give you a direct answer to 

that, sir. But clearly, the way the bill is written with changing program year to fiscal year in some parts of the bill and not others, 

make it almost impossible to give you an accurate answer. But at 

the minimum, it would cut our services at least by 50 percent, and 

perhaps up to 90 percent in some programs. 

What would that mean in Texas? It would probably mean that 

Larry Temple, your director of workforce programs, would probably 

have to close 80 percent of the one-stops. 

Mr. DOGGETT. That—— 

Ms. OATES. Eighty percent. 

Mr. DOGGETT. That doesn’t seem to me to be a very creative 

way to address this problem. 

I do have some concerns about the Bridge to Work model that 

copies Georgia Works. I like the sound and theory of the program. 

But at least one analysis I have seen shows that after a couple of 

months of providing employers free work, only about 10 percent of 

those workers find permanent employment. Is that the record? 

And is there anything you do in the Bridge to Work proposal to 

try to ensure that we get better worker placement after providing 

weeks of free labor? 


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Ms. OATES. First of all, the Georgia Works program and the 

other programs in Missouri and North Carolina, in New Hampshire, don’t use UI money. So therefore, we don’t have a lot of accurate data on them. What we can tell you in studies that we have 

done, that people who do active work search actually have done 

twice as well in getting placed in jobs. 

So, when we proposed this as an option—because we fully recognize that some people are sending out hundreds of resumes and not 

getting one interview—we hear that desperation whenever Secretary Solis and I travel individually or together—we think that 

some people really would like a chance to show what they have, 

what their worth is to an employer. 

So, in addition to giving them this opportunity, we would first exhaust the resources of the Wagner-Peyser system and the employment service system by making sure they get an accurate assessment, they get face-to-face attention from someone so that they 

know that they are doing—they are getting the best, in terms of 

workforce—work search information. 

I think that by beefing up the basics, the work search, the job 

counseling, the labor market information, and adding other options, 

we are responding to good ideas from around the country. So I 

think the pairing of them may give us the best options. 

Mr. DOGGETT. Thank you. 

Chairman DAVIS. Great. Thank you very much. The gentleman’s 

time has expired. The chair recognizes Mr. Paulsen from Minnesota 

for five minutes. 

Mr. PAULSEN. Thank you. 

Ms. OATES. Good morning. 

Mr. PAULSEN. And, Madam Secretary, thanks for being here 

this morning. And, first of all, thanks for your comments at the end 

of your testimony, just saying that this is, from your view, the beginning of a discussion and wanting to work to find common 

ground on some significant challenges before us. And I think, as 

the chairman had mentioned, some proposals had already passed 

out of this subcommittee or out of the Ways and Means Committee. 

So my understanding now is that the President’s latest plan now 

that is before us—and some of the folks in the administration, by 

the way, are saying, ‘‘Look, you need to vote on this plan as it is, 

there is not room for modifications,’’ that is why I really appreciate 

your comments here today—but this is the latest plan now that essentially will extend UI benefits for the tenth time for up to 99 

weeks, for 1 more year, it will cost about $44 billion, and there is 

another $10 billion or so in some other sort of one-time stimuluslike programs that would also go into the deficit. 

But I want to go back to some of the testimony that was received 

back in March from the inspector general at the Department of 

Labor. And at that time the testimony was centered around reporting an 11.2 percent improper payment rate for unemployment insurance benefits. And that represents about $16.5 billion in overpayments, about $936 million in underpayments. And I think one 

of the issues that the inspector general rose was that the unemployment improper payment reduction plan did not include specific 

targets for preventing these improper payments, or details on how 


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to meet certain targets, both for the Department of Labor and for 

the states. 

And they also mentioned, ‘‘As we previously recommended, the 

Department and states must identify these strategies to maximize 

opportunities here, especially maximizing the use of the national 

directory.’’ And I guess just in summary, so knowing that $17 billion in 

overpayments or improper payments have been made, which is a 

record high, and the inspector general has essentially come out and 

said, ‘‘Look, the Department of Labor and the states have not identified the strategies that are necessary to target these improper 

payments,’’ and now we are being asked to sort of move forward 

another $50 billion or so on unemployment benefits and services, 

at this 11.2 percent error rate, does that mean we’re going to have 

another $5 billion that is going to be spent improperly? I mean is 

the math correct? 

Ms. OATES. Well, all your numbers are correct, Congressman. 

Let me tell you that we have a very aggressive plan with the states 

to try to work on this number quickly. 

It is very difficult to do anything quickly in the UI system because of the data lag time. But I think we have given you some 

materials, and we are happy to give you more about what we are 

doing. 

Number one, we have set targets now with the states. Each state 

has an inter-agency team, because in the variety of states there are 

a variety of people who touch UI, whether through re-employment 

or direct benefit services. We have brought the 11 largest states together to work in a cohort, not because their rates are the worst, 

but because their numbers are so large that they can help us drive 

the number down. 

We have put a new website up so that there is complete transparency about both the number and the dollar amount that each 

state is paying in improper payments. We have given states $191 

million in money that we have cobbled together, so that they can 

advance their use of the program or their use of the national database of new hires. 

We have identified for each state in a pie chart that I think we 

provided to each of you what their root causes were, so that they 

could work with us on getting down the root causes, whether it is 

separation issues, where employers aren’t timely in their—getting 

back to the state about the reason for separation, or whether it is 

someone continuing to collect after they have gotten a job. 

I think we have put together—and lastly, we have actually identified 6 states that have rates over 10 percent, and are giving them 

targeted technical assistance to get their rates down. 

This is a partnership program with the states, and in—you are 

going to hear from a state director on the next panel, and I know 

she will be able to make this case much more accurately than I. 

But I don’t think any of us really understand what the unemployment numbers have done to state workforce people. I mean 

they have been inundated with requests. And I would venture that 

every state has shifted people from the kinds of integrity issues 

that we all care about and they care about into making sure people 

get their check in a timely manner. I hope that, as the rates come 


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down a little bit in states, they will be able to shift those employees 

back to integrity issues. 

Mr. PAULSEN. Yes. Well, and thank you for that. And I know 

Congress, obviously, is looking to save and make sure that every 

amount of waste, fraud, and abuse is not there. 

And what suggestion would you have to make sure that we, as 

Congress, is making sure the Department and the administration 

and the states are held accountable for making sure we are not 

going to have an 11 percent improper payment rate? Because that 

is a huge amount of money that is going out the door. 

Ms. OATES. Absolutely. It is unacceptable, Congressman. And I 

would say to you for the length of my time that I have in the future 

in this office, hold my feet to the fire. You know, call me up to your 

office, get your staff on the phone. We will have quarterly results. 

And if we are not showing progress, you need to help me and give 

me more ideas. 

We have put together a plan that has literally taxed my UI staff 

in the national office and the regional offices, and they are enthusiastically embracing the extra workload. But I am open to new 

ideas, ideas that you might have. You may have things from your 

state and your state administrator—you know we work very closely 

with the states, there is not an administrator that I don’t know 

personally—and we work closely with NASWA. We have no pride 

of authorship on what we have done. We are willing to try these 

out. If this doesn’t get us where we are, if we need to add new 

measures, please be open and tell us. 

So we look forward to working with you on this. I do not want 

to leave this position with the improper payment rate where it is 

now. I would like it well below 10 percent. 

Chairman DAVIS. Thank you. The gentleman’s time has expired. 

Mr. Berg is recognized for five minutes. 

Mr. BERG. Thank you, Mr. Chairman. Thank you, Secretary. 

Ms. OATES. Good morning. 

Mr. BERG. I—you know, maybe I am looking at this very simply, 

but one of my frustrations is this is the tenth time we have extended this, all right? And since the major stimulus package, nothing has changed. 

I mean you talk about this money going in the economy and 

stimulating spending, but we really haven’t seen that happen. We 

are still at nine percent. The economy is bleak. I mean I agree that 

it is about jobs. But I also am concerned that we don’t have anything innovative, anything that is changing. We are just doing the 

same thing. 

And so, you mentioned earlier that there is 16 million unemployed people. 

Ms. OATES. Yes, sir. 

Mr. BERG. And there is about three million jobs. I guess my first 

question is it seems to me that we ought to be doing everything we 

can in this program to fill those three million jobs with the people 

that are unemployed. That should be our number one focus. 

My other frustration—and this is just kind of the big picture— 

is everything is temporary. This temporary nature does not provide 

the security and the stability that people need, either those that 

are unemployed, or that our economy needs. 


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And, you know, obviously I have said this several times in our 

state is, you know, we are at 3.5 percent in North Dakota. We 

didn’t have a jobs bill in North Dakota, and we understand there 

that government doesn’t create jobs, the private sector creates jobs. 

And so we need to create an environment that encourages that to 

happen. And we need to create a system here that recognizes that 

and works with that private sector to encourage hiring and to fill 

those jobs and fill that capacity. 

I mean there is a couple stories today in the press back home 

that are really disheartening, people that have lost their businesses 

in other states that have come to North Dakota, living in trailers, 

trying to pull things together, and there is a lot of optimism in 

those people. But the sad thing is this dead economy, they are 

never going to be able to recover from that. They have lost their 

businesses, they have lost their homes, and they are starting over 

at 60 years old. 

And so, again, this whole thing—I think we need to get back to 

the focus of trying to create those jobs. And I am a strong believer 

that these solutions are not going to come from us in Washington. 

These solutions are going to come from the states. 

And so, one of the core things that I want to talk to you about 

is we have a federal waiver, if I understand it correctly, at the federal point. But we don’t have the waiver at the state. And so the— 

you know, I guess maybe if you could, just explain to me the federal waiver process that we have. 

Ms. OATES. Well, under the unemployment insurance program 

we have no waiver authority. Under the Workforce Investment Act, 

which is the subject of another committee, we have more liberal 

waiver authority in many areas, and North Dakota is a recipient 

of many of those waivers under the Workforce Investment Act program. 

But you know, we do not—you haven’t given us statutory authority to waive anything in the unemployment insurance program. 

Mr. BERG. Is that something that has been asked for in the 

President’s bill? 

Ms. OATES. No. 

Mr. BERG. Would that—— 

Ms. OATES. We haven’t done, really, anything to the underlying 

Unemployment Insurance laws in this bill. As you say, these are 

temporary programs. 

But I think while your state has the blessing of great natural resources, it has done, really, a lot of things right. I mean you were 

able to come back from Mother Nature’s natural disasters and 

floods this year in a much stronger way than anybody—than many 

of your other neighboring states were able to do so quickly. So, you 

are doing a lot of things right. 

But one of the things the President’s bill does, sir, is recognize 

the fact that we don’t know everything in Washington, and it gives 

states a menu of options so that they can figure out whether wage 

insurance is right for them, whether, you know, self-employment 

assistance, that program is right for them, or whether they just 

want to build up their REA and RES programs. 

So, I think we are on the same page there. We may have differences in other areas, but I think we definitely agree with you 


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that states know better about how to build their own local economy, how to respond to their employers, and we give them a menu 

of options. 

Mr. BERG. I understand the rhetoric, but I don’t see the action. 

And so I guess I would just challenge you to, as we are looking at 

this, and as we are debating this, that we look for those areas of 

waivers and flexibility within UI, both at the federal level and the 

state, to kind of move that forward. 

Ms. OATES. Happy to work with you on that, sir. I am not a 

rhetoric person, I am an action person. Thank you. 

Mr. BERG. Thank you. I yield back. 

Chairman DAVIS. Thank you. The chair recognizes Mr. Crowley 

for five minutes. 

Mr. CROWLEY. Thank you, Madam. Thank you Mr. Chair—— 

Ms. OATES. Good morning. 

Mr. CROWLEY [continuing]. And thank you, Madam Secretary. 

Rhetoric has its place, so—— 

Ms. OATES. You must have been a preacher in a former life. 

Mr. CROWLEY. Boy, I wish we all were North Dakota, I wish 

we all had a 3.5 percent unemployment rate. And unfortunately, in 

New York, it is, as Mr. Reed knows, it is at eight percent, if not 

higher. And so I appreciate my colleague’s remarks, but also note 

that other states are even at higher levels than New York, in terms 

of unemployment. In fact, we feel kind of lucky that we are only 

at eight percent when we look at other states. 

The—what I would remind my colleagues is that this portion, the 

UI benefit extension, is part of—part and parcel of—the President’s 

overall jobs creator, jobs bill creating jobs. And I say it is a part 

of it. It is not a small part, and not an insignificant part. 

People who receive unemployment, Madam Secretary, they have 

to be engaged in trying to find employment. Is that not correct? 

Ms. OATES. That is correct, sir. That is the work search piece 

of every state law. 

Mr. CROWLEY. So these folks aren’t sitting home and just collecting a check. They have to be out looking for work, looking for 

a job. Right? 

Ms. OATES. That is correct. 

Mr. CROWLEY. The most a person in New York State can receive is $405 per week. Now, just a little calculating, that is $1,620 

per month. 

Now, we have gotten, I think, past the folks who were steered 

into improper mortgages. Most of those mortgages have been 

worked out. But now you are really delving into folks who have 

been, unfortunately, at—not due to their own malfeasance, but now 

find themselves chronically out of work. For many people half a 

year, for others a full year, a year-and-a-half. Is that not true? 

Ms. OATES. Actually, 46 percent of all the unemployed have 

been unemployed more than 26 weeks. 

Mr. CROWLEY. Now, I am just going to look at a mortgage not 

that one would have today, I’m just going—a homeowner. Someone 

who may have, a number of years ago, had a 5.8 percent mortgage 

rate, which was reasonable not even 10 years ago, 30-year fixed 

mortgage, it comes to about $2,100 per month, just to pay the 

mortgage. Now, at $1,620 per month in New York—and that is for 


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a $350,000 home, which, just to clarify for folks, when my father 

was a New York City detective in 1964, the home that he purchased in Woodside, Queens, was for $24,250, 3 bedroom, 1 bath. 

Today the City of New York says that house, for tax purposes, is 

worth over a half-a-million dollars. That’s on a detective salary, 

New York City police officer’s salary. Now, I am even coming down from that. $350,000, they are already into this house now for about 10 years. They have been paying $2,100 a month for 10 years. Now they don’t have a job, they 

are out of work. These are hard-working folks who were working 

all their lives, continue—they want to be—they want to play by the 

rules. They have played by the rules. They are continually looking 

for work, and they can’t find it. And they are barely holding on to 

their home if they are getting that $1,620, not to mention food, not 

to mention gas, not to mention possibly tuition, not to mention any 

extra-curricular activities for their children, utilities. Is that not 

correct? 

Ms. OATES. Absolutely, sir. 

Mr. CROWLEY. So, the giveaway of $1,620 per month barely, if 

they are lucky, can keep them in their home. Is that not correct? 

Ms. OATES. That is correct. And don’t forget, sir, they pay taxes on that $1,600. 

Mr. CROWLEY. Pay taxes on that. So—— 

Ms. OATES. So they don’t get the whole thing. 

Mr. CROWLEY [continuing]. One more last point. These folks 

are actively out looking for work. Is that—as we said before, correct? 

Ms. OATES. In order to be eligible, yes, sir. They have to—— 

Mr. CROWLEY. They are not really—they can’t be down on Wall 

Street protesting, can they? 

Ms. OATES. I don’t think so, sir. 

Mr. CROWLEY. No. So—— 

Ms. OATES. I don’t think they have the money to take the 

Metro. 

Mr. CROWLEY. So what I would suggest to all my colleagues, 

they are not down on Wall Street, protesting, or anywhere in this 

country protesting, because they are too busy out looking for work. 

Deny them unemployment insurance, deny them that, maybe 

deny their ability to keep their home and pay for their kids to grow 

up properly, you are going to find them—these are not just a rabble 

who are down at Wall Street, these are not just professional 

protestors. You take unemployment away, and see what happens. 

That is not a threat, it is just a reality, that people lose all hope. 

And I would just suggest that. 

The Hoover Dam, the Triborough—now the Robert F. Kennedy 

Bridge, the interstate highway system was built, not by private industry—they may have built it, but contracted out with the assistance of government. 

And a great portion of what the President is talking about is not 

just unemployment—this is part of it—but he is talking about investment in infrastructure, he is talking about helping create employment so that we can help people help themselves and keep 

their homes. And I would just remind all my colleagues of that 

point, and I yield back. Thank you. 


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Chairman DAVIS. The gentleman’s time has expired. Mr. Reed 

from New York is recognized for five minutes. 

Mr. REED. Thank you, Chairman. Madam Secretary, I appreciate you being here today. 

I just wanted to follow up on a piece of your testimony that you 

gave to Mr. Doggett. You said that cutting off unemployment insurance would lead to catastrophic situation. 

Ms. OATES. Yes, sir. 

Mr. REED. And in that response you said that the people that 

would be denied benefits would move to long-term disability status. 

What do you mean? Why would they be going to long-term disability status? 

Ms. OATES. Well, sir, if you look—and I would be happy to get 

the numbers for your staff—if you look at the increase to people 

who are considered long-term disabled, permanently disabled, the 

number has almost doubled during the recession. And I think—— 

Mr. REED. Is that because there is more disability out there, or 

they are just applying for whatever benefits, even though they may 

not be entitled to them? 

I don’t see a growing populous of disabled Americans in my district or around the country. And yet you are telling me, from your 

perspective, what people are going to do is move to disability status. 

Ms. OATES. Well, it is—— 

Mr. REED. Has their disability status changed, physically? 

Ms. OATES. If I might, sir—— 

Mr. REED. Yes. 

Ms. OATES [continuing]. I would propose—and I would certainly 

be open to what you have seen in your population—I think many 

people work 40 hours a week who could be claimed as long-term 

disabled because of long-term illnesses, because of permanent disabilities that they have, but they are able to work. But if they can’t 

find a job, and they can’t feed themselves and their families, what 

other option do they have? 

Mr. REED. Well, and that—see, and that is what I am trying to 

get to, your mind set. Because when I go back to my district and 

I talk to my farmers and I talk to folks, they say, ‘‘We can’t find 

people to come work.’’ Yet in some of these counties we are at 9 

percent, 10 percent unemployment. 

Why do you believe that people will choose to do inappropriate 

things in order to put a roof over their heads, as opposed to, in my 

opinion, do what is right, and maybe go to work on a farm or in 

an under-employed status in order to get off the unemployment 

roll? Why do you automatically assume that they are going to move 

to long-term disability, when they are not disabled, as your testimony suggests to me? Why do you assume that, from the administrative—— 

Ms. OATES. I didn’t—I don’t think I am assuming that they are 

doing anything inappropriate. I said that there are people who 

have disabilities, but have chosen to work. And in a place where 

they can’t find work, what other option do they have? 

In terms of farm work and temporary seasonal work, I think we 

have done a much better job working with states to advertise those 


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jobs. Quite frankly, I don’t think people knew that those jobs existed. They didn’t know what they were—— 

Mr. REED. We would love to work with you to publicize that, so 

we definitely will reach out to you. 

Ms. OATES. Absolutely. 

Mr. REED. I really want to focus—my heart of my questioning 

this morning is I am greatly concerned how we are paying for all 

this. Because when I went back—and this is a whole new area for 

me, okay, so bear with me, maybe I am misunderstanding the program, but in New York State the loans that were advanced to the 

state came due, and the governor had no choice but to put a surcharge on the employees. And as I went back to my district in August, I think it was $27 per employee. And a lot of my small business owners were saying, ‘‘Tom, I am in dire straits.’’ 

I ran four small businesses. When you impact a business on an 

unforseen bill that impacts cash flow to the extent that some of 

these small business owners were receiving because they got a letter from the state saying that they owed this surcharge on their 

employee to pay back the loans that were advanced to the state, 

that is crippling them. They literally told me to my face that they 

were choosing between paying this bill for their unemployment surcharge or investing and hiring new people. 

So how do you reconcile—how are we going to pay for this without having the negative impact of the costs that come with it? Because it has to be paid for. I mean this is real money. And so how 

do you say we are helping job creation by extending unemployment 

benefits, when at the same time the bill for that is hurting the 

small business owners that are ultimately going to have to pick up 

the tab that hopefully will put the people back to work? Do you understand my concern? 

Ms. OATES. I have to apologize, Congressman. I don’t really understand what the surcharge is that the state is—and I will go 

back and learn more about—— 

Mr. REED. It is the interest-free loans that came due after two 

years that was advanced to the state because of the extended unemployment period of time. 

Ms. OATES. Actually, you know, 36 states borrowed. 

Mr. REED. Yes. We are one of them. 

Ms. OATES. You are one of them. That is right. In fact, over the 

course of the time that we have been doing the loans, 16 states are 

continuing to borrow as of September. 

So, what they—the reason they have to pay the interest back is 

so that they don’t have to raise their FUTA tax. 

Mr. REED. Yes. 

Ms. OATES. They don’t lose the credit on that. So it could be 

that what New York did is put on a surcharge so they didn’t raise 

the tax. 

Mr. REED. That is exactly what they did. That is exactly my understanding. But the small business owners are the ones that have 

to pay that, because—just can’t print the money. They have to go 

back to the business owners that are creating—that have to pay 

the bill, that are trying to create the jobs to get people off the unemployment rolls. It just doesn’t make sense to me, why we are 

doing this. 


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Chairman DAVIS. Thank you, the—— 

Ms. OATES. Well, the other option would be a permanent increase to their FUTA tax, and I think, you know, we could work 

with your staff to figure out what the numbers were, and work 

with Albany to figure it out so I understand it better. I apologize 

that I am not as clear with what—why they are doing a surtax—— 

Mr. REED. So you would agree raising the FUTA tax would not 

be conducive to job creation. 

Ms. OATES. Oh, absolutely. 

Chairman DAVIS. The gentleman’s time has expired. 

Mr. REED. Thank you, Chairman. 

Chairman DAVIS. But perhaps you could answer his question in 

writing and I will submit it—— 

Ms. OATES. Absolutely, through the chair. Yes, sir. 

Chairman DAVIS. Thank you. The chair recognizes Mr. 

McDermott for five minutes. 

Mr. MCDERMOTT. Thank you, Mr. Chairman. Reading the history of unemployment creation in 1935 and the Unemployment 

Act—or the Social Security Act in 1935, the last issue that was argued on the last day in the Senate was, ‘‘Is there some kind of 

moral degenerative element to giving people unemployment insurance? They will somehow get a weak soul, and they will stay in 

their chair and wait for their unemployment check.’’ The Republican Party has never believed unemployment insurance was good. 

Now, I would like you to explain—my colleague can’t seem to get 

the picture—I want you to explain—— 

Mr. REED. Would the gentleman yield for just one second? 

Mr. MCDERMOTT. Yes. 

Mr. REED. I would just like to remind the gentleman that he 

and I sponsored two of the extensions together for unemployment, 

based on your last remark. I yield back. 

Mr. MCDERMOTT. I understand. I would like you to explain to 

the committee the term counter-cyclical, the idea that you put 

money into the fund when things are good, so that when things are 

bad you have money to draw out. And what happens to states who, 

when things are good, say, ‘‘Well, let’s drop the tax because we 

don’t need the money, look, we’ve got all this money in the pot,’’ 

and then they wind up having to borrow. 

Ms. OATES. Congressman, you are exactly right. I mean the— 

some states were just hit extraordinarily hard. And no matter what 

they would have done, states like Michigan probably would have 

been hit, no matter what. But the vast majority of the states, unlike your home state of Washington, did lower business taxes, you 

know, without thinking about what would happen, and let their 

trust funds get disproportionately low. 

I think that is the concern that the Department of Labor has 

with funding any of these innovations with trust fund money. We 

think trust fund money should be sacrosanct. It should be held 

there for the future, and not used to fund novel ideas. That is why 

we think the President is right in asking for additional money to 

fund these innovations that we would do as voluntary options 

under UI. 

Mr. MCDERMOTT. The thing that I would like you to also talk 

about is the National Bureau of Economic Research has recently 


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done a study on this question about the moral degeneracy that 

comes from unemployment insurance. What is their conclusions of 

that report that were just released? 

Ms. OATES. Yes. They basically find it is completely unfounded 

in research. There is nothing to say that there is anything about 

unemployment insurance that depresses people’s desire to work, or 

anxiousness to work. 

Mr. MCDERMOTT. And the plan—the Georgia Works plan, how 

did that work? Did it—was it successful? 

Ms. OATES. Well, actually, Congressman, as I said before you 

got here, they didn’t use our money, so we don’t have a lot of good 

data on it. They used other state money. And quite frankly, right 

now they are running out of money, and the program is kind of dissolving. 

In terms of successful, looking at their outcomes in Georgia 

against regular outcomes using just regular Wagner-Peyser services, they did get about—a third of their people did find jobs. But 

if you just used Wagner-Peyser services, twice as many people got 

jobs. 

Mr. MCDERMOTT. And today what is the number of people looking for jobs, as compared to the number of jobs available? 

Ms. OATES. Sixteen million full-time unemployed, and another 

six to seven million who are working part-time who are looking for 

full employment, and about three million jobs available. 

Mr. MCDERMOTT. So you are talking 22 million people looking 

for 3 million jobs? 

Ms. OATES. That is correct. 

Mr. MCDERMOTT. So, even in the best of circumstances, there 

are going to be a lot of people who are going to be in the situation 

that Mr. Crowley was describing. 

Ms. OATES. Especially if they are in urban areas or rural areas, 

they are mostly high-impact areas. 

Mr. MCDERMOTT. Now, this is a little out of your neighborhood, 

but if you are an unemployed worker, and you have reached 99 

weeks, you have got nothing left. 

Ms. OATES. That is correct. 

Mr. MCDERMOTT. And you have lost your health care benefits. 

What are you entitled to, as an American in this society, besides 

food stamps? 

Ms. OATES. Food stamps, possibly you could go to the housing 

authority and get a housing voucher, but there is a long line in 

most areas for that. And the charity of your faith-based or community-based organization. 

Mr. MCDERMOTT. So we are basically saying to the middle 

class that have been unemployed for how many weeks, you said? 

What is the percentage? 

Ms. OATES. Forty-four percent have been unemployed more 

than twenty-six weeks. 

Mr. MCDERMOTT. So you now have no more unemployment 

benefits, and you are middle class yesterday, and today you are 

with food stamps. 

Ms. OATES. Correct. And kids in college with student debt, and 

kids going to K–12 school that need books and supplies. Absolutely, 

sir. 


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Chairman DAVIS. Thank you. The gentleman’s time has expired. 

The chair would like to recognize Mr. Boustany from Louisiana for 

five minutes. 

Mr. BOUSTANY. Thank you, Mr. Chairman. Welcome. Good to 

see you. 

I have some concerns about the static nature of the statistics 

that the gentleman from Washington laid out. And I think the job 

market is much more dynamic than what the statistics would lay 

out. 

But, you know, in thinking about the purpose of unemployment 

benefits, clearly they are designed to provide financial support 

while an individual looks for another job. That is really the purpose. And none of us on this side of the aisle will deny the importance of the program for those who find themselves stuck in a situation—I mean we have all supported the extension of this program, 

I know we have worked with our chairman to do this. 

But consistent with the purpose of the benefit, should there be 

a requirement that UI recipients must search for work every week, 

with only very few limited exceptions, perhaps for those expected 

to return to a former job? I mean is that—— 

Ms. OATES. Congressman, each state law is slightly different. 

But every state law has a requirement for work search. 

Mr. BOUSTANY. Well, I know there is a requirement in the federal extended benefits program. That is correct, right? 

Ms. OATES. We follow state law with that. Yes, sir. 

Mr. BOUSTANY. Right, right, right. And—but with regard to the 

state UI program which pays benefits when people first become 

employed, I mean is there a requirement? 

Ms. OATES. Yes, sir. Every state law has a requirement on their 

initial benefits, as well. 

Mr. BOUSTANY. Could you provide us where in statutes 

that—— 

Ms. OATES. In each state law, sir? 

Mr. BOUSTANY [continuing]. Is the case? Because I am—I don’t 

think that is the case. 

Ms. OATES. Well, we work closely with Louisiana and Commissioner Isen. We know what the work search is in Louisiana. So we 

can provide you that state law. I am happy to provide whatever it 

is to other committee members. 

But it is a requirement for active beneficiaries to work—to search 

for work. In some states the requirement has a numerical, so you 

have to have at least three evidences of looking for work. In some 

states it is as small as one evidence. In many of them you do it 

electronically. In some states you do it by returning a card. And in 

some states, you still, at certain points, have to come in and, face 

to face, meet with a—— 

Mr. BOUSTANY. Because bottom line is we need to make sure 

the program is working. I know someone earlier asked the question 

about overpayments. And, you know, being chairman of the Oversight Subcommittee on Ways and Means, I am concerned about 

making sure these programs are working to the best that we can 

assure, you know, within the law that they are. 

And I am very concerned that the work requirement issue is 

something we need to probably take a closer look at to make sure 


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that, you know, this is really the case. Because I mean I have 

heard a lot of anecdotal evidence back home, talking to employers, 

where someone will call and ask, ‘‘Do you have any job openings?’’ 

And they will say, ‘‘Well, yes, why don’t you come in, send a resume, come visit with us,’’ and they will say, ‘‘Oh, no, I just had 

to do this because it meets the requirement under the unemployment insurance benefit.’’ 

And I want to make sure that we are doing what we can to make 

sure that this program is working, that the intent of providing a 

bridge to getting people back into the workforce is what is really 

happening. And, I mean, shouldn’t the work requirement be at 

least as strong in week 1 as it is in, you know, week 99? 

I mean there should be an incentive all the way through this 

process to get people to really do the job of getting out there and 

looking for work. Because there are jobs. I mean I think we have 

got a dynamic labor market, even with high unemployment and all 

the problems. I talk to employers all the time who are struggling 

to find workers. 

In my state, in Louisiana, we have got a lot of folks, a lot of businesses related to agriculture, farmers. Mr. Reed was mentioning 

this earlier. We have got seafood processing plants. They are looking for jobs [sic]. They are coming to me and saying, ‘‘Can you do 

something about the H2B visa program? We need more workers.’’ 

And yet we have got, you know, high unemployment of Americans 

here in this country. 

There is a disconnect, and somehow we have got to get to the 

bottom of it. And I think at the heart of this could be understanding what steps we need to take to do the best we can with 

this work requirement. And I would like your comments. 

Ms. OATES. Well, you know, this is a balance. As I said, we do 

this program in collaboration with the states. And I think all of us 

have a great respect for the states’ critical role in this program. 

So, rather than going in and saying, you know, we are going to 

overrule state law on work search, what this proposal has done is 

mandated for anybody getting EUC, when you decide to extend it, 

what—we will mandate both the re-employment assessment and 

the re-employment services. That gets to the same thing as work 

search. It means that, face to face, somebody has got to come in, 

not just handing in a card, not just mailing something in. They 

have got to talk to somebody, they have got to understand why it 

is important to take a job when it is offered, because we don’t know 

what the future is going to deliver. 

So, I think if we talked about this, Congressman, we would probably agree that, right now, the best role we could take is to make 

sure that we are really mandating the RES and the REA. And, in 

the future, in terms of what this committee and the Senate would 

choose to do in underlying UI law, if you wanted to look at creating 

some kind of national standard for a work search requirement, I 

think we would be willing to provide you technical assistance on 

that, and work with NASWA. 

Chairman DAVIS. Great, thank you very much. The—— 

Mr. BOUSTANY. We may need to look at that. Thank you. 

Chairman DAVIS. Thank you. The gentleman’s time has expired. 

Secretary Oates, thank you very much for joining us today. 


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Ms. OATES. Thank you. Thank you so much, Chairman. 

Chairman DAVIS. We look forward to a continued dialogue. And 

that will conclude our second panel. If Members have additional 

questions, they will submit them to you in writing, and we would 

appreciate your responses for the record. This concludes the second 

panel. Thank you. 

[Pause.] 

Chairman DAVIS. For our third panel we are going to be hearing 

from Maren Daley, Executive Director of Job Service North Dakota; 

Dawn Deane, an unemployed person from Philadelphia; Don 

Peitersen, Director of Unemployment Insurance/Workforce Project 

at the American Institute for Full Employment; and Chris McConnell, workforce consultant with AlliedBarton Security Services. 

Before we go to—one special introduction. I would like to make 

a statement. We have been informed from the whip’s office there 

is going to be a very long series of votes that is going to go in the 

next 15 to 20 minutes. I think we are going to have about 20 to 

25 minutes before we go. I would rather not having you all standing in limbo for 90 minutes, while the floor process works itself out. 

Because of this, if we have time for questions we will begin questions. But what I would like to ask your indulgence is if our Members—and I know several will have questions, including me—if we 

could submit those to you in writing, and those could be responded 

to in writing, and we will make sure that they are part of the permanent record on this. And I appreciate very much your time coming in to deal with this very critical issue. So thank you. 

With that, before we proceed with testimony, I would like to recognize Mr. Berg to introduce his colleague from his home state. 

Mr. BERG. Well, thank you, Mr. Chairman. I would like to introduce Maren Daley, who is our first witness here on this panel. And 

she is executive director of Job Service for unemployment in North 

Dakota. It is a cabinet-level department. She administers these 

programs. In fact, we worked together a long time—for the last 20 

years—and so I am just excited to have her here. 

And kind of again, my hope is that we will pull some of these 

ideas at the state level that are working at the state level, and try 

and create a federal program that creates incentives for the right 

kind of things to get people back to long-term work. So thank you, 

Mr. Chairman. 

Chairman DAVIS. Thank you very much. Ms. Daley, you can 

proceed with your testimony. 

STATEMENT OF MAREN L. DALEY, EXECUTIVE DIRECTOR, JOB 

SERVICE NORTH DAKOTA 

Ms. DALEY. Thank you. Chairman Davis and Ranking Member 

Doggett and Members of the Subcommittee on Human Resources, 

thank you for the opportunity to testify on the President’s proposals to help the long-term unemployed. 

As Congressman Berg introduced me, I am Maren Daley with 

Job Service North Dakota, the state workforce agency that administers the unemployment insurance, labor exchange, and labor market information services. 

The Workforce Investment Act, Wagner-Peyser, and unemployment insurance programs are fully integrated within Job Service’s 


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one-step career centers. This seamless delivery system improves 

the transition of UI claimants to re-employment. 

A basic principle embraced by all states is rapid, effective re-employment of unemployed workers is critical to the economic wellbeing of individuals, families, and employers which, in turn, support the local and national economies. 

I am encouraged to see a variety of options included in the President’s proposal, but I encourage even more flexibility in this realm. 

By allowing maximum flexibility, states are able to implement 

strategy specific to the needs of their state, ultimately providing for 

faster economic progress with a more efficient use of tight resources. 

North Dakota’s low unemployment continued job and wage 

growth among many other factors make North Dakota unique. 

However, they do not shield us completely from re-employment 

struggles. While we have thousands of good jobs available, the skill 

sets of the worker base and, in many cases, the location of these 

individuals, do not always correspond with the available jobs. 

Examples of our re-employment successes are readily available, 

and I would like to outline one of the more successful cost-effective 

approaches we have taken. I should note that this program could 

not have been undertaken without federal funding resources. And 

this is the type of situation in which the President’s proposal and 

each state’s intimate knowledge of the workforce needs of their own 

state can converge. 

There is strong competition for jobs available in North Dakota. 

And one of our primary goals is to help UI claimants be competitive contenders for these jobs. To this end, we have had excellent 

results in the past with our re-employment eligibility assessment 

program. REA focuses on individual case management services, 

and creates an environment of coaching and support for discouraged unemployed workers. 

Springboarding off the success of the REA program, we developed 

a series of workshops focused on intensive re-employment activities 

and focused individual activities. These workshops were funded by 

Wagner-Peyser RES dollars through the American Recovery and 

Reinvestment Act. The workshops were four days long, and required a major time commitment from UI claimants. 

The workshops consisted of one day devoted to basic computer 

skills training and three days addressing skills identification, exploration of jobs to which the claimant’s skills would be 

transferrable, effective job searches, writing good resumes and 

cover letters, and interviewing. All participants completed the 

workshop with an updated resume, a new understanding of how 

their skills could be transferred to another position, and with the 

confidence gained through a practice interview exercise. 

We have solid statistics proving the success of the workshops. 

The statistics showed a significant reduction in the time that the 

workshop participants spent on unemployment, compared to the 

overall UI claimant duration in North Dakota. During the same period, the average claimant duration was 11.28 weeks. While this 

number is good compared to the rest of the country, the individuals 

that attended the workshops returned to work, full-time work, in 


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7.32 weeks, on average. This is an improvement of almost four 

weeks, and this represents significant savings to the UI trust fund. 

Many things have been tried on a national basis. Some of them 

have been successful, and some of them not. In North Dakota, our 

UI claimants have greatly appreciated the availability of EUC benefits. These benefits have been a game-changer for some. However, 

it could be argued a large portion of the EUC benefits paid in 

North Dakota could have been more effectively spent on focused reemployment efforts. 

Typically, under federally-funded extended benefit programs, a 

minimum work search requirement exists. However, the 2008 EUC 

program does not require this, and instead provides that state law 

and policy regarding work search requirements be followed. 

In North Dakota we have a large seasonal workforce that faces 

temporary lay-offs over the winter, particularly in the construction 

industry. Because of this, our UI laws and policies are different 

than that would be seen in many other states. What this has led 

to is 24.75 million, or 43 percent of the extended benefits paid in 

North Dakota have gone to eligible UI claimants who will be returning to employment after a temporary lay-off. In essence, these 

individuals have not faced a change in their normal employment 

status. 

I have submitted my written testimony. Mr. Chairman, I see my 

time is up. And I would invite you to check out the written testimony—— 

Chairman DAVIS. Yes. 

Ms. DALEY [continuing]. For a unique cost-effective, simplified 

work-share program that North Dakota has used. Thank you. 

[The prepared statement of Ms. Daley follows:] 


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Chairman DAVIS. We appreciate your insights, especially the 

written testimony. It was quite illuminating. And thanks for your 

hard work up there. 

Now the chair recognizes Ms. Deane for her remarks. 

STATEMENT OF DAWN DEANE, UNEMPLOYED WORKER FROM 

PHILADELPHIA, PENNSYLVANIA 

Ms. DEANE. Chairman Davis, Ranking Member Doggett, and 

distinguished Members of the Subcommittee, thank you for inviting 

me here today. My name is Dawn Deane, I am a resident of Philadelphia, Pennsylvania. 

Since June of this year, and like so many others these days, I 

am unemployed through no fault of my own, and supporting myself 

and my nine-year-old daughter on unemployment insurance. Too 

often these days, unemployed Americans like me are reduced to either statistics or stereotypes. We don’t have names and faces. We 

are either 1 of 14 million who are out of work, or we are lazy people, happy to sit home collecting unemployment, rather than actively looking for jobs. 

But I am not just a statistic, and I am not lazy. For the past 20 

years, I have worked in the field of human resources, and I have 

held my 3 previous jobs for 7, 8, and 31⁄2 years. In spite of all my 

hard work, right now I am unemployed. Thankfully, I am able to 

receive unemployment insurance benefits, which are what is sustaining me and my daughter, while I diligently look for new work. 

As a human resources professional, I am very aware of how to 

diligently and strategically search for a new job. And I am doing 

just that. Like tens of millions of other Americans each day, I engage in a thorough and multi-faceted search for employment. And 

I have been doing so since I lost my job in June. 

I have registered my resume with all of the major websites, and 

I have applied for approximately 40 jobs so far. In addition, I have 

attended four different career fairs since being laid off. And 

through them I have applied for about 50 additional jobs. I have 

yet to hear from a single employer from any of these applications. 

I also understand the importance of networking, so I have 

reached out to all of my friends and former colleagues, asking for 

their assistance in finding a new job. I have gone to my local onestop career center to look for open jobs. I have visited and/or contacted the offices of city council and state representatives to see if 

they have any resources for their constituents who are searching 

for jobs. 

I am not only applying for jobs in my field, I am looking more 

widely for all sorts of administrative jobs, just because I want to 

work and support my daughter and myself. 

Because I know that I am not the only one in this situation, and 

because I have skills to offer others who are struggling with unemployment, I also volunteer at a local community center and church, 

helping others with their job searches. 

Finally, I am auditing a course at Villanova University that will 

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Right now I thank God for unemployment insurance, because it 

is allowing me to keep up with my mortgage and provide the bare 

necessities of food and transportation. I lived well within my means 

when I was working. But even our modest lifestyle is a challenge 

now. I could not afford to keep up with health insurance right now. 

My daughter and I have no coverage, which is very frightening. 

I am working with a housing counselor to see if I can restructure 

my mortgage and lower the monthly payments. I have applied for 

a subsidy to pay my monthly gas bill and electric bills. I have had 

to stop my daughter’s extra-curricular activities, like dance class, 

which she loved, and was not able to buy many back-to-school supplies or clothes for her. And I am looking for other ways to continue 

to scale back on our expenses, even though I have already eliminated everything that isn’t strictly necessary already. 

Until I find new work, unemployment insurance is our necessary 

source of income. My state benefits began in June, and will end in 

December. And while I hope that I have a new job before the end 

of the year, the absolute lack of any success I have had so far really 

worries me. 

Thus, while I do not want to have to receive federal unemployment insurance benefits, with the unemployment rate so high right 

now I just don’t see how Congress can even think about letting 

these important programs expire. If they do, my daughter and I 

and millions of other families like us might have no safety net, no 

life line in the new year. Quite simply, reauthorizing these important federal unemployment insurance programs is simply the single most important thing for this Congress to do right now, along 

with making some real efforts to create good jobs for millions like 

me, who just want to work. 

Thank you for your time today. 

[The prepared statement of Ms. Deane follows:] 


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Chairman DAVIS. Thank you very much, Ms. Deane. 

Mr. Peitersen. 

STATEMENT OF DON PEITERSEN, DIRECTOR OF UNEMPLOYMENT/WORKFORCE PROJECT, AMERICAN INSTITUTE FOR 

FULL EMPLOYMENT 

Mr. PEITERSEN. Chairman Davis, Ranking Member Doggett, 

and Members of the Committee, thank you for this opportunity to 

testify. The American Institute for Full Employment is a non-profit 

think tank. We consult with states and specialize in wage subsidy 

designs similar to the Bridge to Work program. We applaud the 

Obama Administration and the Republican leadership for their bipartisan interest in turning an unemployment support into an employment support. 

This testimony addresses two pieces of the legislation, the Bridge 

to Work and state flexibility. Briefly, we think Bridge to Work has 

great promise, but should be modified as follows: eliminate the employer mandate; simplify it by letting employers pay the full wage; 

increase the subsidy from 8 to 13 weeks; let states help claimants 

earlier than 6 months; give states flexibility, but require return on 

investment; extend Bridge to Work to the regular UI program. 

Half of our regular UI claimants go jobless for nearly 6 months, 

and three quarters of our emergency benefits claimants went jobless for another 10 months, even though we spent $50 billion in 

emergency benefits alone in the last year trying to help them get 

back on their feet. 

EUC wages claims averaged over $9,000, a wage subsidy costs under $4,000. The math is both obvious and compelling. We have 

studied UI’s specific wage subsidy programs, plus Georgia Works. 

First was Oregon’s Jobs Plus program, operated for more than a 

decade. The program helped over 10,000 claimants. Over 80 percent of the participants landed jobs and saw an average wage gain 

of over 15 percent. Georgia Works is an employer-based training 

program that has been replicated in a handful of states. Claimants 

keep their benefit check while volunteering with an employer for 

up to 8 weeks, for a minimum of 24 hours per week. Over 10,000 

job seekers have participated. 

Texas Back to Work, launched in 2010, has received the U.S. 

DoL’s innovation award for its program design. It is a subsidy of 

$2,000 over 16 weeks. It has served over 20,000 claimants and over 

3,000 employers. Sixty-three percent of the job seekers have been 

successfully placed. Earnings retention was 99.4 percent. And the 

program has been replicated in Utah and Nevada. These wage subsidy programs succeed because they provide real training in a real 

job, allow job seekers to gain a foot in the door. They are cost neutral or cost savers, and are economic development programs. Over 

80 percent of the employers said it helped with cost capacity and/ 

or expansion. 

Based on our research in these programs, we offer four recommendations for Bridge to Work. 

One, employers have repeatedly told us that simplicity makes or 

breaks a program. Bridge to Work has an employer mandate that 

none of the four state UI initiatives includes. It requires employers 

to hire claimants within 24 weeks of program participation. But 


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the core of any wage subsidy program is to encourage employers to 

take a chance on a job seeker that they would not otherwise hire. 

Our experience suggests that abuse is rare. We recommend eliminate the employer mandate to hire, and give states the flexibility 

to design program safeguards based on their own state needs. 

Two, increase state flexibility to allow the wage subsidy to be up 

to 13 weeks, to match the 90-day probationary period used by 

many employers. This allows participants to learn higher-skilled 

jobs, and it gives state staff more flexibility to match workers with 

opportunities. 

Three, eliminate the complication of two payers for the worker by 

paying the subsidy directly to the employer, and requiring the employer to give the worker a paycheck like any other new worker. 

Four, the net cost of a wage subsidy program can determine 

whether it becomes a legacy or a loser. Timing of placement with 

the employer is key. The earlier the placement, the more weeks of 

benefits that can be saved. Unfortunately, the earliest Bridge to 

Work would start is about six months after a claimant lost their 

job, because that’s when EUC begins. Early placement also helps 

claimants avoid costly unemployment spells that drain their savings. We recommend you allow states to offer Bridge to Work to 

claimants earlier than six months. 

The Jobs Act includes two other provisions allowing states innovative program authority. We support state program flexibility, and 

recommend that when proposals are vetted, that return on investment is a requirement. 

We also would allow—ask you to allow states to use regular benefits to fund a Bridge to Work program for their regular UI claimants with the improvements noted here. 

We estimate that a modified Bridge to Work initiative can provide opportunities to 300,000 to 400,000 long-term UI claimants 

each year and, in doing so, save the Federal Government over $1.5 

billion and states $270 million a year. It is important not to miss 

the enormity of the opportunity we have here. Thank you. 

[The prepared statement of Mr. Peitersen follows:] 


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Chairman DAVIS. Thank you very much, Mr. Peitersen. 

Mr. McConnell. 

STATEMENT OF CHRIS MCCONNELL, WORKFORCE 

CONSULTANT, ALLIEDBARTON SECURITY SERVICES 

Mr. MCCONNELL. Thank you for the opportunity to testify 

today. I would like to offer some observations from a private sector 

employer’s experience working with many local workforce agencies 

to recruit folks on UI and other federal benefits. 

I provide general consulting services and project management to 

public, private, and non-profit clients in the area of housing, 

human services, and workforce development. For the past four 

years, AlliedBarton Security Services has been one of my clients. 

AlliedBarton has over 50,000 employees, and 100 offices located 

across the United States. As such, AlliedBarton is a significant 

entry level employer in scores of local labor markets. 

We recruit almost exclusively for security officers. These are fulltime jobs with benefits, including health care after 90 days. We 

also promote from within, and can provide a clear career ladder 

from security officer to supervisory and management positions. My 

role with AlliedBarton is to help them make links with local workforce agencies, and identify policies and programs that help us recruit good staff and, whenever possible, defray the costs of recruitment, staff training, and wages. 

In light of our experience in this realm, I would like to share just 

a couple of thoughts on our interaction at the local level over the 

past four years. 

Short-term funding windows can be very problematic to administer down on the ground. And in this respect, I would ask you to 

be mindful of how difficult the process can be for getting funds 

from here through the state capitals and down to the counties and 

cities. 

Two weeks ago I was in a meeting just outside of Detroit, and 

they wanted us to hire 20 people in 10 days, because one of their 

on-the-job training budgets for displaced workers on UI would be 

up at the end of the month. We would have loved to, and we will 

eventually hire those folks. But it might take us a couple of months 

or more, depending upon what our recruitment flow is like. 

Another issue is how certain funding streams are only allowed to 

be applied to certain groups of people, like those with a longer duration on UI. As an employer, we need to see the people that best 

fit our job opportunities, regardless of when they might have lost 

a job, or what their benefit status might be. So it is frustrating for 

all of us down on the ground when a local job developer has to tell 

my recruiter that, ‘‘No, we can’t get some help with the training 

costs on these folks, because they have only been out of work for 

X number of months, as opposed to this other group of folks who 

have been out of work Y number of months.’’ 

Of all the programs we have worked with across the country— 

and we have worked in New York, Pennsylvania, Ohio, Michigan, 

Texas, Illinois, and many, many others, wage subsidy is the best 

one that we found. Incentives like wage subsidy do exactly what 

they are meant to do. They give an employer a reason to look a little harder at a particular individual. Let me be clear. Like most 


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employers, we have plenty of applicants these days, in some districts as many as 30 for each job opening. So if the federal or local 

government wants us to focus on particular folks, well, these incentives are a good place to start. 

Plus, when we generate revenue from an area of our business 

where we had never expected to generate revenue, this improves 

our bottom line, makes us more competitive, which, in turn, makes 

it easier for us to grow our business and hire more people. Hopefully, via these same programs. 

Wage subsidy programs tend to be cleaner. We hire, we pay our 

employees the rate and duration of the subsidy, as previously established. There is nothing that gets in the way of the employeremployee relationship. And this is key for us, as I would imagine 

it is for many employers. We like hiring people. We want to pay 

them a prevailing wage, train them effectively, and hold them accountable for their work. This is what we do, and we are good at 

it. Wage subsidy respects that relationship like no other program 

available. 

And from a less self-interested perspective, I would maintain 

that another strength of wage subsidy is that it is a post-employment program. The government funding comes through in direct 

relation to the money that the former UI recipient is earning. 

Lastly, I would comment on any program models that you’re 

looking at that keep folks on benefits and also try to put them in 

the workplace. For my client, AlliedBarton, any program like this 

is a no-go proposition. Because, from a legal standpoint, we can’t 

have anybody working or performing job functions that isn’t a direct employee. And I would imagine that we are probably not the 

only employer that would say something like that. 

Thank you very much. 

[The prepared statement of Mr. McConnell follows:] 


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Chairman DAVIS. Thank you very much, Mr. McConnell. You 

may have heard the buzzer several minutes ago during Mr. 

Peitersen’s testimony. That signals the beginning of this very long 

vote series. Rather than hold you hostage for about 90 minutes, I 

think what we are going to do—as I mentioned, the possibility at 

the beginning of your testimony—we will be submitting questions 

to you for the record. We would appreciate a response back in writing. 

I look forward to a continued dialogue on this critical issue. 

Ranking Member Doggett and I are both personally committed to 

finding creative ways to address both the inefficiencies and the 

process problems within the government space, and ways to help 

folks find a path back to work very quickly. 

And I appreciate your testimony today, your time invested in 

this. This will be an ongoing dialogue. And again, thank you very 

much. 

This concludes the hearing today. 

[Whereupon, at 10:35 a.m., the subcommittee was adjourned.] 

[Questions for the Record follow:] 


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[Submissions for the Record follow:] 


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Aaron Benjamin, Statement 


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American 99ers Union, Statement 


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TrueBlue, Statement 


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Æ 


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