I 
110TH CONGRESS 
1ST SESSION H. R. 2202 
To amend the Social Security Act to provide for wage insurance for dislocated 
workers. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 8, 2007 
Mr. MCDERMOTT introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Social Security Act to provide for wage 
insurance for dislocated workers. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Worker Empowerment Act’’. 
(b) TABLE OF CONTENTS.—The table of contents is 
as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—REEMPLOYMENT ADJUSTMENT ASSISTANCE 
Sec. 101. Establishment of programs. 
Sec. 102. Administrative costs. 
Sec. 103. Technical assistance. 
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Sec. 104. Reports to Congress. 
Sec. 105. Effective date. 
TITLE II—WAGE INSURANCE CONTRIBUTIONS 
Sec. 201. Wage insurance contributions. 
TITLE I—REEMPLOYMENT 
ADJUSTMENT ASSISTANCE 
SEC. 101. ESTABLISHMENT OF PROGRAMS. 
(a) IN GENERAL.—Section 303 of the Social Security 
Act (42 U.S.C. 503) is amended by adding at the end the 
following: 
‘‘(l)(1) Each State (through the State agency charged 
with the administration of the State law of such State) 
shall, not earlier than January 1, 2009, and not later than 
2 years after the date of the enactment of this subsection, 
implement a reemployment adjustment assistance pro-
gram that provides the benefits described in paragraph 
(2). 
‘‘(2)(A) A State shall use the funds provided to the 
State under section 101(b) of the Worker Empowerment 
Act to pay to an individual described in paragraph (3) the 
amount equal to 50 percent of the amount by which— 
‘‘(i) the wages received by such individual at 
the time of the separation described in paragraph 
(3)(A), as certified by the State in accordance with 
subparagraph (B), exceeds (if at all) 
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‘‘(ii) the wages received by such individual from 
reemployment, as certified by the State in accord-
ance with subparagraph (C). 
‘‘(B) For purposes of subparagraph (A)(i)— 
‘‘(i) the wages received by an individual at the 
time of separation shall be computed based on the 
wages received by such individual for the 52-week 
period ending before the date of separation; and 
‘‘(ii) a certification under subparagraph (A)(i) 
as to the amount of those wages so received shall be 
based on (I) information collected directly from the 
person or persons employing such individual during 
the 52-week period before the date of separation, 
(II) statements of earnings submitted by the indi-
vidual (as provided to such individual by the person 
or persons referred to in subclause (I)), or (III) ap-
plicable wage data collected by the State. 
‘‘(C) For purposes of subparagraph (A)(ii)— 
‘‘(i) the wages received by an individual from 
reemployment— 
‘‘(I) shall be initially certified using wages 
received for the individual’s first full week of re-
employment; and 
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‘‘(II) shall thereafter be periodically recer-
tified, to reflect any changes in wages, not more 
than quarterly; and 
‘‘(ii) a certification under subparagraph (A)(ii) 
as to the amount of wages received from reemploy-
ment shall be based on (I) statements of earnings 
submitted by the individual (as provided by the re-
employing entity) or (II) applicable wage data col-
lected by the State. 
‘‘(D)(i) To the extent that a State makes its certifi-
cations under subparagraph (A)(i) on the basis of infor-
mation obtained pursuant to subparagraph (B)(ii)(I) or 
(II), the State shall regularly conduct random audits 
against relevant information obtained pursuant to sub-
paragraph (B)(ii)(III). 
‘‘(ii) To the extent that a State makes its certifi-
cations under subparagraph (A)(ii) on the basis of infor-
mation obtained pursuant to subparagraph (C)(ii)(I), the 
State shall regularly conduct random audits against rel-
evant information obtained pursuant to subparagraph 
(C)(ii)(II). 
‘‘(E)(i) Notwithstanding any other provision of this 
paragraph— 
‘‘(I) for purposes of computing benefits in the 
case of an individual to whom clause (ii) applies, 
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subparagraph (A) shall be applied by substituting 
the applicable percentage under clause (ii)(II) for 
‘50 percent’; and 
‘‘(II) for purposes of computing benefits in the 
case of an individual to whom clause (iii) applies, 
subparagraph (A) shall be applied by substituting 
the applicable percentage under clause (iii)(II) for 
‘50 percent’. 
‘‘(ii)(I) This clause applies in the case of any indi-
vidual whose weekly wages at the time of separation (de-
termined based on the amount most recently certified with 
respect to such individual under subparagraph (A)(i)) ex-
ceed the contribution and benefit base (as determined 
under section 230 of the Social Security Act) which is ef-
fective with respect to the year which includes the last day 
of the 52-week period on the basis of which weekly wages 
are computed. 
‘‘(II) The applicable percentage under this subclause 
is, with respect to any individual, the percentage obtained 
by subtracting from 50 percent the product of 2.5 times 
the lesser of the percentage by which the individual’s 
weekly wages at the time of separation (as described in 
subclause (I)) exceeds the contribution and benefit base 
(as so described) or 20 percent. 
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‘‘(iii)(I) This clause applies in the case of any indi-
vidual whose weekly wages from reemployment (deter-
mined based on the amount most recently certified with 
respect to such individual under subparagraph (A)(ii)) are 
less than 50 percent of the median of weekly wages within 
the individual’s State (determined in accordance with any 
regulations prescribed by the Secretary of Labor), except 
as provided in subclause (III). 
‘‘(II) The applicable percentage under this subclause 
is, with respect to any individual, the percentage equal to 
the sum of 50 percent plus one-quarter of the number of 
percentage points by which the individual’s weekly wages 
from reemployment (as described in subclause (I) and ex-
pressed as a percentage relative to the median of weekly 
wages within the individual’s State (as so described)) is 
less than 50 percent. 
‘‘(III) This clause shall not apply in the case of any 
individual who is subject to clause (ii). 
‘‘(F) Benefits under any program described in para-
graph (1) shall be payable on at least a monthly basis. 
‘‘(3) An individual shall not be eligible for benefits 
under any program described in paragraph (1) unless such 
individual— 
‘‘(A) is separated from employment with an em-
ployer that employed such individual continuously 
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for at least the 2-year period before the date of sep-
aration either— 
‘‘(i) involuntarily (other than for cause); or 
‘‘(ii) voluntarily under circumstances which 
would, by virtue of the terms of a collective bar-
gaining agreement, satisfy the relevant State 
law requirements relating to the type of separa-
tion from employment that is required in order 
to be eligible for unemployment compensation; 
‘‘(B) is reemployed for substantially the same 
number of hours each pay period as at the time of 
separation; and 
‘‘(C) is not reemployed by the employer from 
which the individual was separated. 
‘‘(4) The benefits described in paragraph (2) shall 
not, in the case of any individual, be payable— 
‘‘(A) by virtue of any separation, beyond the 
date that occurs 2 years after the date of such sepa-
ration; or 
‘‘(B) in an amount exceeding $10,000 for either 
year of the 2-year period that begins on the date of 
such separation. 
‘‘(5) For purposes of this subsection— 
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‘‘(A) the term ‘wages’ means all cash or cash 
equivalent remuneration (as defined by the Secretary 
of Labor) for employment, excluding any tips; 
‘‘(B) the term ‘employment’ means any service 
performed within the United States for an employer 
by an individual who is a citizen of the United 
States or who is authorized to work in the United 
States; and the term ‘United States’, when used in 
this subparagraph in a geographical sense, includes 
the States, the District of Columbia, the Common-
wealth of Puerto Rico, and the Virgin Islands; 
‘‘(C) the term ‘employer’ includes each em-
ployer, as defined by the State law of the State con-
cerned; and 
‘‘(D) the term ‘pay period’, with respect to an 
individual, means a period (of not more than 31 con-
secutive days) for which a payment of remuneration 
is ordinarily made to the individual by the person 
employing such individual. 
‘‘(6) Not later than December 31, 2008, the Sec-
retary of Labor shall by regulation establish guidelines to 
provide for the uniform application of paragraph (3).’’. 
(b) PAYMENTS TO STATES.— 
(1) IN GENERAL.—There shall be paid to each 
State which has a reemployment adjustment assist-
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ance program that (in the judgment of the Secretary 
of Labor) meets the requirements of section 303(l) 
of the Social Security Act, as amended by subsection 
(a), an amount equal to 100 percent of the benefits 
paid to individuals by such State under such pro-
gram. 
(2) 
ESTIMATION, 
FREQUENCY, 
ETC. 
OF 
AMOUNTS
PAYABLE.—Sums payable to any State 
under this subsection shall be payable, either in ad-
vance or by way of reimbursement (as determined by 
the Secretary of Labor), in such amounts as the 
Secretary estimates the State will be entitled to re-
ceive under this subsection for each calendar month, 
reduced or increased, as the case may be, by any 
amount which the Secretary finds that the estimates 
of the Secretary for any prior calendar month were 
greater or less than the amounts which should have 
been paid to the State. Estimates shall be made on 
such basis as the Secretary considers appropriate. 
(3) 
CERTIFICATION
AND
PAYMENT
OF 
AMOUNTS.—The Secretary of Labor shall, from time 
to time, certify to the Secretary of the Treasury the 
sum payable to each State under this subsection. 
The Secretary of the Treasury, prior to audit and 
settlement by the Government Accountability Office, 
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shall make payments to the State in accordance with 
the certification from amounts available in the Wage 
Insurance Trust Fund under section 9511 of the In-
ternal Revenue Code of 1986. 
(4) LIMITATION
ON
USE
OF
AMOUNTS
RE-
CEIVED.—Money paid to a State under this sub-
section may be used solely for the purpose of paying 
benefits described in paragraph (1). Money so paid 
which is not used for such purpose shall be returned, 
at the time specified by the Secretary of Labor, to 
the Treasury of the United States and credited to 
the Wage Insurance Trust Fund. 
(5) STATE
DEFINED.—For purposes of this 
subsection, the term ‘‘State’’ has the meaning given 
such term under section 205 of the Federal-State 
Extended Unemployment Compensation Act of 
1970. 
(6) RULE OF CONSTRUCTION.—Nothing in this 
subsection shall prevent or limit any distribution of 
amounts from the Wage Insurance Trust Fund for 
reasonable costs associated with the implementation 
and operation of reemployment adjustment assist-
ance programs (as described in section 303(l) of the 
Social Security Act) or for any other purpose (other 
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than the payment of benefits) allowable under sec-
tion 9511 of the Internal Revenue Code of 1986. 
(c) CONFORMING AMENDMENT.—Section 303(a) of 
the Social Security Act (42 U.S.C. 503(a)) is amended— 
(1) by striking the period at the end of para-
graph (10) and inserting ‘‘; and’’; and 
(2) by adding at the end the following: 
‘‘(11) A reemployment adjustment assistance 
program that meets the requirements of subsection 
(l).’’. 
SEC. 102. ADMINISTRATIVE COSTS. 
Section 302(a) of the Social Security Act (42 U.S.C. 
502(a)) is amended by striking the period at the end of 
the first sentence and inserting ‘‘and 100 percent of so 
much of the reasonable expenditures of the State as are 
attributable to the costs of the implementation and oper-
ation of its reemploment adjustment assistance program 
(as described in section 303(l)).’’. 
SEC. 103. TECHNICAL ASSISTANCE. 
The Secretary of Labor shall provide technical assist-
ance and advice to assist the States in implementing the 
reemployment adjustment assistance programs required 
under the amendments made by this title. 
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SEC. 104. REPORTS TO CONGRESS. 
(a) INITIAL REPORT.—Not later than 3 years after 
the date of the enactment of this Act, the Secretary of 
Labor shall submit to Congress a report on the operation 
and effectiveness of the reemployment adjustment assist-
ance programs required under the amendments made by 
this title. 
(b) ANNUAL REPORTS.—Not later than 4 years after 
the date of the enactment of this Act, the Secretary of 
Labor shall submit to Congress the first of 5 annual re-
ports. Each such report shall include a detailed analysis 
of the following: 
(1) The average annual income from wages that 
individuals receiving reemployment adjustment as-
sistance from programs under section 303(l) of the 
Social Security Act (hereinafter ‘‘beneficiaries of the 
Worker Empowerment Act’’) earned in the 2 years 
prior to employment dislocation, and the average 
quarterly income of such individuals in the 2 years 
following reemployment. 
(2) The average amount of quarterly benefits 
provided to beneficiaries of the Worker Empower-
ment Act from programs under section 303(l) of the 
Social Security Act, and the average duration of 
those benefits. 
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(3) The average duration of unemployment ex-
perienced by beneficiaries of the Worker Empower-
ment Act before becoming eligible for benefits de-
scribed in paragraph (2). 
(4) Whether beneficiaries of the Worker Em-
powerment Act accepted lower-wage employment 
that they would otherwise have refused (if this Act 
had not been enacted), and whether such employ-
ment would have been refused in the absence of the 
receipt of unemployment compensation. 
(5) To what extent beneficiaries of the Worker 
Empowerment Act displaced lower-skilled workers 
seeking the same job. 
(6) To what extent employers paid lower wages 
than they would otherwise have because of the im-
plementation of the reemployment adjustment assist-
ance programs described in section 303(l) of the So-
cial Security Act. 
SEC. 105. EFFECTIVE DATE. 
Nothing in this title or in any amendment made by 
this title shall be considered to permit or require the pay-
ment of reemployment adjustment assistance benefits— 
(1) based on any separation from employment 
taking effect before January 1, 2009; or 
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(2) to supplement remuneration for employment 
performed in any pay period beginning before the 
commencement date of the program under which 
such benefits would be payable. 
TITLE II—WAGE INSURANCE 
CONTRIBUTIONS 
SEC. 201. WAGE INSURANCE CONTRIBUTIONS. 
(a) IN GENERAL.—Subtitle C of the Internal Rev-
enue Code of 1986 (relating to employment taxes) is 
amended by adding at the end the following new chapter: 
‘‘CHAPTER 26—WAGE INSURANCE 
CONTRIBUTIONS 
‘‘CHAPTER 26—WAGE INSURANCE CONTRIBUTIONS 
‘‘Sec. 3601. Rate of tax. 
‘‘SEC. 3601. RATE OF TAX. 
‘‘(a) IN GENERAL.—In addition to other taxes, there 
is hereby imposed on every employer an excise tax, with 
respect to having individuals in his employ, equal to 0.06 
percent of the wages (as defined in section 3401(a)) paid 
by him with respect to employment. 
‘‘(b) LIMITATION.—The amount of wages taken into 
account under subsection (a) with respect to an employee 
for a calendar year shall not exceed the contribution and 
benefit base (as determined under section 230 of the So-
cial Security Act) which is effective with respect to such 
year. 
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‘‘(c) APPLICABLE RULES.—For purposes of this 
chapter, rules similar to the rules of sections 3122, 3123, 
3125, 3126, and 3127 shall apply.’’. 
(b) ESTABLISHMENT OF WAGE INSURANCE TRUST 
FUND.—Subchapter A of chapter 98 of such Code (relat-
ing to trust fund code) is amended by adding at the end 
the following: 
‘‘SEC. 9511. WAGE INSURANCE TRUST FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund 
to be known as the ‘Wage Insurance Trust Fund’ (re-
ferred to in this section as the ‘Trust Fund’), consisting 
of such amounts as may be appropriated or credited to 
the Trust Fund as provided in this section or section 
9602(b). 
‘‘(b) TRANSFERS TO TRUST FUND.—There is hereby 
appropriated to the Trust Fund an amount equivalent to 
the taxes received in the Treasury under section 3601. 
‘‘(c) DISTRIBUTION OF AMOUNTS IN TRUST FUND.— 
Amounts in the Trust Fund shall be available without fur-
ther appropriation to make expenditures to carry out— 
‘‘(1) section 303(l), and so much of section 
302(a), of the Social Security Act as relates to the 
implementation and operation of the program under 
such section 303(l), and 
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‘‘(2) the Worker Empowerment Act. 
‘‘(d) AUTHORITY TO BORROW.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated to the Trust Fund, as repayable ad-
vances, such sums as may be necessary to carry out 
the purposes of the Trust Fund. 
‘‘(2) LIMITATION ON AGGREGATE ADVANCES.— 
The maximum aggregate amount of repayable ad-
vances to the Trust Fund which is outstanding at 
any one time shall not exceed an amount equal to 
the amount which the Secretary estimates will be 
equal to the sum of the amounts appropriated to the 
Trust Fund under subsection (b) during the fol-
lowing 24 months. 
‘‘(3) REPAYMENT OF ADVANCES.— 
‘‘(A) IN GENERAL.—Advances made to the 
Trust Fund shall be repaid, and interest on 
such advances shall be paid, to the general fund 
of the Treasury when the Secretary determines 
that moneys are available for such purposes in 
the Trust Fund. Any amount transferred as a 
repayment under this subsection shall be cred-
ited against, and shall operate to reduce, any 
balance of advances repayable under this sub-
section. 
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‘‘(B) RATE OF INTEREST.—Interest on ad-
vances made to the Trust Fund shall be— 
‘‘(i) at a rate determined by the Sec-
retary (as of the close of the calendar 
month preceding the month in which the 
advance is made) to be equal to the cur-
rent average market yield on outstanding 
marketable obligations of the United 
States with remaining periods to maturity 
comparable to the anticipated period dur-
ing which the advance will be outstanding, 
and 
‘‘(ii) compounded annually.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 6302(b) of such Code is amended 
by inserting ‘‘26,’’ after ‘‘21,’’. 
(2) Section 6513(c) of such Code is amended by 
striking ‘‘or 24’’ and inserting ‘‘24, or 26’’. 
(3) Section 7507(d) of such Code is amended is 
amended by striking ‘‘chapter 21 or chapter 23’’ and 
inserting ‘‘chapter 21, 23, or 26’’. 
(4) Section 7509 of such Code by adding at the 
end the following new sentence: ‘‘The preceding sen-
tence shall apply with respect to the tax imposed by 
chapter 26 in the same manner as such sentence ap-
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plies to the tax imposed with respect to chapter 
21.’’. 
(d) CLERICAL AMENDMENTS.— 
(1) The table of chapters for subtitle C of such 
Code is amended by adding at the end the following 
new item: 
‘‘CHAPTER 26. WAGE INSURANCE CONTRIBUTIONS.’’. 
(2) CONFORMING AMENDMENT.—The table of 
sections for subchapter A of chapter 98 of such 
Code is amended by adding at the end the following: 
‘‘Sec. 9511. Wage Insurance Trust Fund.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to wages paid after December 31, 
2007. 
Æ 
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