UI benefits

House Unemployment Benefits Proposal Does Not Provide Any Resources, Just Restrictions

/ The Old Crank

In media coverage of the debate over the UI extension, some reports have highlighted statements made by House Republicans suggesting that their proposal somehow contains “resources” or “tools” of some kind to help those without diplomas or GEDs attain those credentials and get back to work.

This was a point made by Rep. Tom Reed (R-NY) during an exchange with Sen. Jack Reed (D-RI) during a meeting of the House and Senate conferees who are meeting to negotiate a final bill to extend UI benefits for rest of the year. (You can read the entire exchange here, by the way.)

Here is the quote the Press & Sun-Bulletin of Binghamton, New York, pulled from that exchange:

New York Republican Rep. Tom Reed, of Corning, a member of the conference committee working on a final deal on the tax cut and jobless benefits legislation, said he supports requiring that people have a high school diploma or at least begin working on a GED while receiving unemployment benefits.

“We really need to talk about not just giving a check,” Reed said. “We need to give the tools to American folks so they can get back to work.” (my emphasis)

This is similar to the claim made by Rep. Camp when he originally introduced this proposal. The GED/high school diploma requirement, he said, was “a commonsense reform” designed to “get [the unemployed] the training and resources they need to move from an unemployment check to a paycheck.” (my emphasis)

This is nonsense. There is nothing in the House proposal that provides any resources whatsoever for addition training or adult education. All the House proposal does is cut off benefits to those who have been steadily working without GEDs or High School diplomas, until they earn one. There is no additional funding or any other resources being provided to help those workers obtain such a credential. Or ny other training or education opportunity. And, as has been documented elsewhere, there are around 160,000 people people already on waiting lists for adult education services in federally-funded programs alone.

In other words, this is a proposal to yank benefits away from workers who are otherwise qualified to receive them—not an investment in their skills. As I wrote earlier, all this proposal would do, at best, is increase the demand for adult education while providing no new resources for adult education classes, leaving many laid off workers with no way to meet the requirements imposed by the restriction.

Tim Noah: GED/High School Diploma Requirement for UI “Still A Bad Idea”

/ The Old Crank

A colleague pointed out to me this morning that Timothy Noah at the New Republic has been writing about the proposal to ban unemployed workers without a high school diploma or GED from collecting unemployment benefits since the House proposed this idea back in December. Here is an excerpt from his original post on the subject, from December 19th:

The GED requirement, on the other hand, is a new way to communicate that if you lack a job you must be deficient. Now don’t get me wrong. I’m as concerned as the next guy about the fact that the high school graduation rate hasn’t increased in decades. If you don’t have a high school diploma, or a GED, you’re going to have a very difficult time getting a job. But if someone is collecting unemployment who lacks either of these things we know that person managed to get a job in spite of this educational deficit–otherwise he or she wouldn’t be on unemployment. To require this person to enroll in a GED program as a condition of collecting benefits is in essence to say that you had no business being in the labor force to begin with. I can imagine that it might pose all sorts of practical problems simultaneously to start a GED program, look for a job, and jump through all the other hoops you need to to shake your unemployment check free from the state bureaucracy. Wouldn’t it make more sense to focus on getting yourself a job, and then enroll, if circumstances allow, in a GED program?

If you’re employed, have no high school diploma or GED, and aren’t enrolled in a GED program, you don’t get to opt out of the unemployment insurance program. You can’t tell your boss, “Hey, give that money to me, not to the state, because I don’t have a GED and I don’t intend to get one even if I lose my job.” You just pay into the insurance pool just like everyone else… I’m not suggesting that high school dropouts… be given such an opt-out; obviously that would undermine the solvency of the state unemployment insurance fund (which is probably pretty shaky to begin with). What I’m saying is that it’s unfair to impose conditions on drawing from an unemployment insurance fund that don’t exist when you’re paying into it. And it opens the gates wide to imposing all sorts of other petty conditions whose real purpose would be to further stigmatize and humiliate people whose sole offense to society is that they once had a job and then lost it. (my emphasis)

I agreee with the point I highlighted in first paragraph—but I think it’s worse than he describes. The other hoop you’d have to jump through is proving that you are in the right kind of class and that you are making “satisfactory progress” since the House proposal doesn’t define either. (See my post here.)

Here is Noah’s latest on this subject, from February 1st.

Conferees Debate UI Extension Legislation – Lots of Debate Over GED/Diploma Requirement

/ The Old Crank

Senate and House conferees have been meeting this week to resolve their differences on the Social Security payroll tax cut extension, the unemployment insurance (UI) program, Medicare physicians payment fix — and a few other items — in the hopes of coming up with a compromise bill in the next few weeks. House Republicans have been pushing a proposal to deny UI benefits to individuals without a high school diploma unless they are enrolled in classes that will lead to a GED or another “state-recognized equivalent.”

You can watch today’s discussion here, via C-SPAN. A great deal of time was spent today debating the diploma/GED requirement. They are meeting again tomorrow. In the meantime, Sen. Baucus (D-MT) promised House Republicans that the Senate would have an alternative proposal ready in time for tomorrow’s meeting.

Meanwhile, the National Coalition for Literacy, which already issued an action alert on this issue, has now also circulated a letter to conferees (which, in the interest of full disclosure, I should note that I helped write) outlining why the House proposal is unfair and unworkable.

Also, see CLASP’s latest statement on the House proposal here.

More Dangers in House UI Extension Proposal

/ The Old Crank

Last week, the Center on Budget and Policy Priorities (CBPP) issued a new report on a bill that the House passed in December (H.R. 3630) to extend the Social Security payroll tax cut and extend unemployment insurance (UI). One of the provisions in that bill would have denied UI benefits to workers without a high school diploma or GED. Congress eventually passed a two-month payroll tax cut and UI extension bill without any restrictions, but it is expected that Republicans in the House are going to push to include many of the provisions in their bill to be included in any legislation to extend the payroll tax cut and UI through the end of this year.

Adult education advocates have been focused on the GED/High School Diploma requirement in SEC. 2122 of that bill, as noted above. (You can read why this is such a bad idea in an earlier CBPP paper here.) Reading CBPP’s latest paper, it appears to me that the state waiver provisions in that bill should also be of concern to adult education advocates, assuming they are proposed again.

Under SEC. 2123 of H.R. 3630, up to 10 states could apply for waivers that would exempt them from key federal requirements for state UI systems, so that they may conduct “demonstration projects” designed either to “expedite the reemployment of individuals” or “improve the effectiveness of a State in carrying out its State law with respect to reemployment.” Specifically, they could obtain waivers from these critical requirements:

  1. Section 3304(a)(4) of the Internal Revenue Code, which requires that “all money withdrawn from the unemployment fund of the State shall be used solely in the payment of unemployment compensation, exclusive of expenses of administration.”
  2. Paragraph (1) of section 303(a) of the Social Security Act, which requires that state methods of administration to be” reasonably calculated to insure full payment of unemployment compensation when due.”
  3. Paragraph (5) of section 303(a) of the Social Security Act, which, again, requires the expenditure of all money withdrawn from a state unemployment fund to be used in the payment of unemployment compensation, exclusive of expenses of administration.

The CBPP paper offers a strong overall critique of these waiver requirements which I encourage you to read. Here are the two specific areas of concern I see from an adult education policy and advocacy perspective:

First, a waiver of the first requirement above would allow states to collect unemployment taxes from employers and then turn around and use those funds for purposes other than paying out UI benefits. I agree with CBPP that this “would start the UI system down a slippery slope that would alter its fundamental nature.” But I can also imagine demonstration projects funded through these waivers that provide new adult education and job training opportunities. (CBPP suggests that as a possibility in their paper.) Since these programs provide unemployed people with skills that should improve their employment prospects, this might seem like a reasonable idea, especially during good times, when states may have a surplus of UI funds (i.e. low unemployment, so more money is going into the system then is going out in the form of benefits). A new source of funding for adult education and job training is always tantalizing.

But it will be just as tempting for legislators to divert those funds elsewhere. How would they able to do this? As the authors of CBPP’s paper explain, the House proposal would “enable states to replace state or local funds now used for job training or other such purposes with diverted UI funds and then to shift the withdrawn funds to other uses.” CBPP suggests tax cuts, and I think that sounds pretty realistic. In other words, the fear is that states will cut their current expenditures on adult education or job training, replace that money with funds from their Unemployment Trust Fund, and take the money they cut and spend it on whatever they like—including tax cuts. This would result in a zero net gain in adult education or job training resources.

It also seems to me that using UI funds for other purposes might significantly destabilize a state’s UI system. If state Unemployment Trust Fund dollars are allowed to be used in part for other purposes—even good ones—what assurances are there that sufficient funds will be available for benefits when the economy goes into a downturn and UI benefit claims soar? During bad times, with less UI tax revenue coming in, and more workers applying for benefits, will we be facing a “bankrupt” UI system that can’t pay out the benefits that workers have earned? Will states then be more inclined to cut benefit levels and/or reduce the number of weeks one can collect benefits?

My second concern has to do with language in SEC. 2123 that may allow states to impose their own new eligibility requirements. The authors of the CBPP paper argue that by allowing states to waive the requirements described above, states will also, by implication, no longer be bound by the definition of “compensation” in Section 3304 of the Internal Revenue Code. This definition basically restricts states from defining eligibility for UI compensation outside of conditions related to their unemployment. According to CBPP, the waivers would allow states “to condition receipt of benefits on factors unrelated to workers’ having amassed a sufficient work record, having become unemployed due to no fault of their own, and looking for a new job.” (my emphasis) This would open the door for states to impose new eligibility requirements and restrictions of their own—such as requiring UI recipients to have a high school diploma or GED.

In other words, these “demonstration project” waivers contained in the House bill could be a backdoor way for states to impose the same educational eligibility requirements that the House would like to impose at the federal level.

So it seems equally important to argue against these state waiver provisions as well as the GED/High School Diploma requirement contained in SEC. 2122. If SEC. 2122 is stripped from whatever bill emerges, but the waiver language remains, it appears that some states would be able to go move forward with similar eligibility restrictions—or worse.