IAWP LEGISLATIVE INFORMATION February 2008 Archives Home Page ***Weekly Update*** From Legislative Committee Chair: Todd Kolden, Aberdeen Central Office Week of February 4, 2008 HOUSE-SENATE ECONOMIC STIMULUS BILLS DIFFER ON UNEMPLOYMENT EXTENSION • The House of Representatives overwhelming approved an economic stimulus package by a vote of 385-35. The $150 billion dollar plan would provide tax rebates of $600 to $1,200 to approximately 117 million Americans and tax breaks to business. • House Speaker Nancy Pelosi (D-CA) and Minority Leader John Boehner (R-OH) hoped the House and Senate could pass identical bills, but it appears increasingly likely that the Senate will approve a bill next week that makes changes to the House passed bill, including an extension of unemployment insurance benefits. • The Senate bill, which was reported out by the Senate Finance Committee and is headed to a vote by the full Senate, would make 13 weeks of additional unemployment insurance benefits available to those who have exhausted their "regular" benefits. In addition, in those states where unemployment reaches six percent or higher, an additional 13 weeks of UI benefits would be provided. • Once the Senate votes on the stimulus package, congressional leaders in the House and Senate will convene a conference committee to reconcile the differences between the two bills. House and Senate leaders hope to move quickly to reach consensus and send a bill to the President by February 15, 2008. JANUARY JOBLESS RATE UNCHANGED • On January 25, the Bureau of Labor Statistics (BLS) reported the unemployment rate in January was unchanged at 4.9 percent. The number of initial claims for unemployment benefits rose by 69,000. This brought the total number of initial claims to 379,000. • The Federal Reserve, for a second time in a week, cut interest rate aggressively in an attempt to lower the odds that the economy will fall into a recession or at least to mitigate one. Last week, the Federal Reserve cut the federal funds rate by three quarters of a percentage point. PRESIDENT BUSH CALLS FOR TAA REAUTHORIZATION IN FINAL STATE OF THE UNION ADDRESS • President Bush, during his State of the Union address, encouraged Congress to update the Trade Adjustment Assistance (TAA) program, which provides training and benefits to workers who lose their jobs because of adverse effects of imports. • Although the House passed a TAA bill on October 31, (H.R. 3920) the Administration issued a veto threat because the House-passed bill expanded benefits and broadened of eligibility for workers impacted by trade; incorporated an incentive via a $7 billion distribution of Reed Act funds for states to expand eligibility for Unemployment Insurance (UI); included a provision requiring companies to give advance notice to employees prior to mass layoffs and plant closings; and designated special resources in job-training centers for TAA recipients. • The Chairman of the Senate Finance Committee, Senator Max Baucus (D-MT), said reauthorizing TAA is "the top trade priority for the committee" and will likely be considered after the Committee completes its work on the economic stimulus package. JOB TRAINING BILL LINKED TO UNEMPLOYMENT • Representative Pete Hoekstra (R-MI) introduced legislation, H.R. 4111, that would give states with high unemployment rates more flexibility in how they use federal job training funds. • The legislation is linked to the Workforce Investment Act of 1998 and the Trade Act of 1974. The language specifies that a state with a high unemployment rate can consolidate or transfer the funds under these acts without any limitations. • Mr. Hoekstra's home state of Michigan currently has the highest unemployment rate in the nation, at 7.6 percent. The legislation was referred to the House Education and Labor Committee and the House Ways and Means Committee. Week of February 19, 2008 FISCAL YEAR 2009 BUDGET RAISES CONCERNS • The Administration's Fiscal Year 2009 budget for the U.S. Department of Labor has raised questions and concerns on funding levels and new policy initiatives. • The reductions would be approximately $1.1 billion dollars or 29 percent of major employment and training programs. • Those programs hardest hit would be the Workforce Investment Act (WIA) programs (WIA Adult, WIA Dislocated, WIA Youth) and the Wagner-Peyser Employment Service Grants to States. • The proposed budget would consolidate the WIA Adult, WIA Dislocated, WIA Youth into a single funding stream to states to provide Career Advancement Accounts (CAAs) to job seekers and employers. • CAAs would be self-directed accounts that would be available to both adults and out-of-school youth entering the workforce or transitioning between jobs, or incumbent workers in need of new skills. States would be required to contribute a 20 percent match of the Federal funds used for CAAs. • The maximum CAA would be $3,000 for one year. According to the Administration, "this [amount] is sufficient to finance approximately one-year's study at a community college." • Employment Service (ES) activities, including Wagner-Peyser Employment Service Grants to States, are slated for elimination. While the Administration, since 2003, has proposed consolidating Employment Service funding with the Workforce Investment Act (WIA) programs, this is the first time they have proposed a zero budget for ES grants.