April 01, 2014
Aaron Fobes/Julia Lawless (202) 224-4515
In Speech, Hatch Calls on Senate Democrats to Allow Votes on Job-Creating Amendments
Utah Senator Says, “Growth is what we should be debating– ideas and proposals that would actually grow our economy and help people find jobs.”
WASHINGTON – In a speech on the Senate floor today, Finance Committee Ranking Member Orrin Hatch (R-Utah) outlined his opposition to the Emergency Unemployment Compensation Extension Act and called on Senate Democrats to allow votes on job-creating amendments offered by Republicans to improve the underlying bill.
(Click the image above to watch Hatch’s remarks)
“The plight of the long-term unemployed – which this bill is supposed to address – is not the major problem facing America today. Instead, the major problem is that, despite the best efforts of many of us here in Congress, our government hasn’t done enough to foster economic growth,” said Hatch. “In fact, more often than not in recent years, government has stood in the way. Growth is what we should be debating– ideas and proposals that would actually grow our economy and help people find jobs.”
Noting that the emergency unemployment compensation program, which was created as a temporary emergency measure after the financial crisis, has cost over $265billion over 66 months, Hatch said he intends to file a series of job-related amendments to strengthen the legislation. Some of the Hatch amendments include repealing the job-killing medical device tax and employer mandate that are a part of the President’s health law and ensuring that the retroactive Emergency Unemployment Compensation (EUC) benefits do not threaten program integrity.
Hatch further slammed Senate Democrats for failing to allow votes on any job-creating amendments.
“My friends on the other side of the aisle don’t want to have a real debate about these issues. Instead, they’re content to let the Majority Leader fill the tree and block any and all Republican amendments from coming up for a vote,” said Hatch. “One can only wonder what they’re afraid of. Presumably the majority has the votes to defeat any amendments the minority wants to offer. Where’s the harm in having a real debate? Where’s the harm in having an open amendment process? I can only conclude that they’re worried that some of the votes they’d have to take would be difficult politically. Indeed, preventing difficult votes seems to be.”
Below is the text of Hatch’s full speech delivered on the Senate floor today:
Madame President, I rise today in opposition to the Emergency Unemployment Compensation Extension Act of 2014.
This legislation is, in my view, flawed in many respects. And, that being the case, I intend to vote against it.
First and foremost, it needs to be said that the fact that we’re even having a debate about extending unemployment benefits is unfortunate.
Throughout the Obama Administration, our nation has been plagued with lackluster job growth, lower and lower rates of labor force participation, and high levels of long-term unemployment. Indeed, under this President, it has been harder to find a job than at any other point in our nation’s recent history.
But, as has been said before, these are just symptoms of a much larger problem. The plight of the long-term unemployed – which this bill is supposed to address – is not the major problem facing America today.
Instead, the major problem is that, despite the best efforts of many of us here in Congress, our government hasn’t done enough to foster economic growth. In fact, more often than not in recent years, government has stood in the way.
We are now more than five years into this administration and it is becoming increasingly clear that President Obama doesn’t have a plan to address these problems. True enough, he has proposals that would expand the government and redistribute income, but nothing resembling a plan to promote growth in the private sector or to actually put people back to work.
And, many of the President’s redistribution schemes end up costing labor supply and jobs, as the nonpartisan Congressional Budget Office has made clear with respect to Obamacare and the President’s proposed minimum wage hike.
Growth is what we should be debating, Mdme. President – ideas and proposals that would actually grow our economy and help people find jobs.
But, instead, we’re here once again to debate an extension of the Emergency Unemployment Compensation program, or EUC.
Let’s talk about the EUC program for a few minutes.
The proponents of this legislation have told us that extending “temporary” federal unemployment benefits is vital to our economy. But, I think the facts tell a much different story.
Between July 2008 when the program started and December 2013 when it expired, we spent roughly $265 billion on EUC benefits. That’s more than a quarter of a trillion dollars on a temporary federal benefit program.
For much of that time, the program paid up to 73 weeks of federal benefits, amounting to a record total of 99 available weeks of unemployment benefits when you add the state and federal benefits together.
All told, we’ve paid out EUC benefits for 66 months, which is two and a half years longer than any similar emergency unemployment program in U.S. history.
In other words, Mdme. President, EUC is a program with a long track record. And, when you look at that record, you see that it hasn’t had the positive economic impact proponents of the program often claim it has.
Indeed, despite the hundreds of billions of dollars in benefits we’ve already paid under this program, we’ve suffered through the worst jobs recovery in our nation’s history and the long-term unemployed have suffered the most.
And, there is evidence to suggest that this program has actually made the recovery worse.
For example, according to recent research published by the National Bureau of Economic Research, “unemployment benefit extensions can account for most of the persistently high unemployment after the Great Recession.”
So, while some Democrats have claimed that extending unemployment benefits is the best way to create jobs, the facts tell a different story.
Now, I’m not going to condemn anyone for wanting to extend a helping hand to those who continue to face difficulties under the Obama Economy. But, if we’re going to debate yet another extension of federal unemployment benefits, we should, at the very least, get our facts straight.
So, with all this in mind – the costs of the EUC program and the questionable benefits – let’s take a look at the legislation before us now.
One thing I’d like to point out is that, with this legislation, we have once again abandoned regular order and bypassed the committee process entirely.
I’ve remarked on this problem here on the floor several times before. When we ignore the role of the Senate committees, we short-circuit the legislative process and, more often than not, we end up with an inferior product.
This bill is no exception.
We learned this last month when the National Association of State Workforce Agencies (NASWA) sent a letter to the Senate outlining its concerns with this bill.
Chief among these concerns was that it would be extremely difficult for states to retroactively pay out unemployment insurance claims, as this bill would require. Indeed, according to NASWA, backdating EUC claims “would make it nearly impossible” to apply individual state work search requirements, which is a key factor in determining eligibility for unemployment insurance. In addition, the letter indicated that there would likely be a large increase in EUC overpayments as a result of this retroactivity requirement.
Due to these concerns and others, NASWA concluded that it would take states up to three months to implement this legislation, which is problematic because, though the bill before us is technically for a five-month extension, only two months of benefits would be paid out prospectively.
In other words, many states would not be ready to implement this legislation by the time it expires.
This is more than a glitch or a bump in the road, Mdme. President. It is state workforce agencies – the very people who will have to implement this legislation on a day-to-day basis – telling the Senate that this bill is unworkable.
According to the NASWA letter, there are a number of states that would consider not participating in the program due to these problems and the short time available to address them.
Labor Secretary Perez sent his own letter in response to NASWA’s statement, promising to help states address these concerns. Oddly enough, however, his letter was very short on actual details as to how that assistance would be offered.
All of that said, these are the kinds of problems I was talking about, Mdme. President – problems that can be addressed if committees are given an opportunity to operate.
Had the committee had an opportunity to vet this legislation, we could have also fully examined the offsets my colleagues are using to pay for this EUC extension. These are also problematic.
The main pay-for in this bill is the use of what is called “pension smoothing,” which is little more than a budget gimmick, but an especially pernicious gimmick when repeated. It has the potential to do real harm to pension plan funding levels, threatening the future retirement security of American workers.
Since the great recession of 2008, pension plans have struggled to regain their footing financially. The drastic drop in interest rates forced many plans to dramatically increase their pension contributions to keep pace.
In 2012, at the historic low point for interest rates, Congress essentially gave pension plans four years of funding relief to get through the worst period of low interest rates. Congress did this by allowing pensions to fund their plans as if interest rates were higher than they really are.
But we can’t indefinitely pretend that interest rates are artificially high, and contribution levels artificially low.
Reality still matters.
And the reality is, although still low by historical standards, interest rates are no longer at rock bottom and pension funding needs to gradually adjust to market rates just as current law provides.
Put simply, we should avoid additional pension smoothing because it permits lower pension funding and poor pension funding is bad pension policy. Pension funding remains a serious concern and this is not the time make it easier to underfund pensions. Doing so is worse than just kicking a can down the road. This can of pension underfunding will explode on American workers in the form of underfunded pensions that will somehow have to be rescued, either through painful cuts in benefits, much higher future PBGC premiums, or taxpayer-funded bailouts.
The other major offset in this bill is the extension of Customs user fees. This is also problematic.
Traditionally speaking, offsets in the trade space are reserved for legislation that actually extends trade programs, such as the Generalized System of Preferences or the African Growth and Opportunity Act. If we start using these offsets in other areas, we won’t have anything left over when it comes to extending these important programs.
Both of these offsets – pension smoothing and Customs user fees – fall under the jurisdiction of the Senate Finance Committee, just like the underlying UI extension. And, once again, had the committee been given an opportunity to consider these issues, it’s likely that these offsets would not have been used.
As you can see, Mdme. President, there are a number of problems with this bill that could have been considered and addressed had the Finance Committee been allowed to do its work.
Other problems could be addressed if there were a fair and open amendment process here on the floor. Sadly, it doesn’t appear that we’re going to get that either as the Senate Democratic Leadership appears poised to once again try to force a major piece of legislation through the Senate without giving the minority an opportunity to offer amendments.
Before our next vote on this legislation, I think we’ll see a number of amendments filed, many of which would likely improve the bill. Others would address the more pressing need to stimulate the economy and create jobs.
I, personally, have amendments that would do both.
For example, I have an amendment that would repeal the Obamacare tax on medical devices, which enjoys bipartisan support in both the House and Senate and would prevent further job losses in an important U.S. industry.
I have another amendment that would repeal the Obamacare Employer Mandate. I’m sure my colleagues on the other side of the aisle would deem this out of bounds, but they shouldn’t. After all, the Obama Administration seems pretty intent on delaying the Employer Mandate – it’s already been delayed for two years. If the mandate is that harmful to implement, why don’t we do away with it altogether and ensure that it doesn’t cost us any more jobs and further requests for unemployment benefits.
One amendment I have would help to ensure that the retroactive EUC benefits do not threaten program integrity. Specifically, it would require states, as part of their EUC agreements, to certify that paying out retroactive benefits will not lead to an increase in fraud or overpayments.
These are just some of the amendments I may offer to this bill. And, all of them, in my opinion, would be improvements.
I know that many of my Republican colleagues have amendments they’d like to offer as well.
Yet, my friends on the other side of the aisle don’t want to have a real debate about these issues. Instead, they’re content to let the Majority Leader fill the tree and block any and all Republican amendments from coming up for a vote.
One can only wonder what they’re afraid of, Mdme. President. Presumably the majority has the votes to defeat any amendments the minority wants to offer.
Where’s the harm in having a real debate?
Where’s the harm in having an open amendment process?
I can only conclude that they’re worried that some of the votes they’d have to take would be difficult politically. Indeed, preventing difficult votes seems to be priority number one for the current Senate majority.
At this point, it appears that they have the votes to pass the bill. I assume we’ll be through with this process this week.
Yet, while the Senate debate over unemployment insurance may be coming to an end, I can only conclude that the process failures we’re seeing in this chamber will continue as we move onto the next item of business, which is, in my opinion, very unfortunate.
This week’s debate over EUC is just the latest example of what’s wrong with the Senate these days. Sadly, it doesn’t look like things are going to get better under the current leadership. I yield the floor.