President Clinton and Labor Secretary Robert B. Reich on Wednesday unveiled a five-year, $13-billion job training and assistance bill designed to help unemployed people get back to work faster--the fourth major element of the Administration’s domestic policy agenda for the year.
“The existing system of unemployment and training is simply broken,” Clinton declared in an East Room ceremony called to launch the bill. The Administration’s bill, he said, is designed to repair one that is “outmoded, bureaucratic and too often delays people getting back to work instead of accelerating their return to the work force. It will build a new system to help workers get the training and counseling they need to fill higher-wage jobs more quickly.”
Although Reich first sold Clinton on the idea of the bill--which he has dubbed the “re-employment act"--at a time of high unemployment, the proposal remains a high priority for the Administration even though unemployment rates have dropped. The legislation’s prospects in Congress, however, are believed to be questionable this year.
Clinton has argued in private to his aides that the proposal is key to raising the living standards of lower-income Americans and to reducing the fear of long-term unemployment. He has cited the re-employment proposal--along with health care reform, welfare reform and anti-crime efforts--as the main items on his agenda for the year.
The Administration’s bill is aimed at the 1.8 million to 2 million people who get laid off each year with little chance of getting their old jobs back. To assist those workers, the bill would consolidate six existing job training programs--the largest of which, the Trade Adjustment Act, is designed to help workers who are injured by import competition.
In place of the existing programs, the Administration would create a single, new program that would provide intensive counseling and help in looking for a new job. Current programs assist only about 570,000 dislocated workers each year with the level of assistance varying widely.
Clinton’s proposal also would provide grants to states to establish “one-stop” employment centers that consolidate existing programs to help unemployed workers. States would be required to begin screening all unemployed workers to determine, within the first five weeks of unemployment, which people have a reasonable chance of getting back their old jobs and which ones will need more intensive help finding a new line of work.
The proposed bill also would authorize states to conduct experiments with several innovative programs designed to get people off unemployment rolls more quickly. A small percentage of unemployed workers would be eligible to cash in their unemployment benefits as a lump sum bonus in return for getting a new job early on. Another small group of people would be eligible to receive grants to start their own businesses in lieu of receiving regular unemployment benefits.
Because of budget constraints, the Administration drastically scaled back Reich’s initial ideas that would, essentially, have given every American worker an entitlement to federally supported job training. Instead, the bill would phase-in slowly--becoming fully effective only at the end of the decade and, even then, would only provide job training to a fraction of those who are permanently out of a job. Most displaced workers would receive only assistance in finding a new job--computer searches of job listings, for example.
Even so, the bill would roughly double the number of people enrolled in some form of federally assisted job training from 250,000 now to about 500,000 a year.
To fund the new proposal, the Administration would consolidate the six existing Department of Labor training programs and cut additional domestic spending. Clinton’s budget for fiscal 1995 already identified some $1.5 billion in cuts to fund the first year of the program but the Administration would have to find--and persuade Congress to approve--several hundred million dollars more in program cuts to offset higher spending in the years to come.
The most expensive part of the new program would be federal income-support payments to those people who need long-term training. To save money, long-term training--up to 18 months beyond a person’s regular, 26-week, entitlement to unemployment compensation--would be sharply restricted. Funds for income supplements would come primarily from making permanent a “temporary” 0.2% federal unemployment tax first enacted in 1977. That tax generates about $1.2 billion a year.
Administration officials estimated that about 225,000 workers a year would be eligible for long-term training and income support.
Several aspects of the proposal have drawn fire from groups ranging from business, which is unhappy about extending the 0.2% payroll tax, to labor, which is worried that workers eligible for existing programs would end up getting less under the new bill than they get now. Some representatives of business groups also have worried that the program might evolve from its current, limited form into a more expensive entitlement program.