(The AFL-CIO circulated the following statemen on June 4.)
The legislation passed yesterday by the House and championed by the Republicans which creates a demonstration program for “personal reemployment accounts” (PRAs) is a smoke and mirrors public relations move which does nothing to respond to the real needs of the unemployed or the economy.
The Republican House pulled the wool over Americans’ eyes by using parliamentary maneuvers to move a bill that was never considered in the regular legislative process. Furthermore, the bill’s sponsors attached this legislation to two education training bills that have already passed the House with bi-partisan support, H.R. 4409 and H.R. 4411, thus giving cover to members voting for an undesirable and faulty remedy to the country’s bleak unemployment situation.
The bill establishes Personal Reemployment Accounts that will help at most 15,000 unemployed workers, out of 8.2 million currently unemployed. It will restrict, rather than expand, the amount of services and help available for unemployed workers.
For the first time this bill would set a federal cap of $3,000 on job training and re-employment services and force workers to pay for many services they now get for free. Those who are eligible for PRAs would be forced to choose between the PRA and staff assisted services they receive under the Workforce Investment Act that could be worth as much as $10,000. The Republican bill would also prohibit workers with PRAs from participating in federal job training programs for one year.
Creating theses accounts at a time when the Bush administration and the Republican Congress have consistently defeated Democratic attempts to extend federal unemployment benefits for record numbers of long-term jobless suggests that the real strategy is to use PRAs as a very weak substitute for extended unemployment benefits. The Bush Administration has stated that PRAs are “a new approach to unemployment insurance.”
In addition, there is no new funding for this program. Funding for PRAs comes at the expense of other demonstration programs to help unemployed workers get training. It comes at a time when the number of unemployed workers receiving federal job training has declined by at least one-third and funding has been slashed by $1 billion since President Bush took office.
PRAs would require states to create redundant and unnecessary administrative structures. Under the House bill PRAs, cash benefits and reimbursements would be administered through the WIA One-Stop system which has no experience with the administration of cash benefits.
Rather than create a new program that provides less help and takes money away from current programs, Congress should fully restore the Bush budget cuts for job training and Employment Service programs. It should also renew the Temporary Emergency Unemployment Compensation (TEUC) Program to help the 1.5 million jobless workers who have already exhausted federal unemployment benefits and the thousands who continue to exhaust regular unemployment benefits.