Plan would tie payments to economic triggers and raise minimums paid by the states.
President Joe Biden has endorsed key concepts that Oregon Sen. Ron Wyden has proposed to overhaul the nation’s unemployment benefit system, which has gone largely unchanged since the Great Depression more than 80 years ago.
Biden did so when he released details of his $1.8 trillion American Families Plan, although he did not mention them during his speech to Congress on Wednesday, April 28.
The White House statement mentions the $2 billion that he included in his $1.9 trillion pandemic recovery plan, which he signed March 11, to help states upgrade their computer systems for unemployment benefits.
“President Biden is committed to strengthening and reforming the system for the long term,” the statement said.
“And, that’s why he wants to work with Congress to automatically adjust the length and amount of unemployment benefits (that) unemployed workers receive depending on economic conditions. This will ensure future legislative delay doesn’t undermine economic recovery, and it will enable permanent reform of the system to provide the safety net that workers deserve in the hardest times.”
Under Wyden’s plan, which he unveiled April 14 with Colorado Sen. Michael Bennet, additional weeks of benefits would be triggered automatically when a state’s three-month unemployment rate reaches specified levels, starting at 5.5%.
The legislation also would standardize the normal period for state unemployment benefits at 26 weeks — Oregon already is there, but a few states are not — and it would raise weekly minimum benefits. They now range from a low of $235 in Mississippi to a high of $823 in Massachusetts. Oregon is toward the high end at $673. (All these figures exclude the current federal supplemental weekly payment of $300, which expires on Labor Day.)
The changes still await approval by Congress, either as part of the American Families Plan or standalone legislation.
Wyden is chairman of the Senate Finance Committee, which has authority over tax legislation.
Both he and David Gerstenfeld, acting director of the Oregon Employment Department, said the changes would allow states to pay benefits more quickly without having to wait for approval by Congress and interpretations by the U.S. Department of Labor, which oversees how states administer benefits.
“I pushed the Biden administration to support an overhaul of the unemployment insurance system, and I’m pleased to see the president do so,” Wyden said after the White House released its statement.
“The system has been broken for decades. Not only did we fail to fix it after the Great Recession, state after state sabotaged their unemployment insurance systems by making benefits as hard as possible to access. As we’ve seen, it’s much harder for the unemployment system to work in a crisis when it’s been neglected and sabotaged.
“We can’t fail again to fix and update it in the wake of the second economic crisis in 10 years. It’s especially important because we’re already seeing the start of another race to the bottom. This is a top priority of mine as we move forward.”
During the Great Recession a decade ago, Congress extended federally paid unemployment benefits for a maximum of 99 weeks, but that ended in 2013. But it did not make any major changes to the system itself. President Barack Obama called for changes in his 2016 State of the Union address, but Republican majorities in Congress took no action.
But during the onset of the coronavirus pandemic more than a year ago, and the resulting economic downturn, Congress created several new programs, including one that provided federal benefits for the first time to self-employed and gig workers. (Wyden’s plan would give them permanent coverage.)
Gerstenfeld said he and others who are part of the National Association of State Workforce Agencies welcome changes.
“Oregon’s floor on benefits is higher than in many states, so those changes probably would have minimal impact in Oregon,” he told reporters on a weekly conference call.
But the linkage of unemployment benefits with economic triggers is another matter.
“We have advocated for that for some time,” Gerstenfeld said. “We think that is a good policy move — having a permanent expansion of benefits and benefit eligibility when economic conditions are bad that is built into the law — so that Oregon and other states can build their systems ahead of time and know we can turn them on and off, without waiting for legislation to be passed and the federal government to start implementing it.”
Gerstenfeld said the agency staff is starting to prepare for its long-awaited modernization project — the state received $89.3 million from the federal government in 2009 to buy a new computer system — and the agency plans soon to sign a contract with vendor Fast Enterprises.
Gov. Kate Brown’s proposed two-year budget for the Employment Department contains the money for the computer upgrade, plus an additional amount to put Oregon’s paid family leave program into effect. The first contributions from employers and employees for that program are due to be collected on Jan. 1, 2022, and initial benefits paid out one year later.
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