Statements on Introduced Bills and Joint Resolutions

Floor Speech

BREAK IN TRANSCRIPT

Mr. DURBIN. Mr. President, employers in several States, including Illinois, are facing an automatic tax increase if Congress doesn't do something. That is right. Businesses that are struggling in this recession face a Federal tax coming their way if we don't act.

I am introducing a bill today that will prevent that. This is a time when we need to help businesses--small businesses in particular--to spend every dime they have on hiring people looking for work.

Here is why I am introducing the bill.

Current law requires States that have overdrawn their unemployment insurance trust funds to raise taxes on employers to fill that deficit. The recession put tens of millions of Americans out of work, and the number of people who have been unable to find new work for more than 6 months is unprecedented in recent history. Unemployment insurance has helped these families through a difficult time, and it has been a good investment. It is money that has been given to the unemployed that is quickly put back into the economy, creating demands for goods and services.

The Congressional Budget Office ranks unemployment benefit payments as one of the most stimulative things we can do to turn this economy around. So we know it is good economics. That spending is going to help drive up demand for what private companies sell, which encourages them to hire more workers. But the ferocity of the economic downturn has strained the unemployment insurance trust fund in many States.

Let me be clear. This problem has nothing to do with the operating deficits many States are facing. That is a bigger but unrelated problem. The UI trust funds can only be used by States to pay unemployment insurance, and it is these trust funds that we need to return to solvency. That is what the Unemployment Insurance Solvency Act, which I have introduced, would do.

Here is what it specifically sets out to accomplish:

First, it would waive the requirement that States immediately charge local employers higher taxes for the next 2 years. This would save companies located in my State of Illinois, for example, over $300 billion over the next 2 years and save businesses nationwide between $8 billion and $11 billion between now and the end of 2013.

Second, it would waive the interest payments that States would otherwise be required to pay for the next 2 years. That is going to save Illinois $200 million in interest payments over the next 2 years.

Finally, it gives States--Governors, State legislatures, and local employers working together--greater flexibility in figuring out how to replenish their unemployment trust fund starting in 2014.

It would give States three options to explore: First, to restructure their UI tax base and rates to fill any hole in the trust fund; second, seek forgiveness from the Federal Government for a portion of the debts the State might owe to its trust fund in return for entering into a long-term solvency plan with the Department of Labor to protect the interests of the jobless who need unemployment insurance; third, maintain existing solvency that a State has already achieved, earning higher Federal UI interest payments and lower Federal UI taxes for its employers.

The President included a version of this proposal in his budget he submitted to Congress on Monday. I commend him for it.

With 13.9 million people out of work and $14 trillion in Federal debt, we need to find creative solutions to solve problems facing workers and employers. This bill I have introduced, cosponsored by Senator Jack Reed of Rhode Island and Senator Sherrod Brown of Ohio, is one that I think addresses this issue in a proper manner. It removes this new burden on small businesses, a tax burden which can only hold them back from hiring the people they need and reducing unemployment, and it gives to States that are hard-pressed because of other financial problems at least 2 years where they don't need to pay the interest they owe on the money for unemployment insurance. It is a stopgap emergency measure supported by the Obama administration which I am happy to introduce.

This bill will prevent immediate tax increases on employers. It ensures unemployment insurance will be there when workers need it. And it does not raise the Federal debt. I urge my colleagues to support it.

BREAK IN TRANSCRIPT

Source