Introduction of the Economic Growth and Reducing Unemployment Act

Floor Speech

* Ms. NORTON. Mr. Speaker, I rise today to introduce the Economic Growth and Reducing Unemployment Act, to address perhaps the two greatest workforce tragedies resulting from today's economy--our long-term unemployed and our unemployed young people--and to spur economic growth. Since Republicans took control of the House of Representatives, many Democrats have tried to get them to shift from their one-sided, cuts-only fiscal policy to taking some steps to more quickly reduce stubborn unemployment throughout the country. Republican austerity policies, as predicted by history and Economics 101, have driven the economy into another ditch, with the possibility of a double-dip recession. We need to reduce the country's budget deficit and debt in the long term, but as virtually every economist and the Federal Reserve chair himself have said, we must also create jobs and stimulate the economy now, before it is too late. While 14 million Americans are unemployed, my bill targets those particularly hard hit by unemployment. In August 2011, the number of long-term unemployed (those jobless for 27 weeks or more) was six million, which accounted for 42.9 percent of the total unemployed population. In July 2011, the number of unemployed youth 16 to 24 years old was 4.1 million.

* To make matters even worse, the unemployed now face employment discrimination and employers are reluctant to hire the long-term unemployed because of the length of their unemployment. My bill would give employers a $5,000 tax credit against their payroll tax liability for each (net) new long-term unemployed person they hire. The tax credit is large enough to give employers an incentive to increase hiring and wages, which would inject demand into the economy. The credit would be available to the broadest base of employers because every employer--government, non-profit and for-profit--pays payroll taxes, and employers could claim the credit on a quarterly rather than annual basis. According to the independent, non-partisan Congressional Budget Office, the proposal would ``increase both output and employment,'' through four mechanisms: (1) with lower employment costs, employers would reduce the costs of their products and services, which, in turn, would first boost sales and then hiring and hours worked; (2) employers would pass on some of the tax savings to employees in the form of higher wages or other compensation, which, in turn, would increase employees' purchasing power; (3) higher profits would lead to higher stock prices for public companies, increasing shareholders' wealth and therefore their willingness to spend; and (4) with lower employment costs, employers would increase hiring. The bill has safeguards to prevent employers from gaming the system, including denying a credit to an employer that fires one employee and hires a replacement.

* Particularly disappointing as well is the high unemployment rate for young people who heeded our advice to graduate from high school and college, only to try to enter the workforce in the worst economy in generations. By significantly expanding AmeriCorps, my bill, without needing a new administrative structure or bureaucracy, would allow unemployed young people to earn a stipend sufficient to support themselves and to obtain work experience and a good work history to help them obtain future employment. The net cost of the expansion would be low, because these young people would be providing urgently needed local services that are being dropped or curtailed because of federal, state, and local budget cuts, such as after-school programs, tutoring, and assistance for the elderly.

* The bill would significantly expand job opportunities for young people who have played by the rules but find themselves unemployed in this economy. The bill would increase the number of participants in the AmeriCorps State and National program from approximately 78,000 to 500,000 full-time participants. Participants receive a living allowance, which most find sufficient to meet their basic needs, and are also eligible for an education award equal to the value of a Pell grant, for school-loan forbearance, health care benefits and child care assistance. By expanding the program, we would reduce the number of unemployed young people, provide them with the work skills and experience they would not get while unemployed, and help cash-strapped states and local governments provide services that they would otherwise have to cut.

* For some time, it has been clear that policies to address today's unusually stubborn unemployment need to be targeted in order to be effective. The long-term unemployed and unemployed young people are the two groups that have been hardest to reach in prior measures. Without significant targeting, the long-term unemployed are in danger of becoming permanently unemployed and young graduates will face their first years as adults without jobs and with no way to acquire work experience. Both groups deserve better. I ask the House of Representatives to support this bill because it targets both of these neglected groups of Americans.

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