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An Open Letter to the United States Congress: Support the JOBS Act!

June 14, 2011

Dear Member of Congress:

On behalf of the 362,000 members of the National Taxpayers Union (NTU), I urge you to support the Jobs Opportunity, Benefits, and Services Act (JOBS Act). Introduced as H.R. 1745 by Representative Camp (R-MI) and as S. 904 by Senator Hatch (R-UT), this legislation would give states flexibility in allocating unemployment insurance funds to get citizens back to work as well as prevent job-crushing tax hikes. 

Since the recession began in 2007, states have found themselves in a self-defeating cycle of higher taxes and reduced job growth. In an effort to replenish their drained unemployment insurance (UI) funds, unemployment taxes have soared by 44 percent in the last two years and more than two-thirds of states have indicated they will raise taxes on businesses next year. These already-enacted and looming tax hikes have dampened job creation activity, causing states to lean ever-harder on the crutch of federal funds. Adding to this unproductive cycle, 33 states with insolvent unemployment trust funds have borrowed more than $46 billion from the federal government in order to continue paying benefits.  

The JOBS Act would allow states that have been constrained by one-size-fits-all federal rules to finally break this cycle of dependence. States are set to receive $31 billion in remaining temporary federal unemployment funds, but have very little discretion in how it is spent. The lack of flexibility has reduced states’ ability to tailor proper responses to their unique employment and debt situations. North Dakota, for instance, with a 3.3 unemployment rate and no outstanding loans from the Federal Unemployment Account, has vastly different needs compared to California with 11.9 percent unemployment and nearly $11 trillion coming due.

H.R. 1745 and S. 904 would allow states to put their share of the remaining federal funds toward a menu of options designed to fit their individual circumstances. Whether it be through continuation of current benefits, paying down federal loans, or investing in more training and job placement efforts, this bill opens the door to innovation while reducing the pressure (especially political pressure) to impose harmful tax increases. The JOBS Act also strengthens job search, education, and training requirements as a stipulation of receiving aid.

Ultimately, Congress should reexamine the fundamental structure and economic assumptions underlying government UI programs. In the meantime, the tab is set to become due on federal unemployment loans, making the status quo unworkable for many job-seekers, businesses, and state governments. Rather than continue with an inflexible program that has conjured up the specter of higher taxes, the JOBS Act allows states to search for innovations that could help get their citizens back to work. For the aforementioned reasons, NTU is pleased to endorse this important legislation. 

Brandon Greife
Federal Government Affairs Manager



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