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"[The press release follows:]
‘CHAIRMAN CHARLEs A. WANIK (D., OHIo), SUBcom MITTEE on TRADE, CoMMITTEE oN WAYs AND MEANs, U.S. House of REPRESENTATIVEs, ANNoUNCEs DETAILs of PUBLIC HEARINgs BEGINNING THURSDAY, MARCH 31, 1977, on THE TRADE AdJUSTMENT Assist ANCE PROGRAMs UNDER TITLE II of THE TRADE ACT OF 1974
The Honorable Charles A. Vanik, Chairman of the Subcommittee on Trade of the Committee on Ways and Means, U.S. House of Representatives, today announced details of public hearings previously announced on March 4, 1977, that the Subcommittee on Trade will hold beginning Thursday, March 31, 1977 and Friday, April 1. The hearings will be held in the Main Committee Hearing Room of the Committee on Ways and Means, Longworth House Office Building beginning at 10 a.m. The purpose of these hearings is to review the operation and effectiveness of Trade Adjustment Assistance programs for workers, firms, and communities provided under Title II of the Trade Act of 1974. The first day of the hearing will be devoted to testimony from public witnesses on bills presently pending before the Subcommittee on Trade amending the one-year eligibility limitation under section 223(b) and extending the benefit periods under section 233 of the Trade Act relating to adjustment assistance for workers. These bills include H.R. 1593, H.R. 2484, H.R. 2523, H.R. 3666, H.R. 4460 and H.R. 4581. The remaining time will be devoted to testimony from public witnesses on other aspects of the worker, firm, and community trade adjustment assistance programs, including the administrative procedures and eligibility requirements for obtaining benefits, the relationship between trade and other non traderelated economic adjustment programs, and overall program performance in meeting the objectives of timely and effective assistance. Testimony from Administration witnesses on these matters will be scheduled at a later date. Witnesses will be allocated time for summarizing their statements, based on the total time available to the Subcommittee. The full statement will be included in the record. Also, in lieu of a personal appearance, any interested person or organization may file a written statement for inclusion in the printed record. Requests to be heard may be received by the Committee by the close of business, March 28, 1977. The request should be addressed to John M. Martin, Jr., Chief Counsel, Committee on Ways and Means, U.S. House of Representatives, Room 1102 Longworth House Office Building, Washington, D.C. 20515–telephone (202) 225–3625. Notification to those scheduled to appear and testify will be made by telephone as soon as possible after the filing deadline. In this instance, it is requested that persons scheduled to appear and testify submit 30 copies of their prepared statements to the Committee office, Room 1102 Longworth House Office Building, by the close of business March 30, 1977. Persons submitting a written statement in lieu of a personal appearance should submit at least three (3) copies of their statement by the close of business April 4, 1977. If those filing statements for the record of the printed hearing wish to have their statements distributed to the press and the interested public, they may submit 30 additional copies for this purpose if provided to the Committee during the course of the public hearing. Each statement to be presented to the Subcommittee or any written statement submitted for the record must contain the following information: 1. The name, full address and capacity in which the witness will appear; 2. A list of any clients (or the firm or association he represents) at whose behest or in whose employ the witness appears; 3. The bill or bills on which the witness will be testifying and whether the testimony will be in support or opposition to it; and 4. A topical outline or summary of the comments and recommendations in the full statement.
Mr. GIBBoNs. In addition, the members have an extremely thorough set of background briefing papers prepared by our staff.
I would like to move that this be made a subcommittee P. On trade adjustment assistance. I think it is an excellent background presentation. This has been moved, and those in favor will say, “Aye.” [Chorus of ayes.] Opposed, “No.” [No response.] The print will be printed. On other matters, we have received additional documents on last week's International Trade Commission authorization hearings. I ask permission that these documents of the ITC and its reorganization and our own staff study of the ITC be entered in that hearing record. Is there objection to this request? [No response.] Without any objection, it will be so ordered. - * I would like to say, in addition to what I have just said in my opening statement, that I think that trade adjustment assistance ought to work. There is no reason for asking the firm or the worker or the community to have to bear the burden of public policy that has been set by the Congress, and within my own ability, I intend to see that that does not happen. I realize that we have had this program in existence for some time. It is certainly better than the program that was passed in the Trade Expansion Act of 1962, but it is still not working well enough. It is the objective of this member of this subcommittee to mak sure it works effectively and properly. Without any further ado, let us hear first of all from our col}. Mr. Philip Sharp, who is a Representative in Congress from ndiana. Mr. Sharp, we welcome you to this table. We acknowledge that you have been a leader in bringing the shortcomings of this program to our attention. You may proceed as you wish, Mr. Sharp.
STATEMENT OF HON. PHILIP R. SHARP, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA
Mr. SHARP. I would appreciate placing my testimony in the record and summarizing my remarks. Mr. GIBBoNs. That will be done. Mr. SHARP. I thank the committee for again raising this issue. I know last fall in the chaotic closing days of the session you were willing to take time to hear my concerns and the concerns of many other individuals and show your concern for this important question that had arisen. Very briefly, Mr. Chairman, as you have already indicated, the purpose of TRA was to try to make sure that some kind of assistance was given to those individuals who had to bear the brunt of a major change in the trade policy of this country, a trade policy, from which the whole was to gain, but in which we knew that certain individuals would be harmed, at least on a temporary basis. Unfortunately, because of the requirement that you can only petition to become eligible, within a year after you have been laid off as an individual, or as a group, a number of individuals simply have not received their benefits. They either were unaware or unable to find out about the program in its new form, enacted in 1974, or they were unable to establish their eligibility within that one ear because they had to show that it was the trade policy, it was imports which caused them to lose their jobs. This, as you can imagine, has led to growing concern about trade É. and frankly, among a number of my constituents, growing
itterness about the failure of the Federal Government to be sensitive to individual needs and to carry out the provisions of the Po through which they thought they were to receive benefits. . Chairman, I would simply urge that the committee act on this matter and act with speed. The purpose, of course, was to have the benefits when they were most needed. I would stress that they are still needed. I still have constituents at the Warner Gear plant who are out of work, who were laid off because of import policy, who then, of course, suffered with the recession and the inability to find jobs elsewhere. ... They still need those benefits for daily existence. Even though a few have been able to get back to work and would still become eligible under this bill, they, after all, lost savings or incurred debts and have paid a price for the change in trade policy. So I would certainly urge that the subcommittee give careful consideration to this matter. [The prepared statement and attachment follow:]
STATEMENT of Hon. PHILIP R. SHARP, A REPRESENTATIVE IN Congress FROM THE STATE OF INDIANA
Mr. Chairman, I am here to testify in favor of H.R. 4460 and H.R. 5363, identical bills to amend the worker adjustment assistance provisions of the Trade Act of 1974. Thirty-eight Members of Congress have joined me in sponsoring this legislation, and I believe this is an indication of the widespread concern about the inequity the bill is designed to correct. Your willingness to schedule this hearing early in the session, in light of the many other pressing matters before this subcommittee, shows that you share our concern. On behalf of the other sponsors and the thousands of affected workers, I appreciate the subcommittee's interest.
THE INEQUITY OF THE on E-YEAR LIMIT
As you know, the Trade Act of 1974 provides for payment of a Trade Readjustment Allowance (TRA), as well as other forms of adjustment assistance, to workers laid off as a result of increased import competition. This helps ensure that “the social costs of adjustments to import competition should not fall disproportionately on a few, while the economic benefits of liberalized trade are enjoyed by everyone.” To receive such assistance workers or their representatives are required to petition the Labor Department for certification of eligibility. In order to ensure that the assistance is provided promptly, while the workers need it most, Section 223 (b) of the Act limits benefits to those workers who were laid off within one year prior to the date of the petition. This incentive for prompt filing, however well intentioned, has resulted in a major inequity in the provisions of TRA benefits. Many workers whose jobs were lost because of imports have been excluded from the trade adjustment assistance program beiause the petition to certify thir eligibility was filed too late. There are various reasons for these late filings, but the principal one to date has been the lack of widespread information about the new program and the deadline. Another one is the lack of timely trade data to justify a claim that layoffs in a given plant or industry were in fact caused by import competition. The main point, however, is that thousands of workers who meet every other criterion for eligibility have been denied benefits because of this one year limit. In my own district there are three situations where the one-year limit has resulted in the denial of benefits to significant numbers of workers. In testimony last year I discussed these cases in some detail, so I will make only three points here. First: The workers at the Warner Gear plant in Muncie, Indiana, actually asked the local unemployment office about applying for TRA benefits after they were laid off. This was well within the one year period for petitioning for certification. Employees of the employment office told them that they were unaware of any such program or benefits, and this clearly contributed to the late filing of the petition for these workers. Second: Because the import related layoffs at Warner Gear occurred over a period of several months, some workers were laid off before the eligibility date and others were laid off after that date. This means that people who worked side by side at the same or similar jobs, and who lost their jobs for the same reason, are now being treated differently under the trade adjustment assistance program. Moreover, those who were laid off first and who are not receiving TRA are those with the least seniority, and in many cases they have younger children, more bills, and fewer savings than their fellow workers. Third: One of the most striking examples of the arbitrariness of the oneyear limit occurred at the Jay Garment plant in Portland, Indiana. Their petition was filed on March 9, 1976, and the Department of Labor certified that imports has “contributed importantly” to their loss of jobs. The earliest eligibility date under the one-year limit was March 9, 1975; but that date fell on a Sunday, and most of the workers, had been terminated on the previous Friday. The current law does not even allow enough flexibility to go back two days to the last previous workday in establishing the eligibility date. Understandably, many of these workers wonder why their government wouldo, allow inequities such as these to happen.
Late in the last session I introduced H.R. 15421, which would have simply eliminated the one-year limit. This remedy was opposed by Administration officials during a hearing of this subcommittee in large part because of the administrative difficulties in implementing an open-ended program. I, accepted their arguments against “open endedness,” and that is why H.R. 4460 proposes to replace the one-year limit with a two-year limit.
Section 2(b) of H.R. 4460 is also new. It provides that a worker who has already been certified as eligible to apply for adjustment assistance shall not have his benefits recomputed because of this amendment. Section 232(a)(1) and 247 (4) of the Trade Act provide that the amount of a worker's benefits is based on his average weekly wage during his highest quarter among the first four of the five quarters preceding his layoff. Under certain circumstances the proposed two-year limit in Section 1 of the H.R. 4460 could force the recomputation of benefits for workers who have already received them, and Section 2(b) will prevent this.
The subcommittee should note an error, in the print of . H.R. 4460. In Section 2(b), lines 3 and 4 should read as follows: “Section 223(b)(1) of the Trade Act of 1974 (as amended by the first section of this Act) shall not apply - + •.”
Two major concerns were voiced about last year's H.R. 15421, and although H.R. 4460 should minimize them, they may be raised again. There are cost and administrative difficulties, and I would like to deal with each of them.
The cost of any legislation is a valid concern. In the case of this bill, however, I believe it should not be considered a “new” cost, but rather the true cost of the trade adjustment assistance program adopted in the Trade Act of , 1974. The Act did not intend to exclude these workers by means of the one year limit. It intended for all otherwise eligible workers who were laid off as a result of import competition to receive benefits.
If the cost of the adjustment assistance program, including the workers who have been excluded, seems too high, the fault is in the eligibility rules and the allowances established in 1974, not in this amendment. We would not attempt to control the rising costs of the Social Security program by arbitrarily ex
cluding some beneficiaries who did not apply by a certain date, and we should not arbitrarily exclude eligible workers from the adjustment assistance program in order to limit its cost.
In the hearing last year, an Administration witness estimated the cost of H.R. 15421 at about $77 million a year. I questioned the assumptions on which that estimate was based, and it is my understanding that the Department is now estimating, for H.R. 4460, a range of $40 to $53 million. This appears more reasonable but it is worth noting that the cost of this amendment, whatever it turns out to be, can also be considered a measurement of the financial inequity now being caused by the one-year limit. If an additional $40 to $53 million seems an expensive price to pay for the benefits of a liberal trade policy, keep in mind that more than this is now being paid by the workers who lost their jobs as a result of this trade policy.
One other very important point needs to be made about these cost estimates. The newness of the adjustment assistance program and the lack of information about it were the cause of many of the late petitions during the first year or two of the program. Now that more workers are aware of the program, as are their representatives and the people in the local unemployment offices, it is unlikely that there will be as large a number of late filings in the future. Therefore the cost estimates provided by the Labor Department are valid only for the first year after enactment of this amendment; thereafter the costs should be substantially lower.
The question of the difficulty of administering this amendment also deserves discussion. The Administration witnesses last year suggested that wage records and other company data necessary to make eligibility determinations might not be readily available if petitions were filed more than one year after layoff began. However, existing legal requirements for record keeping by employers should ensure that the information is available, and I would like to incorporate in the hearing record, at the end of my testimony, a memorandum by Leonard Page, Assistant General Counsel of the United Auto Workers, explaining these requirements. If the Department of Labor should testify convincingly to the need for even longer retention of certain records, the subcommittee could consider imposing such a requirement during mark-up of this bill.
The most difficult administrative burden arising from this legislation will be the requirement that adjustment assistance be made available retroactively to those workers excluded by the one-year limit between 1974 and now. I sympathize with the Federal and State officials who will have to implement it. I am sure that they are already working very hard to make this program effective, and I realize that this legislation will make their work more difficult. But we should not let our concern about their workload prevent us from assisting those workers who are out of work. On this point there should be no compromise. During the past two years an estimated 26,450 workers have been denied benefits because of the one-year limit. To aid these workers, the change in the limit must be retroactive. To amend the limit for future petitions while ignoring workers who have already been excluded would be locking the barn door after the horse is out.
TIMELINESS OF ASSISTANCE
Another point that was raised in last year's hearings was the need for payment of benefits in a timely fashion, so that adjustment assistance is made available to workers while they are still out of work. I agree with that aim, and I think that the affected workers and their representatives also agree. When they need help, they are not likely to delay filing their petition merely because the deadline has been extended. But I would also like to point out that many of the workers excluded from the program by the one-year limit are still out of work. In my own District, at the Warner Gear plant in Muncie, Workers laid off in late 1974 have still not been called back. Workers elsewhere who are back, at work may have survived their period of unemployment by going into debt or wiping out their savings. To imply that assistance is no