Provide subsidized COBRA coverage for recently laid-off workers

• Workers losing their job on or after September 1, 2008 as a result of the economic downturn would be eligible to receive a 65 percent subsidy towards their COBRA premium for up to 12 months.
• Studies show that the vast majority of COBRA-eligible individuals never take advantage of COBRA because, without a subsidy, they cannot afford the premium.
  

Extend COBRA coverage for older and tenured workers

• Workers age 55 and older and those who have worked for their employer for 10 or more years will be able to retain their COBRA coverage until they become Medicare-eligible or secure coverage through a subsequent employer.
• Electing COBRA coverage is likely the most preferred option for workers who have lost their jobs. Despite the obligation to pay up to 102 percent of the premium, millions of Americans prefer to keep the same plan with the same doctors. In addition, older and tenured workers are more likely to elect COBRA coverage because they may be denied coverage in the individual market as a result of cost or preexisting conditions, or face steep premiums.  
• Older workers face difficulties in securing new employment. Two-years after suffering a job loss, only 55 to 60 percent of older unemployed are working. This is significantly less than the re-employment rate for younger workers. And, of those who do secure re-employment, more than a quarter who previously worked full-time are now only working part-time.  
  

Increase funding to states who provide Medicaid coverage to unemployed and uninsured individuals who may not be eligible for COBRA

Economists predicted that, based on past recession trends unemployment could soon reach eight percent or higher, and middle-class families’ incomes could drop by more than $2,000 this year.

“It is urgent that we prepare now to take the next steps to rescue the economy by creating jobs, providing immediate relief to the states and small businesses, and by making real investments in energy, technology and education,” Chairman George Miller said. “We must have a plan that speaks directly to the needs of American families and workers today.”

The number of out-of-work Americans has increased by 2.2 million in the last year. They join more than 2 million workers who have been unemployed longer than 27 months. In October, many workers began exhausting their unemployment insurance benefits.  By the end of this month, an estimated 775,000 workers will be left without a safety net, and a total of 1.1 million workers will be in the same straits by the end of the year.

In a letter to Chairman Miller released at the hearing, economist Alan Blinder of Princeton University predicted that “unemployment will top out in the 8-8.5 percent range” if the coming recession is as severe as the recessions of 1981-82 and 1973-75.  “My worry,” wrote Blinder, “is that we may be heading in that direction.”

“We are clearly in the early stages of a potentially very serious recession that will likely be as deep as anything we have experienced in a generation,” said Ron Blackwell, chief economist of the AFL-CIO. “Just how deep and protracted this recession will be depends on a timely, aggressive and well-focused economic recovery package.”

To help families make ends meet while they look for a new job, the Democratic Congress voted to extend unemployment benefits in early October. Unfortunately, that effort was blocked by Senate Republicans. The Bush administration threatened to veto the extension claiming it would encourage out of work Americans not to find a new job.

“There is nothing enjoyable about being up at night worrying about how you are going to make ends meet,” said Dana Stevens, an unemployed worker from Thorofare, NJ. “For anyone to suggest that receiving unemployment is like getting a free vacation is insulting and degrading to the millions like myself who are desperately trying to get back to work.”

Millions of workers not only lose their jobs during a recession, but household incomes for those with a job also decline on an average of four percent. Jared Bernstein, director of the Living Standards Program at the Economic Policy Institute, said that if past trends repeat themselves this time around, middle-class families’ who earn around $60,000 will see their income fall about $2,500 this year.

“Due to factors regarding job loss, fewer hours, and the slower wage growth driven by the weaker job market, incomes usually fall in recessions,” said Bernstein.

In September, the House of Representatives also approved an economic rescue and job creation package to help head off a deeper recession. It would have created good-paying jobs by investing in new energy technology and infrastructure.  The bill would have also provided access to job training and helped working families with grocery and health care bills. Senate Republicans and the Bush administration also opposed this effort.

Many economists say that making infrastructure investments are some of the most effective uses of federal dollars that create jobs in both the short-term and the long-term.

Robert Pollin, a professor of economics at the University of Massachusetts-Amherst, said a $150 billion job creation program will create 2.9 million jobs in the short-term alone.

“In the midst of the severe financial crisis and deepening recession, it is imperative that the federal government take action as soon as possible to counteract the downturn,” said Pollin.

Pollin’s latest research also reveals that infrastructure investment produces a second wave of private sector job creation within two years, pushing the 2.9 million new jobs up to 3.3 million new jobs in a two-year time frame.

To encourage long-term job creation, investments are needed to build the nation’s technological backbone that will help foster growth in the emerging high-tech industry and green economy.

“Advanced networks will allow increased opportunities for the creation of even more highly skilled technology jobs to invent new products and improve existing ones in the vital areas of energy, health care, education, public safety and services,” said Christopher Hansen, president and CEO of AeA. “These are the jobs of the future.”

The bill requires group health insurance plans that cover mental and addiction health benefits to put those benefits on equal footing with physical ailments. Private health insurers generally provide less coverage for mental illnesses than for other medical conditions.  H.R. 6983 prohibits employer group health plans from imposing limitations on coverage for mental illnesses that they do not impose on physical illnesses. For example, the legislation would require that group health plans offer the same terms for deductibles, limits on hospital stays and outpatient visits, and co-payments.  The measure will allow employers to offer more comprehensive mental health coverage without significant additional cost, while significantly reducing out-of-pocket costs for plan participants.

Some states already have strong requirements for the coverage and treatment of mental illness. H.R. 6983 would not affect state laws that offer stronger consumer protections.

The bill is named after the late Sen. Paul Wellstone (D-MN) and current Sen. Pete Domenici (R-NM), both longtime advocate of mental health awareness and parity.

"Today, approximately forty-four million Americans suffer from mental illness, but only one-third receive treatment. One reason is that private health insurers generally provide less coverage for mental illnesses and substance abuse than for other medical conditions.  This bill is an important step towards ending the stigma attached to mental illness and providing fair coverage to those in need.” -- Chairman George Miller

Although the wage gap between men and women has narrowed since the passage of the landmark Equal Pay Act in 1963, gender-based wage discrimination remains a problem for women in the U.S. workforce. According to the U.S. Census Bureau, women only make 77 cents for every dollar earned by a man. The Institute of Women’s Policy Research found that this wage disparity will cost women anywhere from $400,000 to $2 million over a lifetime in lost wages.

These pay increases aren’t just about helping workers provide for their families. Unlike tax breaks for the wealthy, the minimum wage increase for American workers will be spent locally, which is good for local businesses, large and small, and good for a struggling economy.

Democrats in Congress have been working to ensure that all Americans are able to share in the benefits provided by their hard work. We will keep working toward those goals in order to help grow and strengthen America’s middle class. So far, Congress has enacted a stimulus package to try to get our economy back on the right track, approved legislation to make college more affordable, and pushed efforts to lower energy and health care costs.

In the wealthiest country in the history of the world, it is an outrage that anyone who works full-time would still wind up in poverty. Democrats will continue to look at solutions that will help all Americans build a better life for themselves and their families.
 

Other findings:

- Thousands of cases may have been mishandled by the agency over the past decade, which may have resulted in workers receiving reduced or no back pay at all. In one case, the GAO uncovered that the Wage and Hour Division dropped investigations when employers refused to pay or claimed no funds to pay back wages, even though the business was still in operation. Although the agency has the ability to take employers to court in order to force recalcitrant employers to issue back pay, the agency refused to do so in most cases.

- Hundreds of cases where the agency did not assign an investigator for more than a year after the initial complaint. It cited one example where a truck driver who was not paid for overtime had to wait for 17 months to be assigned an investigator. The case against the truck driver’s employer was dropped because the agency could no longer locate the truck driver.
 
The investigations were conducted by the GAO at the request of Chairman George Miller.