Unemployment Compensation Could Be Lowered in PA

A House bill reducing unemployment benefits failed to pass a key hurdle Tuesday, but will likely be called up for another vote later this week.

The legislation would save more than $600 million a year, by narrowing eligibility for unemployment compensation and lowering benefits. Among other changes, people would need to actively look for work while receiving state support. The measure would also bar people from cashing unemployment checks while they’re still receiving severance pay from their former employers.

Sponsor Scott Perry, a Cumberland County Republican, said benefits need to be trimmed. “We are $3.7 billion in debt to the federal government,” he argued. “Our fund is bankrupt. The federal government’s fund is bankrupt, and we are required to pay the bills, starting this year.”

Because of the federal debt, and Pennsylvania’s improved 7.5 percent unemployment rate, lawmakers need to restructure the unemployment compensation program by June 11. If that doesn’t happen, extended federal benefits will disappear, along with checks for 45,000 Pennsylvanians.

Democrats agree on the need for a speedy fix, but argue Perry’s bill pays down Pennsylvania’s debt on the backs of the unemployed. “It dramatically cuts the benefits that workers receive,” said Philadelphia Democrat Mark Cohen. “A lot of workers who now get unemployment compensation will not get any compensation whatsoever, without the Parker amendment.”

Enough lawmakers had concerns about the measure to stall its progress on Tuesday afternoon. The House needs to pass a bill three times before it moves to the Senate, and the measure failed on second consideration by a 122-79 margin. Republican leaders made a “motion to reconsider,” and say they may call the bill up for another vote tomorrow.

Unemployment compensation reform became a hot political issue during last year’s gubernatorial campaign, when Republican Tom Corbett said he’d consider increasing both employer and employee contributions to the state’s fund, in order to pay off the federal debt. (Corbett later walked that comment back.) Right now, employees pay a .08 percent unemployment tax, which amounts to about 80 cents for every thousand dollars earned. Companies also pay a tax – but only on the first $8,000 every employee earns.

Pennsylvania has been using federal money to pay out benefits since early 2009.