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House GOP Offers Sweeping Unemployment Reforms

As part of a broad extenders package released Friday, House Republicans have pinned their support of unemployment insurance on sweeping reforms of the program, but failed to include increased funding to support the large mandates created.

The GOP proposal would require recipients of aid who do not have high school degrees — a population disproportionately vulnerable to unemployment — to be “enrolled and making satisfactory progress in classes” toward a General Education Development certificate or equivalent. The problem is that enrolling in such classes, or even taking the exam, can be expensive, and the bill introduced Friday includes no additional funding to assist cash-strapped states or individuals who likely would flood the system.

In 2010, 11.7 percent of UI recipients — or 1.4 million people — did not have a high school diploma. Nearly 50 percent of those people were over the age of 45, according to estimates from the Current Population Survey.

The general idea, Republicans say, is a good one. The unemployment rates from November reveal a significant gap between Americans who hold a high school diploma and those who do not. The seasonally adjusted unemployment rate last month for Americans with “less than a high school diploma,” according to the Bureau of Labor statistics, was 13.2 percent. Americans who have a high school degree were unemployed at a rate of 8.8 percent.

But the average cost of taking the GED is $75, though it varies by state. There is also a fee to retake the five-part test if an applicant fails any one section, and the cost of courses also differs widely. Democratic House staffers concerned about the provision when it was introduced in a bill passed by the Ways and Means Committee last spring say that they’ve estimated that courses cost in the $100 range nationwide.

Republicans claim they do not need to include additional funding because federal and state money is already available for those costs. But if seeking a GED becomes a requirement to get unemployment benefits, the system is likely to see a flood of new applicants for education aid.

According to the National Assessment of Adult Literacy, 90 million people have skill levels below high school completion. Currently, 2.3 million people are served by Workforce Investment Act Title II dollars and state dollars, with only a quarter of the $200 billion spent annually coming from the federal coffers, according to a Senate aide who tracks labor and education.

“From a capacity perspective, federal funding serves a quarter of all individuals currently served,” the aide said. “Meeting a mandate like what the Republicans are proposing without new resources would be extremely difficult at best.”

For example, Illinois appropriated $1 million for GED preparation and testing in fiscal 2012 — a level the state has maintained for the past several years. According to the Bureau of Labor Statistics seasonally-adjusted data, there were 668,790 unemployed Illinois residents in October. The high school graduation rates for unemployed Illinoisians could not be made immediately available, but Roll Call calculated an estimate by applying the BLS’s most recent national average to the state population. Nationwide in November, approximately 16 percent of unemployed Americans did not have their high school degrees.

If that average held true in Illinois, where it costs $50 to take the GED once, it could cost $5.3 million just for those projected people to take the exam — or more than five times the state’s annual allotted budget. This does not include course fees, or the $10 to $15 it costs to retake each of the GED’s five sections if an applicant fails.

The legislative text of Friday’s bill does offer an opt-out provision for people or states that find the mandate “unduly burdensome.”

“We are creating an expectation that states must do something to help individuals most in need of additional education and training, while leaving them significant flexibility in how that is actually implemented, whether now or when state budgets are in better shape,” said a House GOP aide familiar with the bill.

But with many states facing budget crises, it’s unclear how many would be equipped to uphold the new education standards.

The House-proposed legislation also includes provisions aimed at increasing state authority to evaluate and implement their own reforms, reforming the administration of benefits and allowing states, “if they desire,” to perform drug testing on applicants as a condition of providing benefits.

The current form of the package is unlikely to clear the Senate, where Democratic sources indicate the legislation as a whole — especially because of policy riders such as one regarding the the Keystone XL pipeline — is a non-starter. Republican sources had suggested earlier in the week, even before the legislation was unveiled, that Congress did not have the kind of time it would take to implement widespread change to the UI system.

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