Monday, December 19, 2011

Bottom of Page 110 of the American Jobs Act, "SEC. 344. GRANTS FOR SHORT-TIME COMPENSATION PROGRAMS"

(a) GRANTS.—
(1) FOR IMPLEMENTATION OR IMPROVED ADMINISTRATION.—The Secretary shall award grants to States that enact short-time compensation programs (as defined in subsection (i)(2)) for the purpose of implementation or improved administration of such programs.

(2) FOR PROMOTION AND ENROLLMENT.—The Secretary shall award grants to States that are eligible and submit plans for a grant under paragraph (1) for such States to promote and enroll employers in short-time compensation programs (as so defined)....

It means the states receive money to administer the program to citizens because of any increased costs.  There are qualifying provisions that were already spelled out earlier and the amount the states receive is generous as far as I am concerned.  The Secretary of Labor as clarified under definitions, deducts the Department of Labor's costs in administering the program and then utilizes what remains of $700 billion in distribution to the states according to a qualifying equation.  

I would hope the states that are eligible will make a permanent information bank of participating employers so as to cut down on costs when communicating regarding any enhanced program from the State's Department of Labor.  It would be nice if such programs were not necessary at all in the USA, but, sadly that isn't the case.  Just to pay with numbers, if it cost the US Labor Department 100 billion to administer the fund (which I doubt it would cost that much), that would leave 600 billion for the states.  If each state qualified equally, each would receive $12 billion.  That does not include the territories of the USA.  All the transfers were suppose to take place October 1, 2011 to fund the program.  Over two and a half months ago.  That is not a long time for government, but, it is a long time for families.

Numbers (1) and (2) above are separate programs and are to have the monies distributed differently within state programs.  Number 1 is to receive one third of the monies while number 2 receives two thirds of the monies.  

There is a time limit to the states for applying to the Secretary that is three months after the bill was passed, notification in return by the Secretary within 1 month after receiving the application.  The Secretary would, in responding, 'certify' the state eligible and the transfer of funds to the State Unemployment Fund would take place within 7 days of that certification.  The purpose to the time limits is expediency.  

The overriding law that supports this section is:

(4) REQUIREMENT.—No certification of compliance with the requirements for a grant under paragraph (1) or (2) of subsection (a) may be made with respect to any State whose—

(A) State law is not otherwise eligible for certification under section 303 of the Social Security Act (42 U.S.C. 503) or approvable under section 3304 of the Internal Revenue Code of 1986;

Cited Law:

PROVISIONS OF STATE LAWS (click here for Section 303 of Social Security Act)
Sec. 303. [42 U.S.C. 503] (a) The Secretary of Labor shall make no certification for payment to any State unless he finds that the law of such State, approved by the Secretary of Labor under the Federal Unemployment Tax Act[7], includes provision for—


The IRS Code of 1986, Section 3004 (click here) (This citation is clear as mud, so try the one below it, but a magnification of the text is necessary.)
The Federal-State Extended Unemployment Compensation Act of 1970, referred to in subsecs. (a)(11) and (c), is Pub. L. 91–373, title II, Aug. 10, 1970, 84 Stat. 708, as amended, which is set out as a note below....

Internal Revenue Code:Sec. 3304. Approval of State laws(click here)

Ever get the idea the government doesn't really want anyone to read this stuff?


Must be me.  

This section is the best part, "Where does all the money go?"

(d) USE OF FUNDS.—The amount of any grant awarded under this section shall be used for the implementation of short-time compensation programs and the overall administration of such programs and the promotion and enrollment efforts associated with such programs, such as through—

(1) the creation or support of rapid response teams to advise employers about alternatives to layoffs;

Otherwise known as "If you don't know how to run your business, because of a global banking collapse, we'll tell you how."  I suppose this doesn't come with personal attention from Geithner.

(2) the provision of education or assistance to employers to enable them to assess the feasibility of participating in short-time compensation programs; and

(3) the development or enhancement of systems to automate—

(A) the submission and approval of plans; and

(B) the filing and approval of new and ongoing short-time compensation claims.

There is no fiscal year limitation on these funds.  That means the states do not have to return the funds as they are supposed to be used for the entire duration of the program which may be years.  What this section is hoping to do is to provide a permanent place in any state's unemployment laws for this type of unemployment insurance to be issued to recipients on furlough.  It is not a bad idea, since in years to come or when start up operations find liquidity difficult it does not mean they have to jettison employees and start all over again.  Sometimes training costs are affiliated with longevity of good employees and if businesses are faced with fiscal problems having to retrain new employees all over again may be the deal breaker to bankruptcy and permanent loss of jobs in the economy.  So, this section is an enhancement to any state's existing unemployment program that could actually save businesses and lower the cost of unemployment disbursements.  Not a bad idea if it were popular with the states themselves.

(g) FUNDING.—There are appropriated, out of moneys in the Treasury not otherwise appropriated, to the Secretary, $700,000,000 to carry out this section, to remain available without fiscal year limitation.

It is costly, but, President Obama had it paid for when he sent the American Jobs Act to Congress.  

This is the kind of thinking that helps me understand how dedicated President Obama is to the Middle Class in this country.  This is a program that is suppose to have longevity, to improve relations between the private sector and government to value the citizen as an asset to a company on a long term basis.  This is President Obama saying to the private sector, "The Federal Government along with its partnership with the State believes a business does best when it has employees that are well trained, competent and loyal."  That may seem like nothing, but, it is huge.  The way the President asks for legislation is that he expects 'permanent' fixes to the economy, not simply stop gaps.  If Congress is not committed to the same goals there won't be cooperation and they will complain about the spending.  

(h) REPORTING.—The Secretary may establish reporting requirements for States receiving a grant under this section in order to provide oversight of grant funds.

I wanted to list the definitions at least once.

(i) DEFINITIONS.—In this section:
(1) SECRETARY.—The term “Secretary” means the Secretary of Labor.
(2) SHORT-TIME COMPENSATION PROGRAM.—The term “short-time compensation program” has the meaning given such term in section 3306(v) of the Internal Revenue Code of 1986, as added by section 341(a).
(3) STATE; STATE AGENCY; STATE LAW.—The terms “State”, “State agency”, and “State law” have the meanings given those terms in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

And then even after the check is sent to the state, the federal government will be available through the same funding for help to the states to develop and administer the program.

(a) IN GENERAL.—In order to assist States in establishing, qualifying, and implementing short-time compensation programs (as defined in section 3306(v) of the Internal Revenue Code of 1986, as added by section 341(a)), the Secretary of Labor (in this section referred to as the “Secretary”) shall—
(1) develop model legislative language which may be used by States in developing and enacting such programs and periodically review and revise such model legislative language;
(2) provide technical assistance and guidance in developing, enacting, and implementing such programs;
(3) establish reporting requirements for States, including reporting on—
(A) the number of estimated averted layoffs;
(B) the number of participating employers and workers; and
(C) such other items as the Secretary of Labor determines are appropriate.
(b) MODEL LANGUAGE AND GUIDANCE.—The model language and guidance developed under subsection (a) shall allow sufficient flexibility by States and participating employers while ensuring accountability and program integrity.
(c) CONSULTATION.—In developing the model legislative language and guidance under subsection (a), and in order to meet the requirements of subsection (b), the Secretary shall consult with employers, labor organizations, State workforce agencies, and other program experts.

The oversight the Secretary of Labor will receive will also go to the Congress for feedback regarding the programs and the states' success.

(a) REPORT.—
(1) IN GENERAL.—Not later than 4 years after the date of the enactment of this Act, the Secretary of Labor shall submit to Congress and to the President a report or reports on the implementation of the provisions of this Act.
(2) REQUIREMENTS.—Any report under paragraph (1) shall at a minimum include the following:
(A) A description...

Blah, blah, blah.  It completes the circle.  The program started with legislation and it returns information to the legislative process to understand the effectiveness of it.

Continued in next entry.

Only a Bush could come up with this wisdom. (click title to entry - thank you)

...That is what economic freedom looks like. Freedom to succeed as well as to fail, freedom to do something or nothing....

Absolutely.  Even to the tune of $700 Billion US!