Senate Democrats

President Obama’s Budget Spurs Job Creation and Strengthens Our Workforce by Supporting American Workers

President Obama recently released his budget request for Fiscal Year 2011.  The budget seeks to restore economic growth and opportunity, create jobs in the short- and long-term, and reduce the deficit in half by 2012.  The Obama Administration seeks to support the creation of good, 21st Century jobs for Americans who are looking for work.  These jobs will support families with adequate pay, and promote safe and healthy workplaces. 

Strengthening the American Workforce

Too many Americans have lost their job.  Since the start of the recession in December 2007, the nation has lost more than eight million jobs and the national unemployment rate skyrocketed from 5 percent to 10 percent. [Bureau of Labor Statistics, Employment Situation]  President Obama’s budget proposal recognizes the importance of investing in programs that stabilize, strengthen and support the American workforce. 

Specific sectors of the economy have been hit especially hard.  Individuals in the construction and manufacturing sectors have experienced significant job losses.  Roughly 1.6 million jobs have been lost in the construction industry since the recession began. [Bureau of Labor Statistics, Employment Situation]  Manufacturing jobs have also disappeared during the recession.  Since the recession began 2.1 million individuals have lost their manufacturing jobs. [Bureau of Labor Statistics, Employment Situation]  Democrats are working to restore these jobs and create new opportunities in clean energy and technology-oriented positions that will be the jobs of the future. 

Worker training initiatives will help prepare workers for opportunities in the 21st Century workforce.  Many Americans have found that job opportunities available during their entire careers are no longer available.  New types of jobs are replacing ones that previously supported many families.  The President’s budget will invest in job training to ensure American workers gain the necessary skills to perform newly created jobs, especially in high-growth and emerging industries. 

Unemployment insurance has been a lifeline for families barely able to support their families while struggling to find a job.  In January 2010, the number of individuals who were unemployed for 27 or more weeks grew to 6.3 million.  This means that 41 percent of unemployed workers were without work for at least the last six months. [Bureau of Labor Statistics, Employment Situation]  The work of the 111th Congress to extend unemployment insurance for individuals suffering from sustained unemployment significantly contributed to the well-being of millions of families.  The budget proposal recognizes the importance of increasing resources for states to provide unemployment insurance while aggressively managing the proper distribution of these critical funds.

Investing in Job Creation

Recognizing the economic challenges facing millions of American families, the President’s budget lays a foundation for economic growth, job creation and long-term prosperity.  The budget includes a number of proposals that would directly spur job creation.  The President’s budget proposal would:

Help small businesses.  Small businesses have been especially hurt by the recession, accounting for 85 percent of all job losses in the last year.  The President’s budget recognizes the key role small businesses will play in the recovery of our economy.  Unfortunately, small businesses are finding it difficult to access credit.  The budget would provide $17.5 billion in SBA7(a) loan guarantees to help small businesses maintain and expand their businesses.  It would also increase the maximum loan size from $2 million to $5 million for 7(a) business loans.  The President’s budget proposes to eliminate the capital gains tax on long-term investments in many small businesses to encourage investment and growth.

                                                                                        

Extend the Making Work Pay tax cut.  Last year, the Recovery Act provided 95 percent of working households a pay increase with a Making Work Pay tax credit.  The President’s budget would extend this tax cut for one year, which would help individuals struggling to provide for their families and encourage consumer spending.  

Promote American exports.  The President’s budget would provide a 20 percent increase to the Commerce Department’s International Trade Administration.  This funding would promote American exports to new markets and reduce barriers to sales.  These initiatives will help American businesses expand their customer-bases and encourage increased production. 

Invest in research and development.  Investments in research and development can lead to innovative and successful developments in health, science and energy that promote long-term economic growth.  The President’s budget invests $61.6 billion in civilian research and development, including funding for energy initiatives to discover new ways to produce, store and use energy.  The budget also supports research at the National Institutes of Health (NIH) and would support more than 300,000 scientists and researchers stationed around the country. 

Promote the success of regional economies.  The President’s budget supports the creation of regional innovation clusters to enhance the performance of regional segments of economic activity.  The budget also includes proposals to promote regional coordination of resources and job training initiatives for efficient and targeted job creation.  

Support rural America.  The President’s budget promotes economic growth and job creation to support rural communities.  Funding for the U.S. Department of Agriculture would support the Rural Innovative Initiative and renewable energy programs in rural communities. 

Supporting Workers and Encouraging Innovation

The budget request reflects the President’s priorities for the Department of Labor (DOL).  The budget invests in worker training programs to assist the unemployed and those seeking new skills, promotes collaboration with the Department of Education to encourage more effective training, supports increased oversight of unemployment insurance to direct help to those who need it most, and encourages the expansion of paid family leave.

The President’s budget proposal would: 

Increase access to Unemployment Insurance (UI) programs.  In the 111th Congress, access to unemployment insurance was extended to accommodate the growing number of individuals who lost their job and were facing lengthening and indefinite unemployment.  The President’s budget recognizes the growing need of states, many of which have depleted their unemployment benefit funds, to receive federal support to continue providing unemployment insurance.   This support will help families get through these tough and uncertain times.  The President also recognizes the need for improved oversight to reduce the amount of improper UI payments to individuals who do not qualify.   

Reform the Workforce Investment Act (WIA).  The President understands that Americans need high-quality job training throughout their careers, especially as the economy grows and new types of jobs become available.  WIA supports nearly 3,000 One-Stop Career Centers and other job training support services.  These services help individuals who have lost their jobs or those who would like to re-enter the job market and need to learn new skills.  The budget proposal provides $6 billion at DOL and $4 billion at the Department of Education to improve WIA to meet the needs of the 21st Century workforce.  The budget calls for investments in two innovation funds (see below) and the reforms would encourage regional approaches to match job training opportunities with local demand for specialized skills. 

Create a Workforce Innovation partnership with the Department of Education.  The budget emphasizes innovation to improve program performance and proposes a Workforce Innovation Fund and a Youth Innovation Fund within the Employment and Training Administration (ETA).  These funds would encourage the development of new ways to provide improved job training and placement services to a larger number of workers and youth.  The ETA would partner with the Department of Education to encourage innovation and deliver services more effectively and efficiently. 

Begin an initiative to stop the misclassification of employees as independent contractors.  Workers may be denied access to important benefits and protections if they are misclassified as independent contractors.  Independent contractors are not entitled to receive overtime or unemployment benefits.  Such misclassification can also cost the government significant amounts of revenue.  President Obama’s budget would create a partnership between the Departments of Labor and Treasury to enforce the laws, and identify and discourage misclassification of employees as independent contractors. 

Expand access to paid leave for families.  Many families struggle to manage family and work responsibilities, especially with the arrival of a new child or when an elderly parent is sick.  Even though the Family and Medical Leave Act (FMLA) permits workers to take unpaid time off to accommodate family responsibilities, many families cannot afford to take unpaid leave.  The budget creates a $50 million State Paid Leave Fund that will provide grants to states that establish paid-leave programs.  These grants will pay for the start-up costs of such initiatives and promote additional support for families. 

Increase funding for worker protection programs.  The budget proposes an increase of roughly $69 million to strengthen worker protection programs.  This boost in funding will permit worker protection programs, which were underfunded during the Bush Administration, to return o Fiscal Year 2001 staffing levels.  These additional resources will help protect the health, safety, wages and working conditions for American workers.

Increase funding for the Bureau of International Labor Affairs.  The budget proposes an increase of approximately $22 million for the Bureau of International Labor Affairs (ILAB).  This division promotes good labor policies and labor rights in other countries and works to protect vulnerable workers, including women and children.  The increased funding will allow the ILAB to expand its worker rights programs, support the negotiation and enforcement of labor agreements with other countries and conduct additional research on labor conditions and workers rights.