ACTION ON CONGRESSIONAL RECOMMENDATIONS Recommendations, House Appropriations Committee House Hearings before the Subcommittee on Departments of Labor and Recommendations, Senate Appropriations Committee Senate Hearings before the Committee on Appropriations, Supplemental The Manpower Administration has taken a number of steps in recent months to improve its estimates of benefits for Federal employees and ex-servicemen. First, it has established a group of actuaries and statisticians who will spend full time on these estimates and on other estimates that are required as part of the budget process in the unemployment area. This group is now reviewing the methods used in developing estimates in order to identify and eliminate weaknesses. Second, the Manpower Administration is seeking the assistance of an outside actuarial firm in this review process. The objective is to develop a methodology which, within the assumptions on which the estimates are based, will produce the most reliable result. Third, the Manpower Administration is working with the Civil Service Commission and the Department of Defense to obtain more reliable forecasts of future separations. Such forecasts are absolutely essential to reliable estimates of benefits. Fourth, the Manpower Administration is working with other organizations within the Department to improve the forecasts of future unemployment. The level of unemployment influences benefit payments in a major way. Finally, the Manpower Administration is taking steps to equip its estimating group with automatic equipment. Eventually the group will be given access to a computer. MANPOWER ADMINISTRATION ADVANCES TO THE EXTENDED UNEMPLOYMENT COMPENSATION ACCOUNT WITNESSES PAUL J. FASSER, JR., DEPUTY ASSISTANT SECRETARY FOR MANPOWER AND MANPOWER ADMINISTRATOR KOBERT C. GOODWIN, ASSOCIATE MANPOWER ADMINISTRATOR FOR UNEMPLOYMENT INSURANCE SERVICE WILLIAM R. CURTIS, DEPUTY ASSOCIATE MANPOWER ADMINISTRATOR FOR UNEMPLOYMENT INSURANCE SERVICE MINOR R. MILLER, DEPUTY DIRECTOR, OFFICE OF STATE OPERATIONS, UNEMPLOYMENT INSURANCE SERVICE DAVID L. EDGELL, DEPUTY DIRECTOR, OFFICE OF ACTUARIAL AND RESEARCH SERVICE, UNEMPLOYMENT INSURANCE SERVICE ALFRED M. ZUCK, ACTING ASSOCIATE MANPOWER ADMINISTRATOR FOR FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS ROBERT C. HARDEN, DEPUTY CHIEF, DIVISION OF BUDGET, OFFICE OF FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS CONRAD M. JONES, DEPARTMENTAL BUDGET OFFICER Mr. FLOOD. Now we go to the "advances to the extended unemployment compensation" account. This presentation will be made by Paul J. Fasser, Jr., Deputy Assistant Secretary for Manpower, and Manpower Administrator. BIOGRAPHICAL SKETCHES OF WITNESSES (The biographical sketches follow :) BIOGRAPHICAL SKETCH OF PAUL J. FASSER, JR., DEPUTY ASSISTANT SECRETARY. OF LABOR FOR MANPOWER AND MANPOWER ADMINISTRATOR Paul J. Fasser, Jr., was appointed Deputy Assistant Secretary of Labor for Manpower and Manpower Administrator in October of 1970. He joined the U.S. Department of Labor after 19 years with the United Steel workers of America. Mr. Fasser started with the Steelworkers Union in April of 1951 as a research associate in the research department, moved to the arbitration department in 1963 as a contract and arbitration technician, and became assistant director of the contract administration department in 1967. Among his major responsibilities with the Steelworkers were those of administrator and manager of the major operating section of the contract administration department; membership on numerous standing union-basic steel industry committees such as testing, apprenticeship, contract language review and benefits. In addition, he functioned as the international representative on several innovative programs which include the Kaiser long-range sharing plan, the Alan Wood joint economic expansion plan, and the basic steel earnings protection plan. He was the technical coordinator of the can and aluminum industry, negotiating conferences and acted as union consultant to the USWU.S. Steel Board of Arbitration. He was educated in the public schools of Farrell, Pa. While working summers at the Steelworkers headquarters offices in Pittsburgh, he attended Grove City College, the University of Pittsburgh where he studied business administration, and the New York State School of Industrial and Labor Relations of Cornell University where he received his bachelor of science degree in industrial and labor relations in 1951. A World War II veteran, he served in Europe with the 45th Infantry Division. Born June 15, 1926 in Gary, Ind., Mr. Fasser is married to the former Mae A. Carino of Pittsburgh. The couple has three children and make their home in McLean, Va. ALFRED M. ZUCK, ACTING ASSOCIATE MANPOWER ADMINISTRATOR FOR FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS Alfred M. Zuck is the Acting Associate Manpower Administrator for Financial and Management Systems. In this position, Mr. Zuck is responsible for establishing policy for planning, developing, and administering a financial and management information system for manpower programs. Prior to assuming this position, Mr. Zuck served as Director of the Office of Evaluation of the Manpower Administration where he was responsible for the program evaluation of the effectiveness of all manpower training, work experience, and job programs operated by the Department of Labor. Mr. Zuck entered Federal service in July 1958 as a management intern in the Office of the Assistant Secretary for Administration, Department of Labor. He has since served in a variety of administrative management positions with the Department, including, Deputy Assistant Manpower Administrator for Administration-sharing in the full range of administrative management activities for the Manpower Administration, including budget, financial management, personnel and management analysis. Mr. Zuck also served as Director of Federal Programs with the President's Council on Youth Opportunity. In 1970 Mr. Zuck was chosen to receive the William A. Jump Memorial Award. This award is presented annually to the two most exceptional young men in Federal service in recognition of their outstanding contributions to the field of public administration. A native of East Petersburg, Pa., Mr. Zuck graduated from Franklin and Marshall College with an AB degree, magna cum laude, in 1957. He took his master's degree in political science with distinction at the Maxwell School of Syracuse University in 1958. He is a member of Phi Beta Kappa, Phi Gamma Mu, and Kappa Sigma. Mr. Zuck is married and has two children. They reside in Vienna, Va. BIOGRAPHICAL SKETCH OF CONRAD M. JONES, DIRECTOR, OFFICE OF BUDGET Mr. Conrad M. Jones has served as Director, Office of Budget, Office of the Assistant Secretary for Administration, since August 1968. From July 1965 to August 1968 he served as Deputy Director. Prior to his service in the Department of Labor, he served as a supervisory budget analyst at the Federal Aviation Agency from 1960 to 1965. Mr. Jones served as a fiscal management officer from 1957 to 1960 with the Housing and Home Finance Agency. He entered Government service in 1939 with the National Capital Housing Authority holding increasingly responsible positions in the field of financial management, including comptroller from 1953 until 1957. Born on December 30, 1916, in Little Rock, he attended public schools in Joplin and Kansas City, Mo., and received a B.C.S. in 1942 and a M.C.S. in 1943 from Benjamin Franklin University in Washington, D.C. Mr. Jones interrupted his civilian employment to serve for 2 years in the U.S. Army in World War II, participating in three European campaigns. He and his wife, the former Catherine L. Dent, reside in Rockville, Md., and have three children: Conrad M., Jr., Mrs. Michael L. Hemmis, and Mrs. Stephen Shaw. WILLIAM R. CURTIS, DEPUTY ASSOCIATE MANPOWER ADMINISTRATOR FOR Mr. Curtis was appointed to his present position as Deputy Associate Manpower Administrator for Unemployment Insurance in August 1970. He has worked in the employment security system for the majority of his working life and the positions he has held include: Regional Manpower Administrator for the Philadelphia region; Comptroller, Manpower Administration; Deputy Administrator, Bureau of Employment Security; Executive Secretary, Interstate Conference of Employment Security Agencies, and Chief, Administrative Standards, Bureau of Employment Security. Mr. Curtis is a native of Franklinville, N.C. He received a B.A. and M.A. from the University of North Carolina and a PhD. from the University of Illinois. He is married and has three children. Mr. FLOOD. I see you have a statement on this as well. Mr. FASSER. Yes, sir; I have a short statement. Mr. FLOOD. You may proceed. GENERAL STATEMENT Mr. FASSER. Mr. Chairman and members of the committee, this request is for a $120 million appropriation to the extended unemployment compensation account in the unemployment trust fund, a reduction of $480 million from the 1972 appropriation. This account was established by Public Law 91-373, the Employment Security Amendments of 1970. It provides for the Federal share of extended employment insurance benefits. Normally these benefits are financed from Federal Unemployment Tax Act receipts earmarked for this purpose. However, receipts from this employer tax will not be sufficient to meet the full amount of extended benefit payments. When this occurs the law authorizes us to request a general revenue appropriation for the amount of the deficit which is to be repaid without interest when receipts are sufficient. The $120 million appropriation request to cover the fiscal year 1973 deficit has two components. The first of these components is extended benefits in individual States during periods of high State unemployment, as specified in Public Law 91-373. Trends indicate that 16 States will meet this criteria for a "State trigger." It is estimated the Federal share of the Federal-State extended-benefit program will be $152,000,000 with an estimated revenue of $129 million which leaves a deficit of $23 million to be funded from general revenue. The second component is a further extension of benefits as authorized by Public Law 92-224, the Emergency Unemployment Compensation Act of 1971. These benefits are fully financed by Federal funds. It is estimated that 17 States will qualify for these benefits, since claimants who were determined eligible for temporary benefits prior to June 30, 1972, but who had claimed less than their maximum entitlement under the act of 13 weeks will be permitted to claim such benefits up to September 30, 1972. It is estimated that $97 million will be required for this purpose. The national program for Federal-State extended benefits is not expected to be "triggered on" because the rate of insured unemployment is not expected to exceed 4.5 percent, seasonally adjusted, for a period of 3 consecutive months. In 1973, no advance from general revenue funds will therefore be needed to make reimbursements to the States for a national program of extended benefits. In conclusion, let me emphasize that this is a loan account with the legal requirement that whatever sum Congress appropriates to this account must be repaid when sufficient unemployment tax revenues become available. Mr. Chairman, I shall be happy to answer any questions. APPROPRIATION LANGUAGE PROVISO Mr. FLOOD. Here we are confronted with a pet phobia of ours. There is a language provision recommended to be put in the bill. Is it really necessary and if you think it is, why? Mr. ZUCK. That is consistent with the provision of the act that authorizes the Secretary of the Treasury to make the advances whenever notified by the Secretary of Labor. Mr. FLOOD. I know what it says. It is in English more or less. What is it there for? Mr. Zuck. To be consistent with the basic legislation, Sir. Mr. FASSER. When the tax receipts are not sufficient to provide the benefits then, Mr. Chairman, we must come to you for that money until we can make it up. Mr. FLOOD. The law already says, "To enable the Secretary of the Treasury to make such advances." Now you have, "provided"—and the same thing for appropriation language. Why? What is the priviso for? A proviso is not for the purpose of repeating what the basic law already says. Mr. Zuck. The Secretary of Treasury is not authorized to make payments on his own initiative. He is required to do it upon the certification of the Secretary of Labor. The earlier language would give the authority to the Secretary of Treasury. Mr. FLOOD. There is no doubt about that, but you don't think he would talk to the Secretary of Agriculture do you? Do we have to tell him in the appropriation bill to talk with the Secretary of Labor about this? Mr. JONES. Mr. Chairman, the Treasury Department maintains the Employment Security Administration account. When the Secretary of the Treasury determines that the fund balance is not sufficient to make these payments, then in consultation with the Secretary of Labor, he makes advances to the account out of the general funds of the Treasury, based on a certification by the Secretary of Labor as to the amounts required for benefit payments. REPAYMENT OF ADVANCES Mr. FLOOD. This term "repayable advances". That is a little bit. misleading; isn't it? Do you honestly think they will ever be repaid? Mr. FASSER. We estimate that under the schedule of the tax amount allotted for the particular benefit, this amount would be repaid in 1975. Mr. FLOOD. Tell us what would have to happen before the States would pay back these advances? Mr. CURTIS. There are two types of benefits. The Federal-State extended benefits, which are financed 50-50 by the Federal and State |