Mr. LESSER. We think there should be a program for extended benefits but we think the extended benefit provision in this House bill is detrimental to the existing program because it says to a State, as I indicated, "Why, don't bother to improve the duration of your benefits and require the taxpayers in the State to pay 100 percent of the costs, when the Federal Government has a program on the books which will pay 50 percent of the costs whenever your unemployment increases in your State."

far

Senator WILLIAMS. Perhaps I misunderstood him, but I understood Mr. Meany, when he was testifying, to feel that there were many worthwhile provisions in the House bill, but he thought they did not go enough. But I gather from your testimony you think the provisions of the House bill are not any good anyway.

Mr. LESSER. NO, I think on balance we would prefer no bill. I think the provisions of the House bill extending coverage to nonprofit institutions, to State hospitals and educational institutions are good provisions. We do not think the House bill goes far enough in extending coverage, but we think the provisions on coverage are good provisions. However, we think on the other side the provisions which give to the States a disincentive to improve their laws are so bad that in balance we would prefer no bill.

The CHAIRMAN. If I understand it, your feeling on the question of extended benefits is that the House bill trigger mechanism providing extended benefits under certain circumstances would actually discourage the States from extending benefits for a longer duration on their own volition.

Mr. LESSER. That is right. If you pick up wherever the State duration is exhausted regardless of how short a period it is, if you say "You States have a responsibility for the first 26 weeks, we will assume a responsibility for the 27th week on," then you are not-and get the States to fill that 26-week gap, we think that would be good, we would prefer it without a trigger, but we think that a program on that basis would be good.

But if you say to a State, "If you are only providing 14 weeks, we will come along and provide an additional 7 weeks and pay 50 percent of the cost of those 7 weeks," why should a State extend its duration from 14 weeks, beyond 14 weeks, and require its taxpayers to pay 100 percent of the cost. That is the essence of our position.

The CHAIRMAN. Senator Anderson.

Senator ANDERSON. I just want to be sure that you prefer no bill at all to the House bill.

Mr. LESSER. That is right.

The CHAIRMAN. Thank you very much, Mr. Lesser.

The next witness will be Mr. John A. Williams, Associated Industries of New York State.

STATEMENT OF JOHN A. WILLIAMS, ASSOCIATED INDUSTRIES OF NEW YORK STATE

Mr. WILLIAMS. Mr. Chairman and members of your honorable committee, my name is John A. Williams, and I appear before your committee as a representative of the Associated Industries of New York State, the Empire State, to discuss the unemployment insurance

amendments of 1966, H.R. 15119, with you. I am a member of the State Advisory Council on Employment and Unemployment Insurance, under appointment by Governor Rockefeller, and am, and have been for many years, a member of the Unemployment Insurance Committee of Associated Industries, as well as being a member of other unemployment insurance committes and groups.

Associated Industries is the manufacturers association of New York and its members provide more than one-half of the factory employment in the State. Its membership includes all categories of manufacturing, large and small, with geographical representation from all sections from Jones Beach to the St. Lawrence River, and from Niagara Falls to Broadway.

Mr. Joseph R. Shaw, president of Assoicated Industries, who is sorry he could not attend today, submitted a statement to the House Ways and Means Committee on August 20, 1965, in opposition to many of the features of H.R. 8282, a bill which could have had serious repercussions upon the future course of a stable unemployment insurance system in this State and in the Nation. The House Ways and Means Committee weighed all of the pros and cons of the proposed legislation and drafted a substitute bill, H.R. 15119, which, in our opinion, is far superior to its predecessor.

We appreciate the fact that much of our legislation is based upon compromise and that H.R. 15119 is no exception to the rule and we extend our endorsement of the bill upon this basis, with further comment upon three of its features:

EXTENDED BENEFITS

On January 5, 1961, the directors of Assoicated Industries adopted a resolution approving legislation providing for extended benefits for 13 weeks on a "trigger point" basis to claimants who had exhausted their 26 weeks of regular benefits. Such legislation was passed by both houses of the legislature and approved by the Governor, hence our endorsement today of a similar sort of provision in H.R. 15119. I want to point out that back as far as January 5, 1961, 24 directors of this group, the Manufacturers Association of New York, did vote to approve of a provision of extended benefits almost identical to what is included in H.R. 15119. This New York bill later expired by statutory limitation. It is not now on the books, but it was.

WAGE BASE

Our position through the years has been that an increase in the wage base in New York was not necessary on account of the sound financial condition of New York's unemployment insurance fund, and our endorsement of the increase in the wage base from $3,000 to $3,900 in 1969 and to $4,200 in 1972 has been predicated upon the expectation that when the new wage base figures are adopted by the State Legislature of New York that corresponding adjustments will be made in the tax table, section 581-2 of the New York State unemployment insurance law. We appreciate, of course, that this interpretation may be beyond the scope of Federal legislation but we do wish to go on record that the adoption of a revised wage base should be accompanied by a revision in the tax table.

The condition of a State's unemployment insurance fund, of course, determines the measure of the revision advisable in the tax table. New York's fund is and has, over the years, been in a good sound condition. As of July 1, 1966, New York's fund amounted to $1,367,978,611. Those figures are so big I cannot believe them. This amount would be sufficient to pay benefits at the highest annual rate so far ($502,447.253 in 1958) for a period of about 2 years and 8 months, without consideration being given to interim tax receipts. These figures visualize the measure of the solvency of New York's fund.

There is attached exhibit 1, a summary of the financial transactions of New York's fund from the first year of collections to April 1, 1966, which was extracted from the State's labor department publication, Operations.

I commend this table to you for careful consideration because it tells quite a story. I would like to say that in New York we may have 50 percent of wages up to the maximum of $50 a week. In New York the average weekly wage is now about $118, and our maximum is $55 or a half of $110, and we are just about half now, and I imagine that the legislature next year will up it to $60 to bring it in line, because we have had this idea of 50 percent in mind all the way through, and we think it is much better to let the State handle it than to have the Federal Government set up these percentages.

I would like to say, also, that our benefit formula starts at about two-thirds in the lower wages, and none of our figures is less than 50 percent, and most of them below the maximum are more than 50 percent of the claimant's weekly wage.

JUDICIAL REVIEW

This provision is a great step forward in restoring equity to the administration of the unemployment insurance law, and we unqualifiedly endorse it.

I appreciate this opportunity to appear before you and I respectfully urge that the members of this committee and the other members of the Senate ratify the House action on H.R. 15119.

(The attachment referred to follows:)

TABLE 8-A.-Status of unemployment insurance fund-Summary of financial

610, 421, 379 840,376,338 987, 754, 967 978, 109, 139 1,067, 073, 601 1,055, 655, 766 887,033, 127 904, 616, 065 1,060, 515, 637 1, 191, 004, 694 1,311,984, 580

1, 267, 384, 177 1. 273, 091, 814 1,305, 824, 809 1, 355, 730, 196 1, 121, 588, 210 1,027, 466, 198 999.027,670 962, 548.083 1. 102, 497.934 1, 159, 110, 982

1, 170, 936, 606

1,088, 077, 509 1, 161, 106, 221 1,214, 124, 085 1. 170.936, 606 1,304, 517, 706

1, 102, 506, 916 1, 216, 129, 733 1,298, 074, 509 1,304,517,706

288, 324, 512

The CHAIRMAN. Senator Anderson.

Senator ANDERSON. Do you remember when the unemployment compensation law took effect?

Mr. WILLIAMS. The taxes started in 1937. The benefits started in 1939.

Senator ANDERSON. Do you think the $3,000 base then was satisfactory?

Mr. WILLIAMS. Well, of course, at the start we had-one year we excluded everything over $3,000, but one time we had the total wage. I cannot tell you the exact amounts, but those came in those earlier years, when benefits were not paid. The $3,000 came in 1939 when the Social Security Act was passed or was amended and at that time they conformed the unemployment insurance figure to the social security figure.

Senator ANDERSON. Now, $3,000 then is about equivalent to $9,000 today or more. Would you use that sort of a base now?

Mr. WILLIAMS. Well, the $3,000, sir, was primarily and solely a means of determining tax liability, and it is just as effective today for that purpose as it was in 1939.

Senator ANDERSON. It had no effect upon funds then.

Mr. WILLIAMS. The funds are governed by the amount of your tax rate. Of course, there are two things that determine the total tax collections, the base and the rate. You can use $3,000 indefinitely if you wanted to, and let the rate go up, but we are not objecting to the increase in the base of $4,200 at this time.

Senator ANDERSON. That is all.

The CHAIRMAN. Fine. Thank you very much, sir.

The next witness is Mr. Glen P. Woodard, Jr., of the Associated Industries of Florida.

STATEMENT OF GLEN P. WOODARD, JR., CHAIRMAN, BOARD OF DIRECTORS, ASSOCIATED INDUSTRIES OF FLORIDA

Mr. WOODARD. Mr. Chairman and Senators, my name is Glen P. Woodard. I reside in Jacksonville, Fla. I appear before you today in behalf of Associated Industries of Florida, of which I am chairman of the board of directors, the Florida Council of 100, the Florida Retail Federation, the Florida State Chamber of Commerce, and the Florida Trucking Association. These groups represent the employers of approximately 71 percent of the covered workers of Florida.

We wish to express our support of H.R. 15119 which came to the Senate and your committee with the strongest endorsement the House has given a major employee benefit measure in years. The House Committee on Ways and Means, following weeks of laborious study, offered this measure as a substitute for H.R. 8282, the companion to S. 1991 pending before this committee. The House then recorded a vote of 374 to 10 in favor of H.R. 15119. These affirmative votes came after in-depth analysis and review not only of H.R. 8282, but the entire Federal-State partnership which operates the unemployment compensation programs of this Nation.

The vehicle originally before the Ways and Means Committee was H.R. 8282 which contained some of the most far-reaching provisions ever advanced in the Congress as to unemployment compensation, coverage, benefits, duration, eligibility, and tax structure. These provisions would have, in the opinion of many qualified students of the program, gone far to totally destroy the "partnership" aspect of the program or at best, allow the States to remain in the partnership but with no vote. We all know the importance of "silent partners."

In Florida, as in most States, we have subscribed to the theory of the Federal-State partnership. But, Mr. Chairman and Senators, it is most disturbing to us when unilateral decisions are made by one partner-contrary to the views of the other-as to what the basic goals of the system are.

Whose basic goals shall we consider as being most representative of the needs of the unemployed, and the employed, for that matter? Shall we completely overlook the highly commendable record compiled by the States which every 2 years place their respective programs