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Proposal would be part of Biden budget, sets minimums for worker eligibility, benefits and access.

PMG PHOTO: JAIME VALDEZ - U.S. Sen. Ron Wyden The acting director of the Oregon Employment Department and the leader of a national advocacy group praised a proposal by U.S. Sen. Ron Wyden and others to make some changes in the unemployment benefits system.

The system dates back to the Great Depression in 1935. It is overseen by the U.S. Department of Labor but run by the 50 states, which draw benefits from payroll taxes paid by employers into trust funds. Although states have separate trust funds, they are accounts within the U.S. Treasury.

Wyden, the Oregon Democrat who leads the Senate Finance Committee, and Democratic Sens. Sherrod Brown of Ohio and Michael Bennet of Colorado introduced the proposal Monday, Sept. 27. It is intended to be incorporated into the budget resolution that will fund the Build Back Better plan sought by President Joe Biden to expand the nation's social safety net. Democrats, who hold thin majorities in both chambers of Congress, are still hashing out details.

"We look forward to these common-sense reforms that will help the unemployment insurance program be an adequate safety net throughout the nation," David Gerstenfeld, acting director of the Oregon Employment Department, told reporters in a conference call Wednesday, Sept. 29.

"Oregon's unemployment insurance system already provides a safety net and most of these issues are already covered, although some adjustments would need to be made."

Rebecca Dixon, executive director of the National Employment Law Project, said the current system makes it harder for women, some racial and ethnic minorities, and workers with disabilities to qualify for and obtain benefits.

"This proposal is a first step in transforming the unemployment insurance system to benefit all unemployed people whether the country is experiencing good economic times or bad," she said in a statement.

"We applaud Sen. Wyden for heeding the call of unemployed people and advocates across the country by proposing critical reforms that continue to provide a lifeline in this pandemic and economic crisis and begin to address key ways the Unemployment Insurance system disproportionately excludes" some workers.

The Finance Committee has authority over all tax legislation, including unemployment benefits.

What the bill does

The bill would ensure that states cover 26 weeks of benefits and part-time workers, and ensure states are not able to shortchange workers by determining eligibility based on old wage records.

Gerstenfeld said Oregon and most states already set 26 weeks of benefits from their trust funds; a handful of states do not. He said Oregon has a temporary rule, which was in effect during the pandemic, that allows workers to earn and retain some money before his agency reduces unemployment benefits.

He also said Oregon has updated how agency officials determine eligibility for benefits based on wage records.

The federal bill also would improve administration of unemployment insurance by requiring, for example, states to accept electronic applications, make applications mobile-friendly and ensure accessibility in multiple languages.

Gerstenfeld said Oregon took steps in that direction during the pandemic, although the agency had to develop work-arounds because of a computer system that dates back to 1993 and is based on a programming language that dates back to 1959.

The agency is embarked on a modernization project reauthorized by Oregon lawmakers in the current two-year budget.

Wyden has been working on changes to the system since the start of the pandemic, when Oregon's number of unemployment claims in a few months created huge backlogs. Similar pileups occurred in every state.

He called the latest proposal a "down payment" on other changes he would like to see, such as automatic triggers for benefits when average unemployment rates reach specified levels. Gerstenfeld said such a step would allow states to prepare for more orderly payments.

"Importantly, it would slow the race to the bottom on benefits, ensuring six months of benefits and coverage for part-time workers," Wyden said. "It would also take significant steps forward to improve administration of the unemployment insurance system, which would help combat fraud by criminal syndicates. This system has been intentionally broken to minimize the numbers of jobless workers who can access it, and we're going to take significant steps toward fixing it."

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