Statement About the Emergency Unemployment Compensation Bill

YESTERDAY I signed into law H.R. 6065, which in its major provision enacts the Emergency Unemployment Compensation Act of 1971. Additionally, it makes technical changes in the way certain unemployment insurance funds can be used by State governments.

The major provision extends unemployment benefits for an additional 13 weeks for workers whose existing benefits have been exhausted and who live in States where the unemployment rate is high.

I have signed this legislation because it will help to ease the transition of workers adjusting from the wartime to a peacetime economy, and because I recognize that during the winter months employment prospects are often limited. Approximately 750,000 workers will have their incomes maintained for up to 52 weeks under the provisions of this law.

In signing this act, however, I would emphasize that I endorse it only as a temporary expedient and not as the best or soundest method of helping the unemployed nor as a precedent for future legislation.

The Congress has also indicated a concern about the desirability of continuing this program. The bill requires the Secretary of Labor to conduct a comprehensive review of the program and to submit a report to the Congress by May 1, 1972, commenting on the desirability of continuation.

The major reason for my misgiving is that this legislation undermines the insurance concept of the unemployment compensation program. Under the present system, employers contribute to a trust fund which is used to provide income assistance to those who are temporarily out of work. H.R. 6065 would, in effect, draw the estimated $454 million needed to fund this program from the general treasury.

To require the general taxpayer to bear the costs of this program means a sharp departure from the previous practice under which employer taxes have been used to finance such aid. In essence, this legislation does not set up a program of unemployment insurance in which funding is related to employer experience with unemployment; instead, it sets up another program of public welfare.

In addition, by limiting the program to selected States, the present legislation discriminates against those similarly situated workers in other States and inhibits the labor mobility which could also ease long-term unemployment.

I have asked the Secretary of Labor to prepare promptly alternatives to this program, in the event one is needed, which would be properly financed and would distinguish between short- and long-term problems and their effective solution.