Laid-off workers need relief

The pain of laid-off workers – and their number – is increasing in the Bangor area. By Jan. 11, another 60 Saucony employees joined their 40 co-workers on the street. On Feb. 15, 30 Passadumkeag and Costigan millworkers will join their 262 laid-off co-workers. These unemployed workers will join the ranks of more than 660 laid-off workers from Jordan Meats in Bangor and Dexter Shoe in Dexter.

In total, this means that more than a thousand area residents are flooding the job market trying to find jobs. Given the sharp increase in health insurance rates reported by Maine businesses in recent months, many will not find a job with health insurance. And if they refuse to take a job that doesn’t offer health insurance, they will lose their unemployment insurance.

Maine Sens. Olympia Snowe and Susan Collins in a recent column (BDN, Dec. 22-23) portray themselves as working “very hard” through “principled negotiation and compromise” to bring worker-relief legislation to laid-off workers, but Senator Majority Leader Tom Daschle, D-S.D. “would not allow” this to happen. Unfortunately for too many Maine families, our senators are practicing partisan politics and, sadly, seem out of touch with the reality of laid-off workers.

Nearly two months ago, Sens. Snowe and Collins voted against worker-relief legislation to come to the Senate floor for consideration. The Senate Finance Bill would provide a 75 percent direct subsidy to laid-off workers to help pay for continued health care coverage; extend unemployment benefits and expand the number of workers who qualify for benefits; provide fiscal relief to states to help meet critical needs; and provide federal spending for infrastructure jobs. The so-called “Centrist package” negotiated by Snowe and Collins (HR 3529) passed the House with only nine Democrats voting for it, and garnered the support of only three Senate Democrats – clearly more partisan than centrist. While there are some good measures in the “Centrist Bill,” it falls well short of addressing the real needs of laid-off workers.

Unfortunately, the Centrist Bill is largely geared to those who need it least. The Center for Budget and Policy Priorities (CBPP) states that it gives 77 percent of its tax money to corporations and the most wealthy.

Under federal and state law, Maine’s laid-off workers have “COBRA rights” to 18 months of continued health insurance under their employer’s plan at a cost of 102 percent of the premium. Family health insurance costs on average $700 to $800. Unemployment insurance is – at maximum – $272 a week, or $1088 a month. With rent, food and other bills, laid-off workers simply can’t afford to pay COBRA health insurance.

The Senate Finance Bill offered a simple and effective way to help workers make their COBRA payments to health insurance companies. A system already exists to communicate with workers about COBRA eligibility and cost. The Senate Finance Bill would simply require that that COBRA notice include information about the 75 percent subsidy. For example, if the monthly premium is $700, the notice would inform the worker that due to the federal subsidy, the worker’s cost would be only $175. Once the worker pays their 25 percent share, health insurance companies would be legally required to maintain that worker’s coverage and would collect the remaining 75 percent from the federal government. (The truth is far from the Snowe and Collins description of this needing “six, nine or even 12 months for the federal government to set up a new bureaucracy…”) In fact, no new system or bureaucracy is required and workers could continue their coverage without interruption. The only new process would be to cut checks for the subsidy and distribute them to insurance companies on behalf of the many laid-off workers enrolled in their plan.

Switching the burden, Snowe and Collins make it complicated for workers, but easy for health insurance companies. For Snowe and Collins, it is the laid-off worker who must first pay the health insurance company, then get the federal government to send them a reimbursement check. When a laid-off worker applies for unemployment benefits, they would also apply for a 60 percent tax credit. They would need to prove that they had paid the health insurance company. Then they would wait.

The Snowe-Collins plan is even more difficult for workers without COBRA rights, who are forced to go through a whole new set of bureaucratic hoops and hope for coverage in the flawed, private non-group market. Only then, after finding affordable coverage in the private market, can laid-off workers begin the process of getting their federal subsidy.

The Senate Finance Bill also included measures to increase the unemployment compensation by a modest amount – 15 percent or $25 a week. Again, Collins and Snowe voted against this proposal and their bill fails to have such measures.

Snowe and Collins are much more generous to the wealthy and corporations. For instance, there’s a tax break for corporations with foreign subsidiaries. There’s also a reduction in employer pension contributions. But for middle-income Americans, there is very, very little. According to the CBPP, a married couple with two children that makes $65,000 a year would receive nothing from the tax cut. By contrast, a married filer with income of $135,000 or above would receive $1,300 in 2002 and nearly $4,000 over four years.

The gap between the “haves” and the “have nots” steadily increases in our nation. According to the Congressional Budget Office, from 1979 to 1997 the average after-tax income of the richest 1 percent increased a whopping 157 percent. Meanwhile the bottom 20 percent in income actually shrank. This is not good. Snowe and Collins will make this problem much worse.

In addition, tax cuts of this kind do not stimulate the economy. People with lots of money don’t usually spend the extra bit they get – they don’t need to, so they save it.

Poor people spend every penny to survive. If we want to stimulate the economy during the recession, we need to get the money into the economy now. The CBPP states that 77 percent of the $60 billion tax reduction would come after 2002 – thus providing little stimulus to our current economic problems.

Sen. John Breaux, a co-sponsor of the Centrist Coalition Bill, had this to say about the last-minute maneuvering of Republicans on the stimulus bill: “It serves no one to bring up in the last few hours a very complicated package only for political purposes when we know that the votes are not there.” Despite this, Snowe and Collins attack Sen. Daschle in the beginning middle and end of their recent BDN column for not being “serious about helping our unemployed workers” and exercising poor “judgment.” Sen. Collins’ staff has also publicly attacked officers of the Bangor Central Labor Council with misleading and erroneous information. Maine deserves much better than this. We will not be

misled by personal, attack politics.

At a roundtable discussion in Bangor on Jan. 9, Sen. Snowe told members of the Central Labor Council that she would seriously consider elements of the Senate Finance plan – in particular, having health insurance companies be responsible for getting money from the federal government – not laid-off workers. Further, we believe Sen. Collins should follow her lead. For more than a thousand families in the Bangor area, such changes in the senator’s position would make

a huge difference.

Roxanne Munksgaard is the vice president of the Greater Bangor Area Central Labor Council.