Mr. SHOUP. It would not be triggered in now; it would be there all the time because we never get down to 4.5 percent. So, that really it is not an emergency-type thing; it would be more apt to be in title I rather than title II.

Mr. KOLBERG. We propose this as a temporary program to last 15 months. The program would end a year from next July 1.

Mr. SHOUP. Mr. Kolberg, would you consider that if the Ways and Means Committee does not act and it becomes apparent that we do have unemployment problems directly related to energy, would you entertain any different approach than you have at the present time? Possibly trying to get it through a committee that maybe is more sympathetic to the problems at hand than the Ways and Means Committee, maybe?

Mr. KOLBERG. Mr. Shoup, I would rather not answer that kind of iffy" question.

It seems to me we really have to go through the process.

I have confidence that both Finance and Ways and Means-we now have their attention; hearings have been held in one and are scheduled in the other. We are going to try our very best to convince those committees that the need is great, the need is now, and we have an approach that will work, but a temporary program is important. I would rather wait to see how it works out. I have confidence it will work out.

Mr. SHOUP. Mr. Kolberg, again I wonder about your comment on an "iffy" question. Let us not make it an "iffy" question or an "iffy" answer. Would you consider placing the approach that you have taken, the basic approach, into this bill?

Mr. KOLBERG. That is exactly what we have been urging on the committee all along, Mr. Shoup.

The chairman was just saying to me that that seems an impossibility. We proposed that over the last several weeks. Apparently, the chairman of the Ways and Means Committee is unwilling to allow this committee to do that.

Mr. SHOUP. You would have no objection to our doing that? Mr. KOLBERG. No, indeed.

Mr. SHOUP. I have no further questions.

The CHAIRMAN. The gentleman from Washington.

Mr. ADAMS. No questions.

The CHAIRMAN. The gentleman from New York.

The gentleman from North Carolina.

Mr. PREYER. No questions, Mr. Chairman.

The CHAIRMAN. The gentleman from Ohio.

Mr. CARNEY. No questions.

The CHAIRMAN. The gentleman from Maryland.

Mr. BYRON. No questions.

The CHAIRMAN. I would say thank you very kindly for appearing before us and giving us the benefit of your views. We certainly will take them into consideration.

Mr. KOLBERG. Thank you again.

The CHAIRMAN. Mr. Clinton M. Fair, legislative representative of the American Federation of Labor and Congress of Industrial Organizations; Mr. Jack Beidler, legislative director; and Dick

Warden, assistant legislative director, United Automobile, Aerospace & Agricultural Implement Workers of America.

Will you three gentlemen take the stand, please?

STATEMENT OF CLINTON M. FAIR, LEGISLATIVE REPRESENTATIVE, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS, ACCOMPANIED BY JAMES R. O'BRIEN, ASSISTANT DIRECTOR, DEPARTMENT OF SOCIAL SECURITY, AND KENNETH T. PETERSON, LEGISLATIVE REPRESENTATIVE

Mr. FAIR. Thank you, Mr. Chairman.

The CHAIRMAN. Would you identify yourself for the record? Mr. FAIR. I will, Mr. Chairman.

On my right is Mr. O'Brien who is the assistant director of the Social Security Department of the AFL-CIO. His fields are unemployment insurance and workman's compensation.

On my left is Mr. Peterson of the Legislative Department of the AFL-CIO, whose interest has been chiefly in the other phases of the bill other than unemployment insurance.

Mr. Beidler is not here. I don't see him in the room, nor do I see Mr. Warden.

The CHAIRMAN. You may proceed, sir.

Mr. FAIR. Mr. Chairman, may I just speak informally, and we will submit the testimony we have prepared for you.

Could we have it placed in the record, sir?

The CHAIRMAN. It may be placed in the record [see p. 249].
You can read it or summarize it, or proceed as you see fit.

Mr. FAIR. Let me comment first on your bill, Mr. Chairman, and the unemployment features in it.

It is not unemployment insurance. It is unemployment assistance. It in no way changes the basic structure of our unemployment insurance legislation. It does not amend the Revenue Code under which unemployment insurance is justified as a Federal obligation. It does not in any way change the contributions of any employer. It does not change the basic benefits of any employee. It is unrelated to unemployment insurance except in one feature. You use the administrative procedures of the unemployment insurance law through the States in the administration of your unemployment assistance program.

Now, that is an experience of over 25 years. It is an experience. that has been worked out, developed in every State. There are State unemployment insurance examiners, people in every section of every State. They may not have an office in every place, but they come to small towns and small areas once a week, but people unemployed know where to go.

It is a system which has worked through the years very, very well. Now, some of the problems which arise-let me go to the testimony of the Assistant Secretary.

In using the 4.5 insured unemployment as a trigger, or the 4 and 120 percent level, we are talking about people, as Mr. Moss

brought out, who have gone of their unemployment insurance: they are not caumilated in the figures of the memployment insurabre fyres because they are not any longer employed and drawing

Moreover, the illustration that Mr. Moss was using, she wri extural labor is not covered in unemployment insurance in Callfornia. they would not be counted: they would not be counted as unemployed agricultural labor. They are not part of the system. if

On the other hand. Mr. Chairman, you bili goes to the point of why they are unemployed. And the casual relationship has to do directly with disruption caused by an energy crisis in their employ

It ought to be very clear that the figures which the administration used are not representative in many, many areas of our country. They do not include public employees in most States. If in an area or a county we lay off part of our employees who are with the highway department. because of an energy crisis, they are neither counted as unemployed nor would they necessarily be eligible under the administration's proposal.

That is why we have directed our testimony in support of your legislation because it goes to a particular energy-related situation. Now, as Mr. Rogers brought out yesterday, they changed the concept of areas as States and turned to areas of 250,000. Unless I reside in an area of that equivalency of 250,000, and if I become unemployed because of the energy crisis. I will not be eligible for the benefits under this act because I am not in an area. It discriminates against rural areas where unemployment may not be high. Now, let me point out some other features to it.

This bill which you. Mr. Chairman. have introduced in no way bars the administration asking Ways and Means on the 22d when they testify, to enact their bill. Your bill does not affect that. If the Congress puts the administration bill into effect, your bill would still supplement their bill. It would work around it, but it in no way cuts through it.

In your legislation. as I view it, you say if I am not drawing nemployment insurance benefits. I am eligible. If they draw benefits under any other part of the unemployment insurance law, they are not eligible under your proposal for benefits.

So, it is not cutting through anything. It is wrapping it around as it relates to the energy crisis.

Now. I would point out also the use of the trigger: the Congress over the past few years has had to amend the trigger legislation x different times because the trigger did not meet the situation. Right now, we are on an extended benefits procedure on an amendment added by the Senate not too long ago, and passed by the House, too, which takes through an extended benefits period to June 30 of this year.

We find the approach of the administration is not the soundest approach to the whole business of unemployment insurance.

The testimony we are now engaged in should be given before Ways and Means, and certainly not before the distinguished com

mmittee.

I would point out also that using areas has a discriminatory effect. I may be laid off outside an area which has either 4.5 percent or 4 plus 120 percent. I may be living across the street or working across the street, unemployed because of the energy crisis, and have absolutely no benefits coming under the proposal presented here this morning by the administration.

I will be glad to answer any questions that I can and to help clear anything I can clear up or maybe confuse you; I don't know which.

[Mr. Fair's prepared statement follows:]

STATEMENT OF CLINTON M. FAIR, LEGISLATIVE REPRESENTATIVE, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS

Mr. Chairman, I wish to thank you and the Committee, on behalf of the AFL-CIO, for this opportunity to present our views on the unemployment assistance legislation under consideration by the Committee.

H.R. 13834, introduced by the Chairman of this Committee-Congressman Staggers-would make available until July 1, 1975, unemployment assistance to any worker who is unemployed as a result of disruptions and dislocations of energy supplies and resources.

The unemployment assistance provisions in this legislation would provide wage loss protection against energy related unemployment to almost every working man and woman in the nation's labor force. This protection will be sorely needed in the months ahead, and the AFL-CIO urges that your Committee report favorably on H.R. 13934.

The energy crisis remains, despite the recent lifting of the oil embargo by the Arab oil bloc, except for Libya. The problem persists.

This critical problem built up, in recent years, as the U.S. became increasingly dependent on foreign oil imports-crude oil and, also, petroleum products, as a result of a growing shortage of domestic oil refining capacity. The Arab embargo brought this situation to a head. The lifting of the embargo does not solve it.

The U.S. depends on oil to meet about one-half of its energy needs, at present. The use of oil and petroleum products rose from less than 11 million barrels a day in 1963 to nearly 16.4 million barrels a day in 1972. In 1973, it was about 17 million barrels a day. However, U.S. domestic production and capacity of crude oil and refined petroleum products leveled off at about 11 million barrels a day in 1970. Since 1970, with demand rising, the U.S. has depended, to a rapidly growing degree, on imports.

There has been little new refinery capacity added in the U.S. in the past five years. The companies have been building refineries in foreign countries-geared, in part, to meet the very sharp increases in foreign demand for petroleum products, with higher prices than in the U.S. and wide profit margins. This emphasis of the major oil companies on foreign investment-exploration, drilling and crude oil production, as well as refining-has been encouraged and subsidized by lavish loopholes in the federal tax structure.

By 1973, imports of oil and petroleum products amounted to about onethird of U.S. use. They increased from 19 percent to 22 percent of American consumption between 1963 and 1969 and then shot up to about 33 percent in 1973.

America's rapidly growing dependence on foreign imports of crude oil and petroleum products made the U.S. vulnerable to the blackmail of the Arab oil bloc in mid-October, 1973-to embargo shipments to the U.S., cut crude oil output and sharply boost their charges on each barrel of crude oil from wells in the Arab oil-producing areas.

Moreover, the Arab bloc's lifting of the oil embargo carried an implied threat that it may be re-imposed.

So the basic issue still remains, even with the lifting of the embargo.

There have been staggering increases in the prices of petroleum products. In the 12 months through February, 1974, retail prices of gasoline and motor oil shot up 30.9 percent; fuel oil and coal were up a shocking 58.8 percent. And the end of these price increases is not yet in sight-especially since the

Administration's major policy is to boost prices, in the hope that these sky-high price levels will induce new exploration and new research and development. These prices are hitting consumers. As a result, there have been changes in consumer buying patterns-with varying degrees of impacts on different industries and on employment. Employment is being affected not only by shortages-real or continued-but also by the impact of staggering price increases on consumer buying patterns.

So even if the shortages ease, there will still be adverse impacts on employment.

The Secretary of Labor's Report on the Impact of Energy Shortages on Manpower Needs, submitted to Congress on March 27, 1974, stated that between November, 1973 and February, 1974 between 125,000 and 200,000 jobs were lost as a direct result of energy shortages. The report stated that in addition, approximately 300,000 jobs were lost as an indirect result of the energy shortage. Industries associated with automobile manufacturing suffered the largest job losses. Other industries, such as hotels, motels, and amusements, have had to lay-off workers due to reduced travel.

Unemployment insurance claims have increased sharply in recent months. The Manpower Administration has just reported that for the week ending February 23rd, insured unemployment increased to 2,677,600 workers as 31 states reported higher claims volume. During the same week last year, insured unemployment was 2,081,000-approximately 600,000 more workers-are claiming benefits this year and the bulk of the increase (approximately 500,000 workers) has been attributed to the energy crisis.

Many of these workers will soon exhaust their benefit rights. In addition, there are an estimated 11 million workers in jobs that are uncovered by the existing unemployment compensation program. The 1973 Manpower Report of the President revealed that more than 1.3 million workers are employed as farm laborers or foremen, 1.4 million workers are employed as private household workers, and more than 10.6 million workers are employed by state and local governments. When these workers lose jobs because of energy problems, they are without any income protection, and the extent of their joblessness is not reflected in the reported unemployment insurance data.

The unemployment assistance provisions in H.R. 13834 would provide a measure of income protection to exhaustees of regular unemployment compensation benefits and uncovered workers who are unemployed due to energy related problems. These provisions would furnish almost universal unemployment assistance coverage for workers made jobless by the energy crisis. The AFL-CIO firmly supports the goal of this legislation-income protection for workers unemployed due to energy problems.

The AFL-CIO Executive Council, at its recent meeting, urged Congress to consider the following measure, among others, in an effort to cope with energy problems:

"... Federal legislation to provide extended unemployment insurance payments for the long-term jobless is essential..

"

The unemployment assistance provisions of H.R. 13834 would furnish the jobless income protection that is certain to be needed. H.R. 13834 provides that, subject to regulations established by the Secretary of Labor, states may enter into agreements to pay weekly assistance benefits to jobless workers. It takes advantage of the existing administrative machinery established to process claims for assistance, and it requires a report be submitted to the Congress concerning the existing and long-term impact of energy shortages upon employment.

The provisions of H.R. 13834 could be implemented in the same fashion as the provisions of the Economic Disaster Area Relief Act of 1971. The Department of Labor and the State agencies are thoroughly familiar with the procedures used under the provisions of this legislation to provide assistance to workers who experience periods of joblessness due to natural disasters. Therefore, the AFL-CIO urges enactment of H.R. 13834 which will assure unemployment assistance to virtually all workers who lose their jobs because of the energy crisis.

Mr. CHAIRMAN. We are glad to have your testimony because there has been a lot of misrepresentation about the unemployment provision in the bill.