U.S. Labor Secretary Thomas E. Perez said Congress left more than a million families a "lump of coal in their stocking" when it failed to address expiring unemployment benefits, and he joined a chorus of Democrats calling on lawmakers to approve a retroactive extension early next month.
Speaking on the issue for the first time since Congress approved a budget Wednesday that did not extend the benefits for some 1.3 million out-of-work Americans, Perez said in an interview with The Baltimore Sun that inaction would not only affect the unemployed but would harm the broader economy by pushing people out of the labor force.
Federal emergency unemployment benefits expire Dec. 28.
"When you're in a hole, you stop digging," said Perez, a Takoma Park resident and former Maryland labor secretary who was confirmed by the Senate to lead the federal department in July.
"It would be literally unprecedented for Congress ... to fail to act to renew emergency unemployment," he said.
Lawmakers in both parties agreed to take federal jobless benefits off the table in negotiations over the budget agreement approved this month, but Democrats are now pushing hard for a retroactive extension in January. The federal program pays for unemployment beyond the 26 weeks typically covered by states.
Perez noted that Congress approved the federal program with broad bipartisan support in 2008 when the U.S. unemployment rate stood at 5.6 percent. The current unemployment rate is 7 percent, down from a peak of 10 percent in late 2009.
More than 25,000 Marylanders receive the long-term benefits, according to the Maryland Department of Labor, Licensing and Regulation. The state agency began notifying claimants Wednesday that benefits will end.
Many Republicans, including House Speaker John A. Boehner, have said they're open to another unemployment extension if the cost is covered. An annual extension would cost about $25 billion, according to estimates from the nonpartisan Congressional Budget Office.
"We need to pay for it," said Sen. Orrin G. Hatch, a Utah Republican and member of the Senate Health, Education, Labor and Pensions Committee. "We can't just keep doing this."
Hatch, who opposed Perez's confirmation, described him Friday as "overwhelmingly pro-union" but said he "has high hopes he'll turn around and be fair."
Democrats say there are economic benefits to extending the program that would be minimized if the government makes cuts elsewhere to offset the cost. The CBO estimated this month that continuing the program would boost the economy by two-tenths of a percent in 2014 and add about 200,000 jobs.
"If you pay for it, you're defeating the second purpose of the program, which is to put money into the economy," said Sen. Ben Cardin, a Maryland Democrat. "So, it doesn't act as the stimulus it was intended to."
President Barack Obama reiterated Friday his administration's support for a three-month extension that is being negotiated by a bipartisan group of senators.
For Perez, helping the White House maneuver the issue through Congress next month will be just the latest challenge in a busy first few months on the job.
Labor unions have applauded the secretary for moving quickly to implement new regulations, such as requiring that in-home health care workers are paid at least the minimum wage and setting disability and veteran hiring goals for federal contractors.
Business groups have been more reserved in their analysis of Perez. Many are watching to see how the department handles far more controversial rules on the horizon. The department recently delayed until March a proposed regulation that would require company managers to reveal when they hire attorneys to advise them when employees consider organizing.
The proposal is widely opposed by business groups and attorneys, who say such disclosures would fly in the face of attorney-client confidentiality. Perez, an attorney who previously served as head of the Justice Department's Civil Rights Division, would not say why the rule was delayed.
Business and labor are also following a proposed rule known as "right-to-know" that would require companies to explain the legal basis for classifying some workers as independent contractors — a move that often means those employees receive less compensation. Perez declined to address speculation that the department is planning to make the rule a priority in 2014.
Next year will be key for businesses affected by such regulations, said Michael Lotito, co-chair of the Workplace Policy Institute, part of the management law firm Littler Mendelson.
"Even if [the Labor Department] does half of what it intends to do, it will be remembered as the most aggressive enforcement agency in decades," Lotito said.
But the federal department has been stymied in its effort to change the guest worker visa program that many consider critical for the Eastern Shore seafood industry — and it is unclear whether modifications to the program are in store next year. Rules that would increase how much those foreign workers are paid — and affect how they are treated while in the United States — are tied up in federal court and the debate in Congress over immigration reform.
The U.S. government permits 66,000 foreigners to enter the country each year under what is known as the H-2B visa program. The temporary workers are hired for seasonal jobs such as crab-picking, oyster-shucking and landscaping. They return home when the season ends.
"Maryland has a long and proud history in the crabbing industry, and I want to make sure we retain that industry," Perez said. "The H-2B program has been an important component, and that's why we're working so hard to fix the problem."
Perez, 52, a native of Buffalo, N.Y., was the first Hispanic to win a seat on the Montgomery County Council in 2002. He ran briefly for Maryland attorney general in 2006. His grandfather was a Dominican ambassador to the United States.
Obama nominated Perez in March to replace Labor Secretary Hilda Solis, who stepped down in January. He is the only Hispanic in the president's Cabinet.
One of the administration's biggest labor initiatives next year also might spur one of its toughest political fights: raising the federal minimum wage. Obama has called repeatedly for an increase in the $7.25 hourly wage, which was last increased in 2007. Several states, including Maryland, will consider increasing their minimum wage next year.
This year, Montgomery and Prince George's counties approved an increase in their minimum wage to $11.50 by 2017.
Perez said he believes such local efforts will help the push on the federal level, which he described as a top priority next year.
"Having worked in state and local government, I have an acute appreciation and respect for the fact that you can't wait for the federal government to act; you've got people who you want to help," he said. "Nobody who works a full-time job should have to live in poverty."
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