President John F. Kennedy Defends One of His Key “New Frontier” Programs
He urges defeat of a bill that would cripple his effort to expand unemployment compensation coverage.
Kennedy was interested in providing benefits to unemployed workers, and extending the available benefits was part of his New Frontier. In a campaign speech he stated, “We must revise our outmoded unemployment compensation laws to allow men to receive full benefit payments while they are engaged in retraining programs…we must restore full...
Kennedy was interested in providing benefits to unemployed workers, and extending the available benefits was part of his New Frontier. In a campaign speech he stated, “We must revise our outmoded unemployment compensation laws to allow men to receive full benefit payments while they are engaged in retraining programs…we must restore full employment to our schedule of national priorities…building purchasing power through better minimum wage and unemployment compensation laws.” In 1961, as President, he pushed through a bill for extended unemployment compensation, and in June requested that Congress modernize the nation’s unemployment compensation system by increasing coverage, benefits and payroll taxes. Workers who were left out of the old unemployment program, such as employees of non-profit organzizations, would be covered in the new. In his 1962 State of the Union address, Kennedy again called upon Congress for “a permanent strengthening of our unemployment compensation system.” He made it a priority for 1962.
"The workers in nonprofit organizations, many of whom are in the lower wage brackets, are particularly in need of protection"
States also pay unemployment benefits, and their eligibility for Federal support requires that certain standards be met in disbursing those benefits. Plus employers pay a portion of the benefits. So a Federal mandate on unemployment compensation imposed obligations on both state governments and the businesses within those states, and opponents managed to stall the Kennedy bill in Congress. In fact, they even introduced a competing bill that would essentially simply encourage states to assume the burden of covering the additional workers, but not require coverage of anyone new. Passage of this bill would severely damage the prospects for his own bill, and the President, seeing it as a subterfuge, opposed it.
California’s Governor Edmund (Pat) Brown was concerned about coverage, and he wrote the President. Typed Letter Signed, on White House letterhead, Washington, June 21, 1962, to Governor Brown, urging defeat of the competing (and potentially destructive) measure. “I appreciate and share your intereat in the extension of unemployment insurance coverage to new groups of employees. The workers in nonprofit organizations, many of whom are in the lower wage brackets, are particularly in need of protection. S. 499 represents one approach to their protection, through a method of encouraging States to act. It would not itself give any protection to anyone. A different approach to the protection of nonprofit workers is embodied in the comprehensive proposals I made to Congress last year, which were introduced as H. R. 7640 by Representative Cecil King of your State, and as S. 2084 by Senator Eugene McCarthy of Minnesota. Those bills include a provision extending coverage of the Federal Unemployment Tax Act to nonprofit organizations. In my opinion, the mandatory approach is preferable, since voluntary action by States has not proven a very effective way to extend coverage on a broad basis. Because of those provisions of the Federal Unemployment Tax Act which led to S. 499, enactment of this bill would put serious obstacles in the way of later enactment of the nonprofit coverage proposed in H.R. 7640. Therefore, I would not want to support action on S. 499 independent of Congressional consideration of broader questions of unemployment insurance coverage. As you know, I have several times indicated my desire to have Congress give prompt consideration to basic improvements in the Federal-State unemployment insurance program. I shall continue to urge the earliest possible action In this area. At that time, various alternative ways of protecting nonprofit workers under the unemployment insurance program will be explored and a satisfactory approach will, I am sure, be developed.”
Kennedy was unable to revise the unemployment compensation program. The next overhaul of the program took place in 1970.
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