Crush of new claims for jobless program creates bottleneck

McClatchy NewspapersJune 3, 2010 

WASHINGTON — Recent changes that sweetened the benefits and expanded the eligibility for a little-known Labor Department program also have created a bottleneck in processing claims, leaving untold thousands of jobless workers waiting as long as a year for help.

Trade Adjustment Assistance for Workers is designed to help people who've lost jobs in dying, troubled industries find careers in new fields that are emerging and growing. Only workers who lose their jobs because of the adverse impact of foreign trade, such as an increase in imports or outsourcing jobs, are eligible, and each application is closely scrutinized.

In the past, the program provided income support, health insurance subsidies, job training and other employment services mainly to displaced manufacturing and farm workers.

In response to record job losses in the recession, however, the stimulus bill made public-sector and service industry employees eligible for the program as of May 18, 2009. The law also boosted funding for the program from $220 million to $575 million and beefed up its benefits.

The program has many critics because it provides generous benefits to a small, select sliver of the labor force. Fewer than 50,000 workers got TAA benefits in fiscal year 2009, for example. Unemployment insurance, on the other hand, provides inadequate support to millions of workers.

With the new changes, a TAA tax credit pays 80 percent of health insurance premiums instead of 65 percent. Most participants who are enrolled in full-time schooling, which the program pays for, also can get the equivalent of unemployment insurance for up to 30 months rather than 24 months.

The improved benefits, combined with a larger number of eligible workers and a sour economy, led TAA applications to nearly double, from 2,471 in 2008 to 4,892 in 2009. The Labor Department added 20 staffers to deal with the surge, but processing time for applications also nearly doubled, from an average of 36 days before May 18, 2009, to 67 days afterward, according to a recent congressional report.

The National Employment Law Project, an advocacy group for workers, said the slowdown was even worse, rising from an average of 37 days in 2008 to more than 100 days last year.

In the early months of this year, a backlog of applications that dated from last summer finally was cleared, said Rick McHugh, a law project attorney. Labor Department figures show that the average processing time has been cut to 75 days as of Wednesday.

That's still about twice the desired time, however. The slowdown is partly due to the program's "incredibly bureaucratic eligibility criteria," said Howard Rosen, the executive director of the Trade Adjustment Assistance Coalition, which helps workers navigate the program.

"We've potentially doubled the number of people eligible, but we've also made it harder to determine eligibility in order to make sure people don't abuse the system," Rosen said.

The resulting delays have made it hard or, in some cases, impossible for workers to utilize program benefits as envisioned.

"Some people missed out on the health care tax credit because their coverage had already lapsed" by the time their applications were approved, McHugh said. "Or workers had scattered and couldn't be found. And some people had made other arrangements or accepted a bad job," without the benefit of TAA-funded career training, which provides cash support for up to 30 months for full-time students.

"A lot of people had turned the page and moved on, so they weren't able to take advantage of what they would have if their (program approval) had come in a more timely fashion," McHugh said.

After a career of making copper and brass radiators for heavy-duty trucks, Melinda Spoores, 54, was among 235 workers who lost their jobs when the Modine Manufacturing Co. halted production last year at its plant in Pemberville, Ohio.

When she was told of the closure plans months earlier, Spoores, a representative of United Steelworkers Local 1915, filed for TAA benefits on behalf of all company employees on June 13, 2009.

She was told it would be 30 to 40 days to process the application. However, it was eight months later that Spoores learned their TAA petition was denied. The Labor Department determined that the workers didn't meet program eligibility requirements because "imports of heavy duty trucks did not contribute importantly" to the company's job losses and none of the plant's production work had been sent to a foreign manufacturing plant.

With McHugh's help, the group is appealing the decision and the Labor Department is reconsidering the application, but it's unclear when it will decide. McHugh is confident that Modine employees will prevail. "I believe we have a fairly decent chance," he said. If the department again denies the application, he can appeal the decision to the Court of International Trade in New York .

That would only add more time to the process, however, and for Spoores and co-worker Alicia Shepler, a 35-year-old laborer at Modine, the waiting is the hardest part.

Both women were counting on the program to fund their training and education for a new career, since it pays for up to two years of college-level courses or training in occupational certificate programs.

Shepler and her husband, Ted, who lost his job as a supervisor at Modine, decided they couldn't wait any longer. They took on expensive student loans to enroll in health-related courses in college. Both are unemployed.

"I just couldn't put it off. I had to start," Alicia Shepler said. "And it stinks. But If I had waited (to get into the TAA program), I just felt like, 'Who knows how long it could have been.' "

Spoores, who's also unemployed, said she couldn't afford student loans to pay for an associate's degree in social work.

"How am I going to pay them back?" she said. "I know quite a few other people who've put everything on hold because they can't afford to do student loans either."

Rosen said the Modine employees could get six to eight months of job training and assistance under the Workforce Investment Act, "but it's not the Cadillac training" that's available under TAA.

Sherman Bickford worked 36 years as a maintenance man at the Modine plant. He was earning $21 an hour when he was laid off in November. At age 65, he didn't expect to earn as much if he found another job. Under TAA, however, workers older than 50 who take lower-paying new jobs can collect up to $12,000 in "wage insurance" to help compensate for their prior salaries.

Bickford hoped to do just that, at least for a year, until he was eligible for full Social Security benefits at age 66. Because Modine's TAA application is still pending, however, he can't take advantage of the wage insurance benefit. Instead, he retired and filed early for Social Security, which cut his monthly benefits by at least $100, he said.

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