Senator Eliot Shapleigh - El Paso, Texas

AUSTIN — Texas Workforce Commission Chairman Tom Pauken warned Wednesday that the state faces continued rising unemployment and blamed policies in Washington for stifling job creation and discouraging consumer spending.

Pauken said in a telephone interview that he is satisfied that the commission has resolved a potential crisis that threatened to temporarily leave thousands of unemployed workers without benefits because of a potential months-long delay in the implementation of a 13-week extended-benefits program.

Pauken said he ordered staff members to fix the problem immediately after the three commissioners learned last week of the potential delay. "We should have been informed," he said. "I told them it wasn’t acceptable."

The U.S. Labor Department agreed to temporarily defer requirements for the program, enabling extended benefits to be available no later than July 31. Up to 15,000 jobless workers are expected to exhaust their regular benefits by the end of the month.

Pauken, a former Texas Republican Party chairman, presides over an agency that is struggling to deal with surging unemployment as worsening fallout from the national recession takes its toll on Texas.

The seasonally adjusted unemployment rate for June rose to 7.5 percent and was measured at 8 percent when seasonal factors weren’t included. The national unemployment rate is 9.7 percent, and economists are forecasting that the national rate is likely to surpass 10 percent by the end of the year.

"Even though Texas is doing much better than the nation as a whole, nonetheless, we have been negatively impacted.  . . . I would expect these unemployment figures to climb here in Texas as well," Pauken said.

He said the state’s unemployment rate normally runs at least 1 to 2 percentage points below the national figure. At this stage, double-digit unemployment appears unlikely in Texas, he said, but that scenario could change if the nation’s unemployment pushes into the 12 to 15 percent range.

Texas unemployment claims for individuals out of work for more than a week are nearly 170 percent higher than they were a year ago. Nearly 89,400 workers are unemployed in the Fort Worth-Arlington metropolitan region that includes Tarrant, Johnson, Parker and Wise counties, according to commission statistics that were released last week.

The four-county region’s unemployment rate is 8.3 percent, compared with 7.1 percent in May and 5 percent a year earlier.

Pauken said misguided policies in the Bush and Obama administrations, including record deficits, have contributed to the prolonged downturn and discouraged businesses from hiring and creating jobs.

"I don’t see anything coming out of Washington to encourage the private sector to go hire people and help roll this economy," he said. "If they continue to do what they’re doing, then you bet it could be a lot worse."

President Barack Obama’s stimulus package, designed to create jobs and encourage spending, has thus far been largely ineffective, Pauken contended, with consumers instead putting much of their money in savings. Pauken, in a recent speech, also criticized former President George W. Bush’s $168 billion tax rebate package, saying it helped contribute to a deficit expected to approach $2 trillion this year.

Supporters of Obama’s policies offer a sharply different assessment, saying it has the potential to create more than 3 million jobs across a broad sector of the economy and asserting that many of the benefits are still taking root.

Pauken said manufacturing and construction are among the hardest-hit industries in Texas, and the energy sector, "has pulled back as well."

The commission chairman said he understands the frustration of workers trying to find jobs.