WASHINGTON — With the House set to adjourn for the holidays, the window has apparently closed for Congress to extend unemployment insurance to 1.3 million people whose benefits run out a few days after Christmas. Republicans say that providing additional government assistance to the long-term unemployed reduces the incentive for them to find work. They say if Democrats want to extend these benefits at a cost of $26 billion, they need to find a way to pay for it, preferably by cutting other government spending.
That’s all well and good until you dig a bit deeper. The program in question to provide emergency benefits for the long-term unemployed was signed into law by President George W. Bush when the recession hit in 2008. Because it came under the heading of emergency spending, Congress put it on the credit card. Nothing was included about offsetting the cost. Congress renewed the program in 2010 and 2012 without discussion of cutting other spending to make up for its cost.
Oh, and these votes were all bipartisan. Republicans, like Democrats, didn’t want to inflict greater damage on people already suffering because they couldn’t find work. What’s different this time? Republicans say they don’t want a program designed as temporary emergency assistance to become a permanent “entitlement,” and they point to the latest unemployment figure, a drop to 7 percent, as evidence of an improving economy.
Of course in most other circumstances, critics of President Obama stress the weakness of the economy, not its strength, so this is an odd argument to make.
A better assessment of the overall economy would be to look at the Federal Reserve and its quantitative easing program, which has helped keep Wall Street and the stock market prospering and happy. Whenever outgoing Fed Chairman Ben Bernanke suggests he might be taking his foot off the pedal, the markets go crazy.
Bernanke has been candid in his assessment of the economy as still fragile and in need of help. He has said publicly that he will not let up until the unemployment rate drops to 6.5 percent. Republicans in Congress should take note of that. If the economy is too weak for Bernanke to ease back, how can the Congress in good conscience justify withholding benefits from people without work during the holidays?
There are three people searching for every job that is available, and many of the new jobs coming online are low-wage. In Washington, D.C. Walmart recently opened two new stores. A thousand people showed up to apply for about 350 low-wage jobs in each location, with two generations in some families waiting in a long line for the chance to fill out an application. “Walmart is now harder to get into than Harvard,” said satirist Stephen Colbert.
People without work for a long period of time are caught in what President Obama calls a “Catch-22” because it gets harder to find work the longer you are without it. Employers tend to favor the recently unemployed as though there is some stigma to being without a job. If Congress goes home without extending these benefits, it only adds to the stigma.
“When you allow people to be on unemployment insurance for 99 weeks, you’re causing them to become part of this perpetual unemployed group in our economy,” Sen. Rand Paul, R-Ky., said on “Fox News Sunday.” First of all, Paul is exaggerating. The maximum length of federal benefits is 73 weeks, not 99, and secondly, he was unable when asked to produce any evidence that what he said is true – that extending unemployment benefits leads to perpetual unemployment.
Various states calculate benefits differently, and they are tied to the state’s unemployment rate. In Pennsylvania, for example, where the unemployment rate is 7.5 percent, the combination of federal and state benefits allows people to collect unemployment insurance for 63 weeks. Whether that’s too long, or not long enough, is debatable for those fortunate enough to have a job; for those who don’t the answer is obvious.
U.S. News Syndicate, Inc.