“Job One, Helping The Jobless”: Can Congress Pass An Unemployment Insurance Extension?
When extended Unemployment Insurance benefits expired late last month, 1.3 million jobless Americans immediately lost that bit of safety net; if Congress fails to act, another 3.6 million Americans will lose this support by the end of 2014. Senate Majority Leader Harry Reid recently said that on Monday the Senate will take up a temporary extension. Getting it done would not only be smart economics but it’s also simply the right thing to do.
Many on the right oppose extending benefits under the deeply dubious theory that too much unemployment compensation makes the social safety net a comfy hammock, to borrow Paul Ryan’s evocative simile. Why would people work, the theory goes, when they can get paid to not work? So people like Kentucky Sen. Rand Paul paint opposition to extended benefits as being rooted in concern for the jobless who suffer under the seductive yolk of big government’s helping hand – never mind that the study he cites doesn’t say what he says it says. And never mind that in order to receive jobless benefits, you have to be actively seeking a job, meaning that cutting benefits could actually discourage people from continuing to look for work. And never mind the paltry nature of support. As I wrote in my column last month:
The National Employment Law Project notes that “while the average American family spends $1,407 per month on housing alone, the average monthly extension benefit is only $1,166.” Still the modest sums help: According to the Council of Economic Advisers, in 2012 alone unemployment insurance benefits “lifted an estimated 2.5 million people out of poverty.” Further, the National Employment Law Project estimates, 446,000 of those people were children.
If members of Congress (and for that matter the yammering class) need any further evidence of the importance of extending benefits, the state of North Carolina has been unkind enough to conduct an experiment in punishing the unemployed. Last February the state enacted a law which not only slashed the duration (from 26 weeks to 12-20 weeks) and amount (from a maximum of $535 to $350 per week) of unemployment benefits, but also managed to run afoul of the federal jobless program, disqualifying North Carolinians from receiving those benefits.
So what happened when the lazy parasites were forced to stop suckling at the governmental teet? BloombergBusinessweek’s Joshua Green has a good piece today answering that question:
At first glance, the effect appears to be positive. North Carolina’s unemployment rate dropped dramatically, from 8.8 percent to 7.4 percent between July and November. By comparison, the national unemployment rate fell by 0.6 percent over the same period. A closer look, however, suggests that North Carolina’s unemployment numbers have fallen not because the long-term jobless have found work but because they’ve quit looking altogether. As a result, the state no longer counts them as unemployed.
As John Quinterno of the economic research firm South by North Strategies tells Green, while the number of unemployed in the state fell by nearly 102,000 year over year, 95,000 of those people aren’t counted as jobless not because they found jobs but because they stopped looking. Meanwhile, North Carolina’s food banks are getting overwhelmed, reports Bloomberg’s Evan Soltas, who quotes one food bank director who oversees seven counties and 230 organizations as saying that “some of our member agencies have been able to meet that need, but many have not.”
So what are the odds of Congress doing the right thing? As with many prominent issues these days, Democrats have the public on their side – according to a poll by the Democratic firm Hart Research, 55 percent of voters want the benefits extended. In order to pass an extension through the Senate, Reid will need to peel off at least a handful of Republicans (he already has one – Nevada Sen. Dean Heller, who is co-sponsoring the three month extension Reid is pushing). The Washington Post’s Greg Sargent has a good run-down of Republicans from either blue or purple states or from high unemployment red states who might vote with Reid. But, Sargent concludes:
The campaign to pressure Republicans into agreeing to extend UI has essentially amounted to an effort to shame them into it, by highlighting the huge numbers of their own constituents who stand to lose lifelines if they don’t act. Local press coverage has dramatically spotlighted the issue within states, as press compilations by Dems show.
But this doesn’t appear to be working with too many Republicans.
And even if the Senate passes the bill, odds remain long that House Republicans – who refused to include an extension when they cleared last year’s budget deal – will suddenly do the right thing.
If the GOP does block the extension, 2014 is off to a grim start for millions of Americans.
By: Robert Schlesinger, U. S. News and World Report, January 2, 2013
“Another Self-Inflicted Wound”: For Republicans, Unemployed Americans Are Lazy And Lack The Proper Motivation
As expected, federal emergency unemployment benefits expired over the weekend for 1.3 million jobless Americans. By the summer, another 1.9 million will be affected by the lapsed assistance. For Republicans, who celebrate the expiration, this will encourage the unemployed to work that much harder to find work – because the safety net that helped them keep their heads above water has now been removed.
Matt Yglesias, who called the situation “morally scandalous,” responds to the GOP argument by pointing to real-world evidence.
People who’ve been out of work for a long time obviously really need some money to get by, and they’re going to lose their money. And they’re not going to make up for it by getting jobs.
One way we know they won’t is from the experience of North Carolina, which for reasons of state politics did a UI cutoff for the long-term unemployed this year. Evan Soltas summarized the results and you can read Reihan Salam on the same thing if you want more right-wing street cred, but suffice it to say there was no “jobs boom” where lazy bums suddenly got off their asses and found readily available work. It turns out that being unemployed is really humiliating and depressing, and people who’ve been unemployed for a long time are people who genuinely can’t find any jobs. Cut them off from their benefits, and they end up scrounging at soup kitchens – they just can’t get work.
It speaks to the assumptions that undergird the political positions. For Republicans, unemployed Americans are lazy and lack the proper motivation. The government could help the jobless get by with meager, temporary support, but that only creates a “dependency.” It’s better, the argument goes, to cut these people off, encourage them to fend for themselves, and push them back into the workforce by leaving them with nothing.
Indeed, that’s precisely what Republican policymakers said in North Carolina back in July, when it became the only state in the nation to cut off access to federal emergency unemployment compensation after state benefits have been exhausted.
Did the far-right theory prove true? Of course not – the jobless, unable to find work, effectively abandoned the workforce altogether.
So, if cutting these struggling Americans off doesn’t help, what would? As we discussed last week, a more concerted effort to get these folks jobs.
As for Washington, congressional Democrats are eager to renew this fight when lawmakers return to Capitol Hill next week. For his part, President Obama called Sens. Jack Reed (D-R.I.) and Dean Heller (R-Nev.) late last week to offer his support for their plan for a three-month extension.
Gene Sperling, the director of the National Economic Council, added that allowing UI benefits to expire, as they did on Saturday, “defies economic sense, precedent and our values.”
By: Steve Benen, The Maddow Blog, December 30, 2013
“At The Top, There Is No Crisis”: Why A Never-Ending Disaster For 90 Percent Of America Doesn’t Worry The GOP
We’re in the middle of the worst economic disaster in modern history and we’re doing almost nothing about it, warns UC Berkeley Economist J. Bradford DeLong.
“So unless something — and it will need to be something major — returns the U.S. to its pre-2008 growth trajectory, future economic historians will not regard the Great Depression as the worst business-cycle disaster of the industrial age,” he writes. “It is we who are living in their worst case.”
The former Clinton administration official wonders why a disaster that “robs the average American family of four of $36,000 per year in useful goods and services, and that threatens to keep Americans poorer than they might have been for decades,” isn’t motivating policymakers to act.
“One would think that America’s leaders would be clambering to formulate policies aimed at returning the economy to its pre-2008 growth path: putting people back to work, cleaning up underwater mortgages, restoring financial markets’ risk-bearing capacity, and boosting investment,” he says.
Instead, Congress is debating about how much our investments should be reduced, how few weeks we should help the unemployed, how much food stamps should be cut.
The reason why we aren’t acting is clear to DeLong: “…at the top, there is no crisis.” While the incomes of the bottom 90 percent have stagnated for decades, the top has flourished. “The incomes of America’s top 10 percent are two-thirds higher than those of their counterparts 20 years ago, while the incomes of the top 1 percent have more than doubled,” he writes.
This inequality isn’t an accident of history or the result of rapid technological advancement, as conservatives like to pretend.
It’s the result of the class war the right has been waging for decades.
“Among developed countries, the U.S. does have the most unequal distribution of disposable income after taxes and transfer payments,” writes economist Laura Tyson, former chair of the President’s Council of Economic Advisers.
Our tax system is more progressive than most European countries that rely on a value-added tax but we spend far less on programs that help families and keep inequality low.
This is the victory of a conservative movement that caters to the richest Americans and seems to have no problem with a recovery that is only benefiting the richest 10 percent. Actually, it seeks to maintain the advantage for the richest by opposing policies like Medicaid expansion and assailing the labor movement.
The Republican Party doesn’t even feel the need to bother with solutions to problems that plague the lower 90 percent, like unemployment, says New York magazine’s Jonathan Chait.
“Republican thought on mass unemployment is a restaurant with tiny portions that taste terrible,” he writes.
The problem for the left is that Republicans can run and win on policies that directly increase income inequality. They can resist Democratic initiatives — even wildly popular ideas like raising the minimum wage, which would reduce poverty and increase consumer spending — and still be on track to hold the House of Representatives, while possibly even wining the Senate.
Why doesn’t the Republican Party act to reverse the greatest economic disaster in at least half a century, a disaster they could prevent?
Rep. Paul Ryan (R-WI) can reveal his secret passion for alleviating poverty over and over again while promoting policies that increase it. And still be taken seriously.
Republicans don’t care about improving the economy for the bottom 90 percent for one simple reason.
They don’t have to.
By: Jason Sattler, The National Memo, January 1, 2014
“Thanks For Nothing Republicans”: Unemployment Benefits, The Cruelest Cut Of All
To 1.3 million jobless Americans: The Republican Party wishes you a Very Unhappy New Year!
It would be one thing if there were a logical reason to cut off unemployment benefits for those who have been out of work the longest. But no such rationale exists. On both economic and moral grounds, extending benefits for the long-term unemployed should have received an automatic, bipartisan vote in both houses of Congress.
It didn’t. Nothing is automatic and bipartisan anymore, not with today’s radicalized GOP on the scene. In this case, a sensible and humane policy option is hostage to bruised Republican egos and the ideological myth of “makers” vs. “takers.”
The result is a cruel blow to families that are already suffering. On Saturday, benefits were allowed to expire for 1.3 million people who have been unemployed more than six months. These are precisely the jobless who will suffer most from a cutoff, since they have been scraping by on unemployment checks for so long that their financial situations are already precarious, if not dire.
Extending unemployment benefits is something that’s normally done in a recession, and Republicans correctly point out that we are now in a recovery. But there was nothing normal about the Great Recession, and there is nothing normal about the Not-So-Great Recovery.
We are emerging from the worst economic slump since the Depression, and growth has been unusually — and painfully — slow. Only in the past few months has the economy shown real signs of life. Job growth is improving but still sluggish, with unemployment hovering at 7 percent — not counting the millions of Americans who have given up looking for work.
An extension of long-term unemployment benefits should have been part of the budget deal between Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) but wasn’t. Democrats tried to offer an amendment that would extend the benefits for three months, and they identified savings elsewhere in the budget to pay for it. But House Speaker John Boehner refused to allow a vote on the proposal.
In terms of economic policy, this makes no sense. The nonpartisan Congressional Budget Office estimated that extending long-term unemployment for a full year would cost about $25 billion, which would add to the deficit. But the measure would boost economic growth by two-tenths of 1 percent and create 200,000 jobs. Given that interest rates are at historical lows, and given that the imperative right now is to create growth and jobs, refusing to extend the benefits is counterproductive as well as cruel.
Sadly, cruelty is the point.
The Republican far right perceived the budget deal as a political defeat — even though it caps spending for social programs at levels that many Democrats consider appallingly low — because it does not slash Medicare and Social Security. For some in the GOP, accepting an unemployment extension would have been too much to swallow, simply because it was favored by Democrats.
For some other Republicans, unemployment isn’t really about spending, growth, deficits or even politics. They see it as a moral issue.
To this way of thinking, extended benefits coddle the unemployed and encourage them to loll around the house, presumably eating bonbons, rather than pound the streets for any crumbs of work they can find, however meager.
This view is consistent with the philosophy that Mitt Romney privately espoused during his failed presidential campaign. It sees a growing number of Americans as parasitic takers who luxuriate in their dependence on government benefits — 47 percent was the figure Romney came up with. The makers who create the nation’s wealth are not really helping the down-and-out by giving them financial support to make it through tough times, this philosophy holds. Much better medicine would be a kick in the pants.
I wonder if these Ayn Rand ideologues have ever actually met a breadwinner who has gone without a job for more than six months. I wonder if they know that some jobless men and women — and I know this is hard to believe — don’t have well-to-do parents or even a trust fund to fall back on. I wonder if they understand that unemployment benefits don’t even cover basic expenses, much less bonbons.
The Republican establishment doesn’t want this to be a campaign issue for Democrats, so it’s quite likely that the benefits will eventually be extended. Until then, more than 1 million households are being made to suffer privation and anxiety — for no good reason at all. Thanks for nothing, GOP.
By: Eugene Robinson, Opinion Writer, The Washington Post, December 30, 2013
“Merry Christmas From The GOP”: On December 28th Unemployment Benefits End For 1.3 Million Families
Three days after Christmas, unemployment benefits end for 1.3 million people who have exhausted their state unemployment benefits, but still can’t find a job.
To be eligible for unemployment benefits, you have to be actively looking for a job. Virtually all of these people would rather work, but can’t find a job in today’s economy where there are three applicants for every job available.
But when the budget deal was negotiated in Congress over the last several weeks, Republican negotiators refused to agree to continue those unemployment benefits. And at the same time, they demanded the continuation of tax breaks for big oil companies and loopholes for Wall Street billionaires who get their income from hedge funds.
Merry Christmas from the GOP.
Of course this kind of Christmas cheer comes from the same gang that routinely drags out the well-worn charge that progressives and Democrats are engaging in a “war on Christmas”. Maybe someone should force Republican Members of Congress to sit through a showing of “A Christmas Carol” and then explain why they think Ebenezer Scrooge is the hero.
Over the last decade the far right, that now dominates the GOP, has conducted a real war on the values that we celebrate at Christmas.
In case they missed it, Christmas is about giving, and sharing and loving your neighbor. It’s about family. Christmas has nothing to do with greed or selfishness or paying people poverty level wages so you can maximize your bottom line.
The Christmas spirit is not about cutting off an economic lifeline for over a million people so the wealthiest in the land can continue to prosper beyond imagining. And remember many of those same wealthy people who are doing so well are personally responsible for the recklessness that caused the Great Recession and cost the jobs of those whose unemployment benefits they now believe we can “no longer afford”.
You hear a lot from the right wing about having to make “tough choices” because some things “we just can’t afford”. Ironically those “things we cannot afford” never include the things that benefit the very wealthy.
In fact, as surprising as it may seem to many Americans, there is more bounty in the land this Christmas, than at any time in our nation’s history. Our income per capita – and our productivity per person – has increased by 80% over the last 30 years. But over those same 30 years, average incomes for most Americans were stagnant – and virtually all of that increased income and wealth went to the top 1%.
That is bad enough. But then to insist that our country “can’t afford” to continue paying unemployment benefits to people who can’t find a job – and by the way – cut off their benefits three days after Christmas – that is an outrage.
Many on the right are so out of touch with ordinary Americans that they argue that providing unemployment benefits makes people “dependent”. This of course completely ignores the fact that to qualify you have to have been working and lost your job for no fault of your own; you have to be actively looking for work; and the maximum benefits in many states are very low.
Ask the Koch brothers to support a family on the $258 per week maximum benefit in Louisiana, or the $275 per week maximum benefit in Florida – or even the $524 per week maximum benefit in Ohio.
People don’t want to stay on unemployment benefits. They want to find a job that provides them with income and benefits that allow them to give a better life to their families and their kids. They want to make a contribution and feel that they do worthwhile work. Most Americans want to be proud of what they do for a living – they don’t want to be “dependent” on anyone.
You have to be from another planet to believe that most people will become “dependent” on a total income of $275 per week.
Unemployment benefits provide workers and their families with an economic shot in the arm to get them through being laid off in an economy when jobs are still hard to come by.
And let’s be real clear why jobs are so hard to come by. Jobs are still hard to come by because of the policies of those very same right wing politicians who refused to reign in the orgy of reckless speculation on Wall Street that resulted in a ruinous financial collapse from which the economy is still recovering.
Jobs would be a lot easier to come by if the GOP did not do everything it could to block President Obama’s American’s Jobs Act that would create millions of jobs in both the public and private sectors by investing in teachers, and infrastructure.
Jobs would be a lot easier to come by if the GOP were not fixated on cutting government investment at a time when virtually all economists – including the Federal Reserve Chairman – believe we need more fiscal stimulus and that the policy’s of the Republicans in Congress continue to be a major drag on economic growth.
In fact the non-partisan Congressional Budget Office estimates that failing to continue federal unemployment benefits will cost the economy 240,000 jobs and slow the growth of the overall economy by .2%.
Those who receive unemployment benefits spend virtually every dime on the goods and services they need to live. That spending provides jobs to thousands of other Americans. So cutting federal unemployment benefits will actually create a quarter million more people who are unemployed. Great work GOP.
So here is the bottom line. It turns out that a society that reflects the spirit of Christmas – one where we have each other’s back – where we care about each other and not just ourselves – a society like that is better for everyone.
In fact, it turns out that the “moral” thing to do – the “right” thing to do – is also the “smart” thing to do.
It turns out that progressive values like loving your neighbor as your self – are the most precious possessions of humanity because they are the values that will allow us and our children to prosper and survive.
And that’s why the spirit of Christmas doesn’t just belong to Christians – or Catholics or Baptists or Episcopalians – or anyone. The Christmas spirit belongs to everyone on our small fragile planet. And that spirit embodies exactly the set of values that we must use to chart our course not just on Christmas Day but 365 days each year – including December 28th when over a million families will lose the economic lifeline that provides them a bridge to a better life.
By: Robert Creamer, The Huffington Post Blog, December 23, 2013
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