By Peter Dreier and Elizabeth Shermer. Posted in the Huffington Post. July 20, 2010.
Perhaps as early as today (Tuesday), the Senate will pass legislation extending jobless benefits for 2.5 million Americans whose unemployment insurance has expired. The House already passed the extension, but Senate Republicans have blocked several attempts this year to do the same. Today, Carte Goodwin (appointed by West Virginia Gov. Joe Manchin to replace Sen. Robert C Byrd, who died last month) will be sworn in and the Senate Democrats will have enough votes to stop a Republican filibuster.
President Obama will sign the bill -- which helps Americans who have been jobless for more than six months, extending benefits for up to 99 weeks -- this week.
In February, Sen. Jim Bunning, the Kentucky Republican, launched a one-man filibuster against extending jobless benefits. Back then, 19 other Republican senators opposed him. But since then, the Senate's entire GOP caucus -- except Senators Susan Collins and Olympia Snowe of Maine -- joined the crusade.
Why did the Republicans wage a war against unemployment insurance in the first place? Are they that heartless? Perhaps a few of them are, but the key motivation for their obstructionism is simply a matter of hardball politics. They seem to believe that denying aid to the jobless, even in the midst of the worst recession since the 1930s, will help them win House and Senate elections in November. They want voters to blame the Democrats for the economic hard times, so Republicans think that keeping unemployment as high as possible will give them a political advantage.
Of course, they can't say that publicly. Their official argument -- repeated Sunday on CNN by Sen. Minority Leader Mitch McConnell of Kentucky -- is that the additional jobless benefits will cost $34 billion and will add to the deficit. "We're all for extending unemployment insurance," McConnell said. "The question is when are we going to get serious about the debt?" The Republicans insist that the Democrats cut something else to pay for the unemployment aid. But McConnell and his GOP cronies have persistently refused to support Obama's plan to raise taxes on families earning over $250,000 -- in reality, to cancel the tax cuts for the rich that George W. Bush began handing out a decade ago -- which would generate $678 billion over the next decade, an average of $67.8 billion a year.
In other words, the Republicans are more willing to provide tax breaks for the rich than unemployment benefits for the jobless.
In addition to claiming that unemployment insurance will bust the budget, the Republicans are recycling other misleading arguments that have been used since the program was first proposed during the Great Depression. During Congressional hearings in 1934, for example, James L. Donnelly of the Illinois Manufacturers Association warned that taxing employers to contribute to the UI fund "would render business recovery absolutely hopeless." It would also, Donnelly claimed, "undermine the fabric of our economic and social life by destroying initiative, discouraging thrift, and stifling individual responsibility." Unemployment benefits place "a premium on idleness," according to the business leader.
If that sounds familiar, its because you probably heard Republican Senators repeat the same mantra in recent weeks. For example, according to Sen. Jon Kyle, an Arizona Republican, "continuing to pay people unemployment compensation is a disincentive for them to seek new work."
This was nonsense in the Depression and its nonsense now -- another example of how the GOP cries wolf whenever reformers suggest that a little bit of government action is needed to help Main Street.
Unemployment insurance doesn't make people lazy or dampen their desire to find work. It simply helps them pay the rent and put food on the table. A recent report by the Joint Economic Committee of Congress, reviewed decades of economic studies to see if unemployment insurance benefits inhibited unemployed workers from vigorously looking for or accepting a new job. "Those fears," the report concluded, "are unfounded."
A different study released in April by the San Francisco Federal Reserve came to the same conclusion.
The reality is that workers can barely survive on jobless benefits, which average only 74% of a poverty level income for a family of four. Even a low-paying job is better than trying to scrape by on unemployment insurance. As a result, unemployed workers receiving insurance keep looking for work.
The obvious problem is that there's no work to be found. Roughly one out of ten Americans -- nearly 15 million people -- are now out of work. Almost half (46%) of the jobless have been out of work for at least six months. This is the highest rate of long-term unemployment since the government began keep records in 1948. About a quarter of the unemployed have been jobless for more than a year. Currently, there are nearly five workers actively searching for work for every job available. (Before the recession began there were only one and a half job seekers for every vacancy).
Moreover, the unemployment crisis has hit Americans from all walks of life and education levels. Among the long-term jobless, 7.9% have an associate degree and another 18.7% have at least a bachelor's degree, 19.6% attended college but didn't graduate, 38.4% finished high school, and 15.4% did not complete high school. Large numbers of construction workers, factory employees, school teachers, retail sales clerks, corporate managers, and many other workers have lost their jobs and exhausted their jobless benefits.
Long-term joblessness is a personal and economic disaster. People often lose their health insurance, lose their homes through eviction and foreclosure, suffer depression, and fall into poverty. According to the U.S. Department of Agriculture, the number of people receiving food stamps has grown from 26.5 million in 2007, to 33.7 million last year, to 40.1 million in March.
But McConnell, Kyle and their colleagues don't have to be bleeding heart liberals to support extending unemployment benefits. If compassion won't do the trick, you'd think they might be persuaded by the cold logic of economics. It is a tried-and-true way to improve the economy. Unemployment insurance puts money in people's pockets. Because they are barely hanging on, they spend it all, so it increases consumer demand, which in return leads to more private sector jobs.
Mark Zandi of Moody's Economy.com, an economic advisor to Sen. John McCain (R-AZ) during his recent presidential race, estimates that for every dollar spent on unemployment compensation, $1.60 is added to our economy's output. Using that formula, the Economic Policy Institute calculated that since 2009, regular unemployment benefits plus additional aid included in the Recovery Act added more than 1.7 million full-time equivalent positions to the U.S. economy. Another extension of jobless insurance would jolt the economy again, putting more people back to work.
Given this economic consensus about the positive ripple effects of extending unemployment insurance, why have Republicans taken such a hard line against it?
Could they really hope to keep unemployment as high as possible , hoping it will hurt the Democrats' election chances in November? If that's their hardball calculation, they ought to think again.
All polls show that a majority of Americans favor extending jobless benefits more than reducing the deficit, and support eliminating tax breaks for the wealthy. A June survey sponsored by the National Employment Law Project discovered that 74 percent of voters think helping the unemployed is more important than reducing the deficit. Fifty-two percent of voters -- and 35% of Republicans -- told CBS that Congress should extend unemployment benefits "even if it means increasing the budget deficit." Sixty-two percent of registered voters told ABC that Congress should extend benefits despite concerns that doing so "adds too much to the federal budget deficit."
Almost every American knows at least one person who is out of work. They understand that being laid off can happen to hard-working people through no fault of their own. So it is unlikely that many independent voters will support Republicans in the fall because they stood firm against extending a lifeline to America's jobless.
Most Americans have more compassion, and more common sense, than the Senate Republicans.
Peter Dreier teaches politics at Occidental College in Los Angeles. Elizabeth Shermer teaches history at Loyola University in Chicago.
Originally posted on Huffington Post, July 20, 2010