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Loss Of Unemployment Benefits Has Now Cost Almost $5 Billion As Congress Dithers

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The Senate took a small step toward passing a short-term restoration of lapsed unemployment benefits on Thursday night as six Republicans crossed the aisle to help Democrats break a filibuster of the package. The narrow procedural vote underscores how slowly Congress has responded to this self-inflicted economic wound, as states have now lost out on almost $5 billion in economic activity since the federal safety net for the long-term jobless evaporated in December.
Thursday’s vote was the third time that Republicans have attempted to filibuster the measure. With that blockade broken, the bill is expected to pass the upper chamber on Monday. House Speaker John Boehner (R-OH) seems poised to kill the package, which he calls “unworkable.” Yet the bill does as little as possible from the perspective of those who rely upon federal assistance as their job hunts stretch out longer beyond the six months of coverage that state unemployment insurance offers.
In mid March, with 10 weeks’ worth of jobless aid checks already missing for more than 2 million job seekers, senators announced a compromise to reinstate the federal Emergency Unemployment Compensation (EUC) program for just five months. The deal was retroactive to December 28, when the program expired. While retroactive payments could be priceless for beneficiaries, the short-term nature of the deal means that the program will lapse all over again at the end of May. Given that the compromise has taken more than two weeks to clear filibuster hurdles, and that the House appears ready to slow it down even further, it seems as though legislators will end up resolving this self-made problem for just a few weeks before the extension itself ends.
There are nearly 2.3 million people who would be receiving EUC checks if the program hadn’t lapsed. That number grows by 72,000 each week as people max out their state-level benefits and turn to the feds for further help. In addition to the millions of direct recipients, there are at least 2.3 million children who depend upon parents who rely on EUC. The failure to restore the program therefore harms over 4.5 million people’s wellbeing directly, and many more indirectly through reduced economic activity due to EUC recipients having less money to spend.
Those economic losses total $4.7 billion nationwide, according to a report this week from the Democrats on the House Ways and Means Committee. The EUC program has one of the better economic multiplier effects of any federal program, generating over $1.50 in economic activity for every dollar the government spends.
Depriving these people of their safety net does nothing to improve their job prospects. For one thing, there are about 2.5 people job hunting for every job opening available. That makes for stiff competition for even those who are just a few weeks out of work, let alone those who have been unemployed for far longer. Hiring managers typically view long stints of joblessness as disqualifying, and the longer a person is out of a job the harder it is to get an interview for a new position. Those problems don’t go away just because Congress shrinks a job-seeker’s food and rent budget, and making it harder for those people to keep their phone and internet bills current only makes it harder to hunt for jobs.

Democrats expect Republicans to come around on unemployment benefits

 

Senate Democrats ripped into their Republican colleagues for failing to pass an extension of unemployment insurance benefits during a Thursday press conference but predicted that the upcoming congressional recess will subject the Republicans to enough pressure in their home states that they will change their tune.

“The only conclusion anyone could draw is that they’re looking for any excuse there is to deny these people the benefits they should have,” Senate Majority Leader Harry Reid, D-Nev., said. “Next week Republicans are going to go home…let them explain to the people in their respective states how they did this for the process reasons.”

Illinois Sen. Dick Durbin, the number two Senate Democrat, invoked 2012 GOP presidential candidate Mitt Romney’s comment in a fundraiser about 47 percent of Americans not paying income tax, and said the party has adopted his mentality. Republicans and their leadership, he said, view people who need a helping hand as “lazy.”

“The issue’s not going away. We may be leaving for a few days but simply to take the message back home, to rally our troops,” Durbin said. He added there would be another vote on extending the benefits when the Senate returns.

Benefits expired for 1.3 million people on Dec. 28, and since then the Senate has struggled to put together a package that will gain enough Republican support to prevent a filibuster. Two different proposals failed earlier this week, dimming the prospects for the long-term unemployed who hope to see their benefits restarted.

Republicans first demanded that any benefit extension be offset by other savings, and then complained when Reid would not allow an open amendment process. They ultimately rejected Reid’s offer to allow five amendments on each side because the 60-vote threshold he said would make it all but impossible for GOP amendments to survive.

Reid now charges that the Republicans simply don’t want the benefits to pass at all, but Sen. Chuck Schumer, D-N.Y., predicted the upcoming weeklong recess would change that.

“When Republicans head back to their states this week they’re going to hear from people who have lost or about to lose their unemployment benefits and they may well change their minds,” he said.

Senate Republicans, for their part, are saying Democrats are the ones playing political games, pointing to the widely-reported election-year strategy of the Democrats to focus on income inequality issues.

“It’s no secret that Democrats plan to spend the year exploiting folks who are still struggling in this economy for political gain. They’ve been telling reporters that for weeks,” Senate Minority Leader Mitch McConnell, R-Ky., said Wednesday.

House Democrats have also pushed for an extension of the benefits, though House Speaker John Boehner, R-Ohio, said that any proposal to pass the House must be paid for.

During a press conference earlier Thursday, House Minority Leader Nancy Pelosi, D-Calif., called on Boehner to cancel the upcoming recess until Congress passes an extension of benefits.

But Reid waved off that suggestion. “I think its probably a pretty good idea that the senators go home,” he said.

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