Hurting Unemployed Americans For Political Purposes‏

April 5, 2010

by Faiz Shakir, Amanda Terkel, Matt Corley, Benjamin Armbruster, Zaid Jilani, and Alex Seitz-Wald

ECONOMY

Hurting Unemployed Americans For Political Purposes

Last week, the Labor Department announced the good news that the U.S. economy added 162,000 jobs in March, "the most created in nearly three years." "We have some more work to do, but I think the economy is definitely getting stronger," said Treasury Secretary Tim Geithner. "We've made a lot of progress, we've got some work to do still and it's going to take some time to heal the damage." Included in the Labor Department's April 2 report was the fact that nearly 15 million Americans remain out of work, putting the unemployment rate at 9.7 percent. Unfortunately, beginning today, hundreds of thousands of these people will be losing their unemployment benefits. On March 25, Senate Republicans, led by Oklahoma's Tom Coburn, blocked "a $9 billion measure containing one-month extensions of unemployment insurance." His move had the backing of the GOP leadership, and now unemployed Americans will have to wait for relief until Congress returns from recess on April 12, when Senate Majority Leader Harry Reid (D-NV) promises that extending benefits will be the top priority. "It is inexcusable and irresponsible for Republicans to once again block the extension of these benefits," said Reid. "Their excuses ring hollow to American workers who lost their jobs through no fault of their own and are trying to put food on the table, pay the rent, and take their children to the doctors."

FISCAL 'RESPONSIBILITY' AT THE EXPENSE OF THE UNEMPLOYED: Coburn is taking a page directly out of the playbook of Sen. Jim Bunning (R-KY). In late February, Bunning objected to Reid's request for unanimous consent to approve a month-long extension of unemployment insurance benefits. Bunning finally relented after several Republicans began pressuring him. This time, however, the GOP leadership is standing solidly behind Coburn. In fact, Sen. Jon Kyl (R-AZ) is even saying that Republicans should have given Bunning more support. "It took an act of courage like Sen. Bunning's to perhaps jolt people into the awareness of how bad it had really gotten," he said. The issue for Republicans is that no unemployment benefits should be extended unless Congress offsets the cost of the move by taking funds out of the stimulus. Coburn has actually tried to argue that out-of-work Americans will appreciate the GOP obstruction: "Hopefully they're not going to stay unemployed, and when they're reemployed, one of two things is going to happen: Either we're going to cut spending or somebody's going to raise their taxes." However, as the National Employment Law Project's Judy Conti explained, offsetting unemployment benefits is just bad economics. "Every economist from every side of the political spectrum will tell you that unemployment benefits are most stimulative when they are not offset," she said. "In the history of the unemployment program, we have never off set these programs." Democrats are arguing that the unemployment benefits extension is considered "emergency spending" and therefore not subject to paygo rules. Sen. Debbie Stabenow (D-MI) has also wondered why the GOP insists on fiscal responsibility only at the expense of the less well-off: "Under President Bush, under the Republican Congress, that went away pretty fast. By not paying for tax cuts for the wealthiest Americans, somehow, that was OK."

REAL EFFECTS: The expiration of unemployment benefits will hit Americans across the nation. The Labor Commissioner of Maine, where approximately 1,500 people will lose benefits this week, said that Congress' delay is an "administrative nightmare." New York is estimating that 46,000 residents will lose benefits. In Utah, where 1,300 people will see their benefits lapse today alone, the Department of Workforce Services is urging people to continue filing their weekly benefit claims in the hope that Congress will quickly pass an extension that will apply retroactively. However, it's not only unemployment benefits that Republicans are blocking; the package they're holding up also included extensions for COBRA health insurance subsidies, a delay on cuts in Medicare payments to doctors, poverty guidelines, and authorization for the National Flood Insurance Program (NFIP). Record amounts of rainfall in the Northeast have brought the critical nature of the NFIP into focus in recent weeks. Flooding in Rhode Island was the worst it's been in 100 years, Boston saw its wettest March since record keeping began in 1872, while "bridges and highways have washed out from Maine to Connecticut and sewage systems have been overwhelmed to the point that families were asked to stop flushing toilets." National Guard troops were mobilized to aid residents in both Rhode Island and Massachusetts. According to the Property Casualty Insurers Association of America, there are 5.5 million flood insurance policy holders in flood plains, homeowners who are now unable to renew their policies. If any of those homeowners were victims of the current flooding, they will "face complications" filing claims.

GOP BASHING UNEMPLOYED AMERICANS: Despite backing Coburn's blockade, Kyl on Sunday claimed that he supports "extending unemployment benefits because unemployment is so high." In fact, Roll Call reported last week that Republicans are planning to blame Democrats for the lapse in benefits, believing the issue "can play to their favor." Senate Republicans are pointing to the fact that House Democrats refused to go along with a plan agreed to by Reid and Senate Minority Leader Mitch McConnell (R-KY) to pass a one-week extension of the benefits. The House, however, had already voted for the one-month extension. Additionally, it's unclear whether Republicans actually want to renew the benefits at all. Last month, Kyl said that unemployment benefits dissuade people from job-hunting "because people are being paid even though they're not working. ... [C]ontinuing to pay people unemployment compensation is a disincentive for them to seek new work." Rep. Steve King (R-IA) has warned against turning the "safety net" of unemployment benefits into a "hammock," and Rep. Dean Heller (R-NV) has said that the government may be creating "hobos." Americans aren't receiving unemployment benefits because they're lazy, despite the GOP's claims. In this recession, the "share of the long-term unemployed who have been out of work and pounding the pavement in search of a new job for at least six months is at a record-breaking 44.1 percent, or 6.5 million workers." A major reason for this long-term unemployment is that there just aren't enough jobs for the unemployed, with more than "six unemployed workers per job opening."