Who Should Pay for Extended Unemployment Benefits?

Politico reports progress in the Senate toward renewing Emergency Unemployment Compensation. The “biggest sticking point” may again be amendments, it notes.

As I said last week, the effort to renew EUC broke down because Republicans wanted to offer amendments to the short-term, stopgap bill that was one of the options Majority Leader Harry Reid proposed.

Some of those amendments would have offset the costs in ways that many, if not all Democrats would have found too objectionable to vote for, even though defeating them could have led Republicans to again block a vote on the bill itself — and blame them for the harm.

Here, as promised, are how two of them would pay for the short-term extension. Each answers the question in the title above differently, but both deny safety net benefits to vulnerable low-income people.

Low-Income Children Should Pay for It

Senator Kelly Ayottte (R-NH) fished an old proposal out of a file and put some gloss on it. Her amendment, as originally proposed, would deny the refundable part of the Child Tax Credit to immigrants who don’t have Social Security numbers — even if their children are U.S. citizens, as an estimated four million are.

Well over two million families would have to pay, on average, $1,800 more in taxes a year, according to figures in a 2011 report by the Treasury Department’s Inspector General. That’s a big bite, since they reportedly earn, on average, $21,000 a year.

The money saved by denying the credit to immigrants who dutifully pay their taxes would far exceed the costs of the three-month extension Senator Ayotte wanted to attach it to.

Her amendment would commit nearly as much to restoring the full cost-of-living adjustment to pension benefits for some former members of the military services. The COLA took a nick in December’s budget deal.

As you might imagine, there have been howls from diverse quarters. So Ayotte cleverly aims to put Democrats in a bind, since a vote to protect low-income children, most of them Hispanic, would be a vote against our veterans.

Now she’s amended her amendment to single out only immigrants whose children aren’t citizens — and styled it solely as a way of righting a wrong “against our men and women in uniform.”

It’s nonetheless a punitive pay-for, affecting a million or so children who had no say in where they were born or where they live now.

Severely Disabled Workers Should Pay for It

Senator Reid found some of his pay-for in the President’s last budget, which proposed a dollar-for-dollar reduction in SSDI (Social Security Disability Insurance) benefits when recipients receive unemployment benefits.

Senator Rob Portman (R-OH) took this dubious cost-saving idea and made it far worse, as the Center on Budget and Policy Priorities explains.

Basically, his amendment would define eligibility for unemployment benefits as proof that the laid-off disabled worker was engaged in substantial gainful activity — and ineligible for SSDI.

This would wholly redefine SGA, which under current rules, means earning more than $1,070 for nine months within a five-year period. Part-time work that pays less — or any work that’s been engaged in for less time — has no immediate effect on SSDI eligibility.

It does enable some recipients to supplement their far from generous monthly benefits — on average, $1,146 last month. And it gives them an opportunity to see if they can return to self-supporting work.

You’d think that a member of a party that believes in giving people a hand up out of the safety net would avoid anything that discouraged work.

But Portman’s amendment surely would because SSDI recipients who ventured back into the workforce could be dropped from the program if they were laid off, even if they didn’t claim the unemployment benefits they were entitled to.

They’d have to wait five months to reapply, just as newly-disabled workers do. And once they’d managed to get reapproved, they’d have to wait two years to qualify for Medicare, even if they’d been enrolled before.

I think it’s only fair to note that the Obama administration opened the door to this pay-for and that the Senate Democratic leadership kept it open. It’s an awful idea in principle, as Los Angeles Times columnist Michael Hiltzig says.

But it’s also true that Portman hasn’t, as he claims, taken a proposal from the President’s own budget — or that unemployment insurance and SSDI are “mutually exclusive.”

“We should never be forced to meet the needs of one vulnerable population by robbing another,” as Senator Tom Harkin (D-IA) told his colleagues a few weeks ago.

Both the SSDI and the Child Tax Credit pay-fors would do this. And they’d make permanent changes in the laws. A lot of harm to offset costs that would represent less than 0.014% of the federal budget.*

* This is the 10-year figure produced by the Center for Economic and Policy Research’s responsible budget calculator.

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2 Responses to Who Should Pay for Extended Unemployment Benefits?

  1. […] second part of the pay-for is a modified version of an amendment Senator Rob Portman wanted to offer. In its new iteration, severely disabled workers who receive UI […]

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