Next Round in Battle to Renew Long-Term Unemployment Benefits

March 10, 2014

Last Friday, the Bureau of Labor Statistics reported a sharp increase in the number of long-term jobless workers — 203,000 more who’d been unemployed and actively looking than in January.

This brought the average number of weeks jobless workers had been looking up to 37.1 — about 11 weeks more than most state unemployment insurance programs cover.

At least two million jobless workers have no UI benefits now, but would if Congress renewed Emergency Unemployment Compensation — and back-dated it to the end of December, when the program expired.

As I’m sure you know, Senate Democrats have been trying to pass an EUC extension since mid-December. Republicans haven’t delivered the five votes needed for the Senate to vote on the extension itself.

The ostensible hang-up is the offset, i.e., the source or sources of funds that would keep the extension from adding to the near-term deficit. But some of the potentially persuadable Republicans have further complicated matters by insisting on amendments to reform UI.

And as if that weren’t enough, they wanted the package to include a repeal of the temporary, modified cost-of-living adjustment for military pensions that was part of the December budget deal.

Well, the Senate took care of the repeal in mid-February, using a pay-for Republicans wouldn’t accept for the EUC extension. Now it’s going back to EUC again.

Majority Leader Harry Reid is calling for a six-month extension — five months shorter than the paid-for version he’d earlier proposed. He’d use savings already achieved in the new Farm Bill as the offset. Politico reports the cost at about $12 billion. That would leave about $11 billion for deficit reduction.

Seven Republicans have countered with a five-month extension. They’ve got an altogether different pay-for. And they fold in program “improvements,” including one that has little or nothing to do with unemployment compensation.

Too much to cram into one post. So I’ll deal with the pay-for here. As you’ll see, the Gang of Seven seems to have moved toward the Democratic majority. This, alas, is not an altogether good thing.

The pay-for has three parts. The first would extend so-called pension smoothing provisions that Congress earlier used to help pay for the highway bill.

Basically, pension smoothing allows employers to temporarily reduce their contributions to employee pension plans. This raises revenues for awhile because the contributions are tax-deductible.

But it then loses revenues because employers have to make up what they didn’t contribute earlier. The losses, however, fall outside the 10-year period used to estimate what federal laws will cost.

In short, it’s what the Center on Budget and Policy Priorities calls a “timing gimmick.” It also, as the Committee for a Responsible Federal Budget says, raises the risk that pension funds will need a bailout, thus further increasing federal costs.

Senate Republicans shot down pension smoothing when Reid tried to use it for a three-month EUC extension — or at any rate, they blocked the bill, claiming (rightly) that he limited their chances to amend it.

A 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 benefits would lose the same amount from their SSDI (Supplemental Security Disability Insurance) benefits.

This too was a pay-for Reid earlier offered — and borrowed from the President’s proposed budget. But it still “uniquely burdens” disabled workers, as Los Angeles Times columnist Michael Hiltzig says.

It also undermines the work incentive in SSDI. And it establishes a terrible precedent of raiding Social Security to fund other benefits programs, as the Consortium for Citizens with Disabilities warned several months ago.

The last part of the pay-for extends customs users fees through 2024. These are charges imposed for certain activities of the U.S. Customs Service, e.g., clearing merchandise for import.

So for better and worse, the Gang of Seven seems to have come round to a pay-for the Democratic majority could accept. But, as I said, it’s paired with some problematic “reforms” to the EUC program.

Politico reports that Reid may take another stab at passing an EUC bill this week. How far he’ll move to pick up the Republican votes he needs remains to be seen.

How far he should move is a daunting question.


Long-Term Jobless Veteran Asks the Million Dollar Question

January 30, 2014

“I’ve served my country, honorable discharge …. I’ve done everything right. College, school, no crime, no record. Pay my taxes. Make sure my daughter went to school … Got her in college.

“And I’m sitting here struggling. I’m now ready to take a street sweeper job if they would offer it to me. So I’m asking you the million dollar question. What am I supposed to do right now to keep a roof over my head, food in my stomach, clothes on my back, car insurance paid?”

The desperate woman whom I’m quoting was addressing a spokesperson for Senate Minority Leader Mitch McConnell.

She was part of a group of advocates and jobless workers who were delivering petitions, representing some half million signatures, urging the top Republican leaders in both the House and Senate to let Congress members vote on a bill to renew Emergency Unemployment Compensation.

McConnell’s spokesperson says to her, “I can only tell you what we do here in the Senate. I have no control over your life.”

But his boss sure does. If he hadn’t locked horns with Senate Majority Leader Harry Reid, a bill renewing EUC would now be awaiting an uncertain future in the House.

As things stand, more than 1.6 million long-term jobless workers and their families may have no source of cash income. Nearly 72,000 more are likely to lose their benefits by the end of this week. And no one, to my knowledge, is predicting an end to the stalemate.

Majority Leader Reid offered the Republicans two options. The first, which had earlier gotten enough Republican votes to open debate, would have renewed EUC for three months, back-dated to when they expired.

Costs for this version — about $6.4 million over 10 years* (less than 0.014% of the federal budget) — were not offset.

Well, Republicans insisted on an offset. The second version, which would have renewed EUC through November, provided one — and cut back on the number of weeks the program would cover.

Republicans didn’t like this bill either. They wanted to propose other offsets in the form of amendments, but only for the three-month, stopgap bill.

Reid limited the number of amendments they could offer — presumably so they couldn’t tie up the process indefinitely.

He also insisted that any amendment would have to pass with 60 votes. McConnell understandably objected because 15 Democrats would have had to vote in favor, assuming all Republicans did.

So Republicans wouldn’t provide the votes needed to move forward on either bill.

It’s hard to know whether they’re sincerely trying to get a bill they could vote for or, as Washington Post blogger Greg Sargent has suggested, reframing the debate as an issue of fiscal responsibility so as to mask their party’s ideological hostility to any EUC renewal.

What’s not hard to know is that some of the amendments they’d proposed seem like what are commonly called poison pills, i.e., amendments deliberately designed to repel a bill’s supporters. More about these in a separate post.

Arthur Delaney at Huffington Post reports that Senator Jack Reed, who’s been leading the charge for EUC renewal, has been talking with “a handful of Republicans” about a pay-for “that would make them happy.”

They may strike a deal, but like as not, it will be for three months — until the end of March, assuming it’s retroactive. The Republican majority probably won’t like it. Some Democrats may not either, considering what would make some in that handful happy.

So will we have another kerfuffle over amendments? And if not, what are the prospects in the House, when Speaker John Boehner has put additional conditions on a renewal?

I can’t help feeling that the desperate woman and all the other jobless workers who’ve got the same million dollar question are pawns in a partisan strategy that has little or nothing to do with fiscal responsibility.

* The Congressional Budget Office conventionally projects costs over a 10-year period and takes account of any expected revenue increases that a measure like this would produce. The estimate thus does not mean that the federal government would continue to incur costs. It does, however, reflect some out-year revenue increases.


Unemployment Benefits Battle Lost, But Not the War

December 27, 2013

The Emergency Unemployment Compensation program ends tomorrow, making for a very unhappy New Year for about 1.3 million jobless workers.

These are workers who qualify for unemployment insurance, but have been jobless longer than their regular state UI programs cover. Over the course of the year, an additional 3.5 million will be left in the lurch unless Congress belatedly renews the program.

And it’s going to be even harder for them to find work precisely because they won’t have nearly as much money to spend. Not that EUC benefits are generous, mind you — on average, only $289 a week now.

But without the spending they enable, the economy will have 240,000 fewer jobs, according to the U.S. Department of Labor and the President’s Council of Economic Advisers. The Economic Policy Institute puts the loss at 310,000 jobs.

The DOL/White House experts have produced estimates of the number of jobless workers affected for each state and the District of Columbia and also for job that would be saved.

So we learn that 18,200 jobless workers in the District will need and not have EUC benefits in the upcoming year. And there will be 993 fewer jobs than there would be if Congress passed an extension.

Not a happy prospect for a city where last month’s unemployment rate was 8.6% — and more than twice as high in Ward 8, which was in deep troubles long before the recession began.

The White House and Democrats in Congress will try again to get the EUC program extended. Republicans, at this point, don’t seem interested, though the National Journal cites a few exceptions, all but one of them hedged.

For some, there’s an ideological aversion to safety net programs — except perhaps those that are highly targeted and very short term.

Thus we have Senator Rand Paul explaining that extending EUC would be “a disservice” to jobless workers because “when you allow people to be on unemployment insurance for 99 weeks [as is no longer possible], you’re causing them to become part of this perpetual unemployed group in our economy.”

The larger sticking point, however, is the cost of the extension, estimated by the Congressional Budget Office at $25.2 billion, once the revenue boost is factored in.

House Speaker John Boehner has said he’ll consider an EUC extension plan “as long as it is paid for and … there are other efforts that will help get our economy going once again.” What those might be we’re left to guess.

Over on the Senate side, Majority Leader Harry Reid says he’ll try to get a vote on an extension bill on January 6 or 7. This would be a stopgap, three-month measure, without a pay-for. The Democrats claim, as they have in the past, that no offset is needed because the bill is emergency legislation, which, by definition, requires no offset.

Needless to say, getting enough Republicans to allow a substantive vote on the bill won’t be easy. Finding an offset may not be either, now that the budget deal has tapped some of the likely sources — or rather, finding an offset that Republicans will accept.

Americans for Tax Fairness notes that Congress could pay for the extension — and have lots of money left over — by closing just one corporate tax loophole.

But where there’s a will, there’s a way. And in this case, the will depends on what members of Congress are experiencing now that they’re home. Jobless workers in their faces. Stories on the evening news. Op-eds in hometown newspapers. Etc.

We need a big push now. And it’s a comfort to know that advocacy organizations are working hard on this.


Another Anxious Holiday Season for Jobless Workers

November 21, 2013

The holiday shopping season is upon us, early as it is. But I doubt many jobless workers and their families will be stuffing their shopping bags with wished-for gifts.

Only about 3.9 million of the workers are receiving unemployment insurance benefits, though 11.3 million of them were actively looking for jobs and so counted among the unemployed last month.

And a third of the more fortunate will lose their benefits just three days after Christmas unless Congress renews the Emergency Unemployment Compensation program, the National Employment Law Project warns.

An additional 850,000 or so workers will exhaust their regular state UI benefits by the end of March and have no EUC to turn to. The number could swell to 4.8 million by the end of 2014, says the top economist at the White House.

If past is prologue, nearly half the workers who receive state UI benefits will still be jobless when they come to end of the weeks their state’s program covers — 26 in most states, but considerably fewer in some.

The benefits are far from generous — on average, $269 a week. But UI benefits generally were enough to keep 2.4 million people out of poverty last year, before sequestration took a bite out of EUC.

Forecasters for the Federal Reserve Bank of Philadelphia expect the rate next year to average out at 7.1%. Today, it’s 8% or higher in 16 states and the District of Columbia. So it’s hardly time to pull the plug.

More importantly, as the Economic Policy Institute argues, the job market is scarcely better than it was a year ago, when you look at the number of job openings in light of the number of job seekers.

The unemployment rate is lower mainly because people have given up looking or decided not to start because the odds of finding a job are about one in three.

Some of the nearly 6.1 million “missing workers,” i.e. those who’d be employed or looking if the labor market were healthy, may be getting education or training credentials that will improve their unemployment prospects.

But, as the Urban Institute says, other stay-outs and drop-outs, especially those who are older, may have a hard time getting work even when there’s more available. A harder time, of course, if there isn’t.

EPI figures that extending the EUC program would create and/or preserve an estimated 310,000 jobs because long-term jobless workers, most of whom are “cash-strapped,” will spend their money on basic necessities.

The money that would flow to local businesses would support not only jobs there, but in the businesses that serve and supply them. So we’d have their workers paying taxes — and more tax revenues from the businesses too.

A large portion of the cost of extending the EUC program would thus be offset by the revenues, plus some savings in other safety net programs.

Contrariwise, failure to extend it would put a damper on our already anemic economic growth and (horrors!) perhaps slow the decline in the short-term deficit.

And all to save an effective $11.1 billion — 0.3% of next year’s federal budget, according to the nifty calculator the Center for Economic and Policy Research provides.

Democrats in Congress reportedly hope to fold an EUC extension into the deal that’s currently being negotiated to prevent another government shutdown, while also replacing — or at least, easing — the cuts forced by sequestration.

House Republicans apparently want no such thing — or so a highly inflammatory post on the Ways and Means Committee site indicates.

Politico, however, reports that Republicans on the budget conference committee “would consider” adding an EUC extension “as a bargaining chip.” Also that the chances of a bipartisan deal are maybe a bit better than 50-50.

So we could be looking at another of those last-minute kick-the-can-down-the-road deals. What that would mean for the EUC program is a question mark.

But, as George Zornick at The Nation observes, “many past renewals have happened during crisis standoffs.” The next, should it materialize, would come to a head in mid-January.

It would be ever so much better for all concerned if Congress delivered balanced relief from sequestration — and relief for long-term jobless workers — well before Christmas.


A Happy New Year to You and Two Million Jobless Workers

January 2, 2013

Before I knew Jesse, I thought that New Year’s Day was mainly for recovering from hangovers — and for making resolutions. Nothing like a headache to make you resolve to lead a better life.

Now I know the day is also for eating greens (for money), black-eyed peas (for luck), some sort of pork (we’re not sure for what, though I’ve read it represents progress) and cornbread (for nothing, so far as I know, except that it goes well with the mandatory dishes).

I’ve made the usual resolutions — eat less, exercise more, etc. For the blog, I’ve resolved not to be so persistently gloomy and angry. Surely there’s some unequivocally good news to impart, even in these troublesome days.

I know from past experience that the new leaves I vow to turn over usually wilt before the crocuses sprout. But it’s surprisingly easy to begin the new year with a cheerful post.

Because more than two million jobless workers who were about to lose their unemployment insurance benefits will get them after all, thanks to the last-minute, barebones bill Congress passed to pull us back from the so-called fiscal cliff.

The workers, as you probably know, are those who’ve been actively looking for new jobs for more than 26 weeks — the period that most regular state UI programs will cover.

They’ve been getting federally-funded benefits under the Emergency Unemployment Compensation program that was originally part of the Recovery Act.

The last extension of the program kept it alive, though in shrunken form, through December.

So all those jobless workers faced a hard cut-off of their EUC benefits — this at a time when there are still more than three job seekers for every job available.

Another million or so workers would have had no UI benefits by April — and by the end of the year, about three-quarters of all jobless workers.

The belated, but welcome action by Congress will be good not only for many of these workers, but for our slowly recovering economy, which will surely need all the help it can get in the months to come.

As go-to economist Mark Zandi has testified, extending UI benefits will deliver a bigger bang-for-the-buck boost to the economy than virtually any other measure in the stimulus arsenal.

The Congressional Budget Office recently reported that the spending will save and/or create 300,000 jobs — or looked at another way, that 300,000 jobs would have been lost if Congress had refused to invest in EUC benefits.

But economists didn’t save the EUC program. We’ve got to give the President credit for insisting on the extension.

More credit, I think, is due to the advocacy organizations that kept the issue on the front burner — and to 134,000 of us in the grassroots who joined the effort.

This in itself is good news because it tends to suggest our voices matter — and, of course, in some cases our votes.

Worth recalling in the months ahead because we who care about poor, near-poor and about-to-be-poor people have our work cut out for us.

UPDATE: I should also have acknowledged the majority of Democrats in the Senate and the House Democrats who urged their colleagues to extend the UI benefits.


Extending Unemployment Benefits Won’t Help All Jobless Workers

August 24, 2012

Looking back on my post about the expiring federal unemployment insurance benefits, I realized I’d left out important parts of the picture.

One is the growing number of workers who’ve been jobless more than 99 weeks — longer than the maximum for benefits even when both federal programs were in full force.

The other is that lots of workers who lose their jobs through no fault of their own can’t get UI benefits at all.

In 2010, for example, only 44% of these workers got any benefits from their state programs, according to a recent brief from the Urban Institute.

The brief documents what we probably would have guessed. A very high percentage of the left-out workers are “disadvantaged,” e.g., blacks and Hispanics, single mothers, teens and young adults.

Both blacks and Hispanics are also unusually likely to be among the long-term unemployed, another Institute brief tells us.

We know from other sources that single mothers were far more likely to be jobless and actively looking for work last year than married mothers — or the labor force as a whole. This was also true for the 16-24 year old age group.

The disadvantaged workers are less likely than others to get UI benefits because states have eligibility rules that tend to exclude them.

These, in some cases, are related to the workers’ disadvantages in the labor market.

Virtually all states, for example, have minimum earnings requirements. The time period they use varies, but the earnings threshold will always disadvantage low-wage workers whose jobs weren’t ongoing and full-time.

Workers who got jobs through temporary agencies are often out of luck — even if they put in a full day, every day.

Only 22 states will provide benefits for workers who have to quit for reasons most of us would find compelling, i.e., domestic violence, the need to care for a sick or disabled family member.*

Not surprisingly, single mothers seem to fall into this group, though the Institute’s report isn’t altogether clear on this.

Many are also left out in the 23 states that won’t provide benefits for workers who are looking for a new job that isn’t full time. We know anecdotally that single mothers may have no alternative because they can’t afford the high costs of child care.

The Recovery Act gave states a financial incentive to eliminate such barriers in their UI programs.

Thirty-nine states and the District of Columbia adopted the first and only partial payment option — or already had it on the books.

But only 34 states and the District took the minimum three actions that netted them the full amount they could receive.

Just one and the District went for the fully battery. Still barriers for disadvantaged workers in both jurisdictions, however.

Some states have since tightened up their requirements — this rather than raise the imprudently low UI taxes they’d decided to collect from employers.

The end result is a patchwork of coverage.

But there are only five states in which more than half of all jobless workers got UI benefits in 2010. And only one — Alaska — where the rate topped 60%.

* Eleven other states will provide benefits for workers who quit because of domestic violence, but not because of a family member’s illness or disability.


The Fiscal Cliff No One Is Talking About

August 6, 2012

Well, not no one. But no one with the political clout — and determination — to keep many millions of Americans from falling off a cliff.

And it really is a fiscal cliff — unlike the convergence of action-forcing events that everyone is talking about, i.e., the expiration of the Bush tax cuts and the onset of the across-the-board spending cuts triggered by the Super Committee’s failure to agree on a more sensible way to reduce the deficit.

In late December, the Emergency Unemployment Compensation program will expire, unless Congress extends it.

This, recall, is one of two federal programs that provide benefits for a limited period of time after jobless workers have collected as many weeks of benefits as their regular state programs allow — generally 26 weeks, though fewer in some states now.

Congress has already retrenched both programs.

As a result, the Extended Benefits program — the last phase in the benefits sequence — will shut down by mid-August because the law funds benefits only in states where unemployment rates are higher than they were in the recent past.

That leaves the EUC program. It’s already shrinking, such that jobless workers will soon get, at most, 73 weeks of benefits, counting the 26 most states offer.

The latest state-level unemployment figures suggest that benefits will end sooner in all but seven states and the District of Columbia.

But as things stand now, workers who lose their jobs this month will be on their own if they don’t find work before their state benefits end because the EUC program won’t be there for them.

Nor for workers who’ve already been jobless long to be getting EUC benefits. They’ll face what the National Employment Law Project calls “a hard cut-off.”

Hard indeed, especially when we see that nearly 5.2 million jobless workers have been actively looking for employment for more than 27 weeks — many for much longer.

Those who find work at all look, on average, for about 40 weeks, according to NELP. No wonder when there three and a half times as many job seekers as job openings.

The Congressional Budget Office expects the nationwide unemployment rate to remain over 8% through 2013. Congress has never let federally-funded unemployment benefits expire when the rate was this high.

But it’s a new day on Capitol Hill. Senator Max Baucus, Chairman of the Senate Finance Committee, says the issue isn’t on the radar screen — yet. Not a peep from his counterpart in the House, Congressman Dave Camp.

And President Obama doesn’t seem to be jawboning the issue, though he played a key role in getting the benefits extended last time the Bush tax cuts were due to expire.

This may just be a replay of the last two extensions. Wait till the last minute before enacting some sort of save.

A good strategy for Republicans, who had the leverage to scale back EUC — and for all we know, may have another cutback up their sleeve.

But I wouldn’t bet on it. The price tag of the last extension was about $30.1 billion over 10 years. Another extension would presumably cost less because it wouldn’t have to include funding for the EB program, even for part of the year.

But Congress — and the President — are anxious to come up with a way to halt the across-the-board cuts and still hit the agreed-on deficit reduction target.

They’re for sure going to extend the Bush tax cuts — though when and for whom remains to be seen. Many economists believe they should — at least for all but the wealthiest 2% — because a broad-based tax spike now could set back our sluggish economy recovery.

But the tax cuts will increase the deficit — unless they’re offset by deeper spending cuts or a revenue-raising overhaul of the tax code, i.e., a massive clean-out of the deductions, credits and the like.

I’ve got a hard time seeing Democrats and Republicans come together on the “grand bargain” we’re told could emerge. But ultimately they’ll agree on something.

With all the complex, divisive priorities in play, it’s not hard to imagine the EUC program falling by the wayside.

Party leader will say the answer is more job creation. Jobless workers would no doubt agree.

But in the meantime, those who’ve been looking hard and finding nothing could fall off a cliff and into poverty — if they’re not there already.


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