As you may recall, in late July, the Senate finally managed to pass the latest extension of the two related programs that fund expanded unemployment insurance benefits. Now the programs are again about to expire. And prospects for renewal are even more uncertain.
The prior extension got hung up because the Republicans insisted that it be paid for. But, of course, they wouldn’t have accepted a tax increase offset. We know this because they had no end of objections when a larger bill that included the UI benefits extension had a pay-for that would have closed a couple of costly tax loopholes.
During the stalemate, about 2.5 million jobless workers lost their UI benefits. These were restored retroactively, though at a reduced rate. A better thing than no extension at all. But what it meant was that the six-month extension actually funded future benefits for less than five months.
So here we are again, with expanded unemployment benefits due to expire on December 1. Congress reconvened for one post-election week, then went home for a longer Thanksgiving break than most of us enjoy. That leaves perhaps just one voting day before the benefits expire.
We can expect another donnybrook over the pay-for issue — maybe even over the principle of a further extension. There are, after all, some members of Congress — Senator Jon Kyl, for example — who maintain that UI benefits deter jobless workers from seeking employment.
So what will happen if Congress ends this session without approving another extension?
The National Employment Law Project reports that more than two million jobless workers will lose their benefits during the holiday season — about 800,000 of them on December 4. The number will swell to nearly five million in the next couple of months.
And go on swelling as more and more workers exhaust the benefits available through their regular state UI programs. In all but a few states, the maximum is 26 weeks.
As of October, jobless workers who were actively seeking employment had been looking for an average of nearly 40 weeks — nearly three and a half months more than most regular state UI benefits cover. Nearly 42% had been looking for more than 27 weeks.
And no wonder when, according to the Economic Policy Institute’s analysis of the latest U.S. Labor Department Job Openings and Labor Turnover Survey results, there are five job seekers for every job opening.
Here in the District, 8,017 jobless workers will lose their UI benefits before the end of December. More than 3,300 of them will be cut off immediately. The remainder will either lose some of the additional weeks they would have qualified for or exhaust their regular 26 weeks, with no federally-funded lifeline beyond.
Views across our borders are equally dismal. In Maryland, 13,915 jobless workers and their families may face the holidays with no source of income. In Virginia, the total facing a December cut-off is 30,871.
We can expect the Republicans — maybe some Democrats too — to argue that any extension of expanded UI benefits must be fully paid for because we can’t afford to add to the deficit.
Well, EPI estimates that extending the expanded UI benefits for a year will create the equivalent of 723,000 jobs. This because recipients will immediately spend most, if not all of what they get on basic necessities.
The result will be higher tax revenues and less spending on safety net programs. So, the analysts say, the actual cost of a year-long extension would be only $25.9 billion, rather than the $65 billion “sticker price.”
A mere drop in the bucket compared to the unpaid-for $400 billion the federal government will lose in the next 10 years if the Bush-era tax cuts for the wealthiest 2% of Americans are permanently extended, as the Republicans insist they must be.
And the modest impact on the deficit would be only temporary, since no one’s saying the expanded UI benefits should continue indefinitely.
NELP, among others, is calling for an extension through 2011. This makes good policy sense because the unemployment rate will almost surely remain extraordinarly high. It makes even better political sense because another short-term extension will kick the issue into the opening days of the next Congress.
The new Republican House Majority Leader will want to prove he’s serious about rolling back most categories of discretionary spending to the pre-Recovery Act level. The strengthened Republican minority in the Senate will still be led by Senator Mitch McConnell, whose top priority is to make President Obama a one-term president.
The Republicans banked on voters blaming the President for their economic woes — and election results suggest they were right. Every reason to believe that at least those on the Senate side will pursue the same strategy going forward.
So those of you with voting representation in Congress need to make your voices heard loud and clear. I’ve got an editable online letter you can use.
And, as always, I ask that you pass the word along.