Congress has apparently decided that unemployed people are an expensive nuisance. Just in time for their own Thanksgiving break, a minority in the House of Representatives last week successfully blocked reauthorization of federal unemployment benefits, effectively yanking the safety net that has kept millions of Americans from total devastation. If Congress doesn’t act quickly next week, the long-term unemployed will start dropping from the benefits rolls. By Christmas, two million will be gone—more than one in ten of the total 15 million currently unemployed Americans.
There is just a tiny window, between Congress’s return on Monday and the expiration of the programs on Tuesday, for averting immediate cuts. To do the right thing, Congress must reauthorize the federal commitment to the long-term unemployed, people out of work for six consecutive months, as this country has done during high unemployment ever since the Great Depression, and ensure that commitment for a full year. (Economists project that US unemployment will remain above nine percent through the end of 2011.)
This struggle over helping the economy and the unemployed has continued throughout the recession. Each stopgap measure to reauthorize the programs has met obstruction—and even complaints that unemployment insurance for those who have exhausted their twenty-six weeks of state benefits discourages the unemployed from looking for work. In fact, the average unemployment extension check is a mere $290 a week, replacing only half of the average family’s expenditures on transportation, food and housing. This modest assistance provides jobless workers a major incentive to look for work.
When these programs expired in June, it took Congress seven weeks to enact reauthorizing legislation, in which time more than two million unemployed Americans and their families saw their unemployment benefits cut off. Though benefits were retroactively provided to the unemployed, going weeks without this lifeline can be the last straw, forcing unemployed workers to run through their savings or lose their homes. Last week, as the House leadership tried to fast-track the renewal, the obstructionists won again.
The so-called "deficit hawks"—the same people who want budget-busting, extended tax breaks for the rich—are not just hurting jobless Americans. Their sudden concern for the deficit when it comes to renewing unemployment insurance will, paradoxically, damage the economy.
From friends, family and neighbors, most Americans have seen the toll of long-term unemployment, the result of a cruel game of musical chairs in which five workers compete for every job opening.
We hear from many of them. There’s Robert Pugh, in Santa Barbara, California, who earned his MBA after a long career as a chef and found work as a financial analyst in small business and commercial banking, only to be laid off last June. He will lose his unemployment benefits next month—and, after that, his apartment and health insurance. There’s Robert Horvath of Glenview, Illinois, also laid off in June after a career in banking. Of his $1,500 in monthly benefits, due to expire in December, he needs $1,200 just for health insurance. At 58, he has applied for all kinds of jobs and received no offers. There’s Sharron Tetrault from Mount Vernon, New York, who has worked as an event planner for nonprofits for fourteen years, but since being laid off in January has struggled daily to find work. She’ll be cut off unemployment insurance in the coming weeks if Congress fails to renew the programs, "and it’s only a matter of time before my phone gets shut off," she says. "How will employers call me?"
These are not irresponsible losers. They are victims of disastrous economic conditions. And the nation will "save" nothing by condemning them to poverty and homelessness. Rather, we will see a downward spiral in which yet more jobs and more tax revenue are lost.
In fact, just as the House torpedoed the federal programs last week, economic experts, including orthodox fiscal conservatives, begged to differ. A new Department of Labor study, commissioned by the Bush administration and co-authored by the chief economic adviser to John McCain’s presidential campaign, found that the federal programs had injected enough into the economy to reduce the unemployment rate by 1.2 points. The Congressional Budget Office has ranked unemployment insurance as the most effective stimulus to the economy, generating $1.90 in economic activity for every $1 the government spends.
Even the Concord Coalition, an advocacy group dedicated to cutting the deficit, questions the rationale of opposing unemployment insurance. Concord’s chief economist, Diane Lim Rogers, has said that "those who use their ‘worry’ about our longer-term fiscal outlook as a reason to oppose extended unemployment benefits don’t want to reduce the deficit as much as they want to get rid of unemployment benefits."
And the American public emphatically supports the federal programs. In a poll released last week, three in four of those surveyed agreed that "it is too early to start cutting back benefits for workers who lost their jobs." Two-thirds said the programs should continue until there is a significant drop in the unemployment rate.
Unfortunately, the jobs picture shows no sign of significant improvement in the next year. That means the federal programs must remain in place at least that long, and reauthorizing them now, through 2011, will avert more pain, uncertainty and, in Congress, wasteful gamesmanship.
Amazingly, while some in Congress believe $5 billion per month for unemployment benefits costs too much, they insist on borrowing $700 billion over the next decade to give more tax cuts to the richest 2 percent of Americans.
This Thanksgiving, those 2 percent have much to be grateful for. The rest of us should call our members of Congress.