Long-term unemployment benefits expired on December 28, meaning an absence of checks this week for more than 1 million jobless Americans. That’s bad news for them, of course—but also the rest of us. According to a new analysis from the minority staff of the House Ways and Means Committee released Friday, $400 million was drained from state economies this week alone thanks to the lapse.
Unemployment benefits are one of the more effective forms of stimulus because the money is badly needed and thus spent right away. The Congressional Budget Office says 200,000 jobs will be lost this year if the benefits are not restored, and this week the damage began.
Big states were obviously the hardest hit, naturally: nearly $65 million came out of the California economy in one week alone, according to the analysis. And of course, states represented by Republicans who oppose the extension each suffered some economic harm. Senator John Cornyn twice blocked a vote on an unemployment insurance extension before the holiday recess, and his home state of Texas lost $21.8 million this week.
Yet Republicans, so far, have not expressed any desire to extend the benefits. “Every week that Republicans fail to act tens of thousands of additional long-term unemployed Americans lose this vital lifeline as they look to get back on their feet after the worst recession in generations, and the economy in each state is taking a hit,” said Representative Sander Levin, the ranking member on Ways and Means.
Senator Harry Reid has promised a vote early next week on a bill by Senators Jack Reed and Dean Heller to extend the benefits for three months, with no offsetting spending cut, so that a longer-term bill can be worked out. But Heller is the only known Senate GOP sponsor to date, and House Speaker John Boehner has said he doesn’t want any bill without a pay-for attached.
If that bill fails, Democrats have a couple options this month: an extension of benefits could perhaps be folded into either the farm bill, which is in conference negotiations, or into the several omnibus spending bills that need to be finalized soon. In those latter two cases, Republicans would no doubt extract some sort of price from Democrats for extended benefits, but perhaps a solution is still possible.
But, again, Republicans seem to have other plans. House majority leader Eric Cantor announced Thursday his plans for the new year: yet another vote to modify Obamacare, this time adding new security requirements to the health insurance exchanges. The White House has said there is no danger of breaches, and some observers, like Steve Benen, think Cantor’s bill is simply a ploy to scare people away from the exchanges.
In any case, while Cantor fiddles around with his messaging bill on Obamacare (which will never be signed into law), his home state of Virginia lost $2.8 million in economic activity this week, as 9,700 people lost benefits. That’s going to be hard to justify as time goes on, both for Cantor and his colleagues.