A Quick Thought on the Expiration of Long-Term UI

December 27th, 2013 at 10:22 pm

On the road with limited posting opportunities, but I wanted to take a quick moment to note that extended unemployment insurance benefits expire tomorrow, meaning over one million long-term unemployed will lose vital benefits; if the expiration is not reversed by congressional action, almost five million unemployed persons could lose benefits by end of next year.

You can learn the details of the case here, but I wanted to make one political economy point.  Though Republicans have been leading the call in favor of expiration, this is not a simple tale of good D’s and bad R’s.  It’s also the result of a fiscal policy standard, often supported by both parties, that stands firmly against any deficit spending.

Thus, when Rep. Boehner asked D’s a few weeks ago how they planned to pay for the $25 billion extension of UI, they were in a box.   Whatever spending cuts they could find were already in the little Ryan/Murray budget deal, the R’s would not countenance increasing tax revenues, and the notion of putting it on the deficit was largely verboten by both parties.

This is a mistake.  With long-term unemployment still highly elevated, adding a temporary extension of UI benefits to the deficit is totally legitimate fiscal policy.  It’s just become way too hard to find folks in DC who understand that anymore.

But not impossible.  Senators Reed and Heller, both from states with the highest jobless rates right now (RI and NV) have a proposal to extend emergency UI for three months.  The proposal does not hinge on finding payfors, though Reed–a longtime champion of helping the unemployed–says he’s happy to work on that once the extension’s in place.

It’s not a slam-dunk, but I could imagine the Senate quickly passing this upon their return, with renewed benefits retroactive back to when they were cut off.  But then there’s the House…far from a slam-dunk, that’s a three-pointer…with your eyes closed.

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7 comments in reply to "A Quick Thought on the Expiration of Long-Term UI"

  1. Code Compliant Guy says:

    Update, on the Senator Reed/Heller, 3 month UI extension, per an Annie Lowrey article in posted in the 12/27/13 NYT, the President called the Senators on Friday morning, December 27, to support the 3 month extension.

  2. Kevin Rica says:

    If we cut legal immigration, now running at close to one million per year, we could save enough jobs for all the long-term unemployed in less than two years.

  3. Fred Donaldson says:

    Unemployment benefits could be extended through 2014 if we did a one time tax of $5,435 on each of America’s 4.6 million millionaires, the individual cost would be no more than about 1/2 of one percent if it was levied only on the first million dollars. That’s sounds a bit more fair than 5 million Americans in total despair over losing unemployment benefits in 2014.

  4. David Benson says:

    How do Republicans intend to pay for the government shutdown?

  5. Peggy says:

    How did the Republicans plan to pay for the Iraq/Afghanistan wars?