Extra Jobless Aid Not a Winner in Republican Districts

Photographer: Victor J. Blue/Bloomberg

People wait in line at a job fair in New York on Jan. 16, 2014. Close

People wait in line at a job fair in New York on Jan. 16, 2014.

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Photographer: Victor J. Blue/Bloomberg

People wait in line at a job fair in New York on Jan. 16, 2014.

As the U.S. Senate battles over expanded unemployment insurance, House Republicans aren’t even talking about it.

The reason: Local officials and their constituents oppose the continued cash assistance regardless of what good it might do for their communities. Mayor Jeff Tibbals, who represents Tennessee’s Scott County where the jobless rate is 15.6 percent, is one of them.

“I think about that quite often, about whether it’s a good thing” to curb transfusions to a local economy reeling from coal-industry declines and the loss of a flooring mill, Tibbals said in an interview. “Some people just use it as a way of life.”

Democrats including Representative Sander Levin of Michigan say they think high poverty rates in Republican-held districts will soften opposition to restoring the jobless aid that expired Dec. 28 for more than 1.3 million Americans.

To underscore the need for an extension, Levin and seven other Democrats each plan to bring an unemployed person from their districts to the House chamber tomorrow night to hear President Barack Obama’s annual State of the Union address.

Trying Again

The Senate on Jan. 14 didn’t have the votes to advance an extension of the expanded benefits for three months. Senate Majority Leader Harry Reid of Nevada has pledged to try again, perhaps as soon as this week.

Interviews with mayors and members of Congress from Tennessee’s most hardscrabble areas raise doubts about Levin’s expectations. Local Republican leaders and voters, even in areas with high unemployment, don’t endorse a short-term fix, easing pressure on House members to extend benefits.

If anything, lawmakers are being lobbied against doing so. It isn’t that Republican officials don’t see suffering; they’re skeptical that restoring the benefits will help the jobless in their communities in the long run.

“We’re playing a very dangerous game of turning unemployment insurance into another entitlement program,” said Republican Representative Stephen Fincher, whose Tennessee district includes Lauderdale County, with a 12.5 percent jobless rate. “The answer is giving the private sector back the keys.”

Family Lifeline

Tibbals says he recognizes that families in Tennessee’s rural northeastern hills are using the weekly payments as a lifeline while seeking jobs. Still, he says it’s a bad idea to continue the additional benefits.

Unemployment rates exceeding 8 percent in Republican-dominated states including Tennessee, Mississippi and Kentucky rival those of northern Democratic strongholds like Rhode Island and Illinois. Sentiments similar to those of Tibbals are found there, as lawmakers from these states say the solution isn’t renewing unemployment benefits.

Representative Chuck Fleischmann, whose district includes Tennessee’s Scott County, takes the same view.

“The pressure that I’m getting from home is to basically repeal and defund Obamacare, to stop the burdensome regulations on coal and manufacturers across the board,” Fleischmann said. “There is a legitimate cry for help coming from my constituents to try to get the great American engine going again.”

Jobs Slide

In Hancock County, a central Appalachian community of 6,800 reached by mountain pass, the number of manufacturing jobs dropped to 25 today from 500 a decade ago, said Representative Phil Roe, a Republican who represents the area.

“You’d have to go there to understand how desperate these folks are,” he said. The answer is measures that create jobs, not continuing the federal payments, said Roe, who also faults Obama’s environmental policies for high poverty rates.

Some economists say communities with high unemployment could see a short-term stimulative boost from the payments while lawmakers work out broader fixes. Officials are overlooking the benefits while they haggle over whether and how to cover the costs of the aid, said Bill Fox, an economist who frequently briefs Tennessee’s lawmakers and business leaders.

“This is a group of people who will go out and spend every dime of it,” said Fox, director of the Center for Business and Economic Research at the University of Tennessee, Knoxville. “Even if Congress chose to increase the deficit to expand it, in the short run, it’s good for the economy.”

Expanded Benefits

The expanded benefits program started in 2008, when the U.S. unemployment rate was 5.6 percent, and at one point provided as many as 99 weeks of benefits for the long-term jobless. At the end of 2013 the maximum was 73 weeks, including 26 weeks of state-funded benefits

The emergency benefits have been renewed 11 times since President George W. Bush put them in place. They’re covered by federal dollars, while initial jobless insurance comes from federal, state and employer funds.

In the week following Dec. 28, when the emergency aid expired, 19,500 people in Tennessee lost a total $4.6 million in jobless benefits, according to an analysis by Democrats on the House Ways and Means Committee.

Businesses seem unconcerned about the potential blow to their profits, said Fox, recalling a recent dinner he attended with a group of business leaders in Tennessee.

“They were very interested in how I perceived the economics of it,” he said. “Nobody said ‘man, that’s a real problem we need to deal with.’”

The unemployed have no similar lobby. Lois Maxfield, 67, a cook for 15 years at a school that closed in Clay County, with a 10 percent jobless rate, recently lost her weekly aid.

Maxfield, who said she voted for Republican Mitt Romney for president in 2012 and was collecting unemployment for the first time, said it’s “terrible” that Congress allowed the benefits to end.

“Ever since I can remember there’s been unemployment for people who lost their job,” she said.

To contact the reporter on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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