Jan. 6 (Bloomberg) -- A Senate vote tomorrow to advance legislation extending emergency unemployment benefits is part of a broader agenda Democrats are rolling out in a bid to bolster their fortunes in the November midterm elections.
The party heads into the new year with a program focusing on income inequality, including efforts to raise the minimum wage and boost federal spending on infrastructure projects to create jobs. Those issues will take precedence over President Barack Obama’s flawed health-care rollout and the looming battles over the budget deficit. The president used his weekly address to call for an extension of unemployment benefits.
“Our politics are changing” from deficits and Obamacare to jobs and the economy, New York Senator Charles Schumer, the No. 3 Democrat, said in a conference call with reporters on Jan. 5. “These types of issues will now supersede them as incomes decline and unemployment persists.”
Senate Majority Leader Harry Reid, a Nevada Democrat, postponed the vote, which had been scheduled for today, after Republican Senator John Cornyn of Texas complained that a number of senators were absent. Some airlines delayed or canceled flights today because of bad weather.
Following a two-year budget deal reached late last year that defuses the partisan fiscal battles that have dominated Congress, both parties are focusing their campaign messaging on the U.S. economy’s struggles and how to help workers. Senator Jack Reed, a Rhode Island Democrat, and Republican Dean Heller of Nevada have sponsored a bill to extend, for three months, emergency benefits that expired Dec. 28 for the 1.3 million Americans classified as long-term unemployed.
“If Republicans block this renewal, I think it will have an effect and hurt their chances in the 2014 elections,” Schumer said. “In the past, this has been a bipartisan issue that’s had the support of mainstream Republicans” such as former President George W. Bush, said Schumer.
Bush presided over the establishment of emergency extended benefits in 2008, when the national jobless rate was 5.6 percent, compared with 7 percent now.
House Speaker John Boehner has said he’s willing to negotiate as long as Democrats pay for the bill, which currently contains no funding provisions. It has yet to be determined whether Democrats have the votes to prevent Republicans from blocking the legislation, which is intended to help jobless people after they exhausted state benefits, typically lasting six months.
Obama will press Congress tomorrow to act during an event highlighting the effect on individuals and the consequences for the economy if benefits aren’t restored. Should Congress fail to act, “we’ll feel a drag on our economic growth this year,” he said in his Jan. 4 radio address.
Democrats may stand a better chance of winning the unemployment insurance debate than they do a minimum wage increase, which Republicans say could hamper the ability of young Americans in particular to secure employment in a down economy. Iowa Senator Tom Harkin, a Democrat, is sponsoring a bill to raise it to $10.10 an hour from $7.25, a level put in place in 2009.
Arizona Representative Matt Salmon, a Republican, said the bill would hurt people 18 to 28 years old who suffer the highest levels of unemployment. “History has shown us that when the minimum wage rises, those companies that are paying minimum-wage jobs end up laying people off and they end up hiring less people,” he said on CBS’s “Face the Nation” program.
According to a Dec. 12-15 ABC News/Washington Post poll, 66 percent of Americans say the minimum wage should be raised to help low-income workers get by. That compares with 31 percent of those who oppose an increase, which they say could lead some businesses to cut jobs.
Republicans will instead take aim at federal regulations they say hamper job growth and the president’s health-care law.
Yesterday, Reid pressed Republicans to support the largely Democratic-driven effort to help the jobless by arguing that the issue transcends political parties.
“We have long-term unemployment,” Reid said on CBS’s “Face the Nation” program. “That’s why the American people support this, Democrats, independents and Republicans.”
In addition to focusing on the need to help job seekers and their families, Democrats are saying the extension will bolster the economy because the jobless will pour the money into purchases of goods and services. “They spend the money; they don’t put it in the bank,” said Reid.
The extended unemployment program started in 2008 and at one point provided as many as 99 weeks of benefits. At the end of 2013 the maximum was 73 weeks, including 26 weeks of state-funded benefits. It has been renewed 11 times since Bush put it place at the beginning of the financial crisis that deepened the last recession. All extended benefits come from federal dollars, while initial benefits come from federal, state and employer funds.
Republican leaders, including Boehner, want the cost of the program offset with cuts elsewhere in the budget. Kentucky Senator Rand Paul, a possible Republican presidential contender in 2016, has said the benefits serve as a disincentive for people to look for work. The legislation “needs to be paid for,” he said yesterday.
“I’m not opposed to unemployment insurance, I’m opposed to having it without paying for it,” Paul said on ABC’s “This Week.”
Democrats are stepping up their efforts to demonstrate the economic benefit of extending benefits for the jobless. In a Jan. 3 conference call, former Labor Secretary Robert Reich, a Democrat, said that just in Ohio, $12.2 million was drained from the economy in one week after 39,100 people lost benefits. Harvard Economist Larry Katz put the total cost to the U.S. economy at about $400 million a week.
Democrats say they’ve already offered Republicans the spending cuts they demand in exchange for their votes. Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, offered an amendment before Congress left for the holidays to pay for the plan with cuts to agriculture subsidies.
“There is no secret back pocket” way to offset the cost of extending benefits, Representative Steny Hoyer of Maryland said during the Jan. 3 conference call.
Democrats predict that the economic and human toll of Congress’s failure to pass the legislation will ultimately sway Republicans to act. Obama, in his Jan. 4 radio address, said continuing the benefits will help mothers afford to feed their children while looking for work, and assist fathers seeking work to learn a new skill.
“Denying families that security is just plain cruel,” Obama said.
To contact the reporter on this story: Heidi Przybyla in Washington at email@example.com