Don’t Play Politics With Unemployment Benefits
President Barack Obama and Republican legislators are signaling that they might after all make a deal to extend federal support for the long-term unemployed. An extension makes such good sense that there shouldn’t be much to discuss, but never mind. If a deal is done, it would be petty to complain about the delay.
The case is straightforward. The recovery has so far been too weak to provide work for a lot of willing and qualified people. No doubt, to some small degree, removing benefits might lower the unemployment rate by forcing some to take jobs they otherwise wouldn’t consider, but the main problem remains one of demand: There aren’t enough jobs, and the long-term unemployed have a much harder time getting a foot in the door. The case for relieving the resulting hardship is, or ought to be, irresistible.
Of late, Congress has actually made the unemployment problem worse. Economists, including Federal Reserve Chairman Ben S. Bernanke, agree that with interest rates extremely low, short-term fiscal stimulus would be the best way to get people back to work before unemployment erodes their skills and does permanent damage to the economy. Instead, legislators have focused on short-term spending cuts that do nothing to address the U.S. government’s long-term fiscal challenge.
Even with fiscal policy set on the wrong course, the government could have done more to help the long-term unemployed -- for example, by simplifying and coordinating dozens of existing retraining programs.
The result: Some 4.1 million Americans have been out of work for more than 6 months -- a level not seen in any other recession on record. Of these, some 1.3 million will lose their modest emergency benefits unless Congress and the White House reach agreement.
Republicans say they’d be willing to extend the benefits for three months if Democrats find spending cuts to offset the cost. They’re wrong to impose that condition -- not least because extending the benefits will in large part pay for itself by boosting jobs and output. The Congressional Budget Office has estimated that a one-year extension would add about 200,000 jobs at a cost of about $25 billion in fiscal 2014 and 2015.
Both sides, in fact, should separate this issue from their ongoing political war. Extending unemployment benefits merely recognizes the terrible burden that the recession has placed on blameless victims. It has nothing to do with enlarging or shrinking the role of the state; nothing to do with accepting or resisting income inequality. It has about as much to do with ideology as deciding whether to help a heart-attack victim in the street.
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