Once a replacement for the late Sen. Robert C. Byrd, D-W.Va., is seated in the coming weeks, giving Democratic the majority they need, the Senate will likely break a deadlock and extend unemployment benefits to millions of Americans. But that's about the only good news for the more than 14.6 million unemployed Americans.
The government's jobs report released Friday showed that employers cut 125,000 jobs in June. The private sector added 83,000 jobs, not nearly enough to turn a still high unemployment rate of 9.5 percent around. Congress won't get back in action until July 12, when they return from a recess to face strong objections from Republicans and some Democrats over deficit concerns.
Congress has extended unemployment benefits three times since the recession began in December 2007. Through the extensions, unemployed workers can get benefits for up to 99 weeks. (Most states' basic benefits run for 26 weeks.) The last extension expired at the beginning of June, and about 1.7 million people have since had benefits cut off. That could jump to 3 million by the end of July. Senate Republicans have blocked three Democratic attempts to extend the benefits for another six months.
Republicans have objected because they say the bill's $34 billion cost is not offset by spending cuts elsewhere. “The only reason the unemployment extension hasn’t passed is because our friends on the other side simply refuse to pass a bill that does not add to the debt,” Minority Leader Mitch McConnell, R-Ky., said June 30 on the Senate floor. “That’s it.”
Republicans are increasingly confident that this is a strong argument going into the midterm elections. When Sen. Jim Bunning, R-Ky., temporarily blocked the extension in February, few in his party supported him. Now, a new Gallup poll shows that Americans rank the deficit as their top concern alongside terrorism.
But many economists, including the head of the nonpartisan Congressional Budget Office, say that short-term stimulus and long-term debt planning aren't mutually exclusive. Some argue that less government spending now would slow the recovery, and thus the growth of the tax base and ability to fully tackle the deficit.
"Failure to [extend benefits] will further weaken the economy and delay the point at which serious fiscal consideration measures can safely be instituted," said Robert Greenstein, head of the left-leaning Center on Budget and Policy Priorities. "We should reject approaches to debt stabilization that take us away from our goal of sustained, broadly shared prosperity," added Richard Trumka, president of the AFL-CIO, which represents 11.5 million workers.
But conservatives say that this line of thinking is backwards. "Every dollar that government injects into the economy has to be first taxed or borrowed out of the economy," said Brian Riedl, a research fellow at the Heritage Foundation.
And some economists say it's not fair to portray the unemployed as helpless. Those laid off today would still qualify for the initial 26 weeks of benefits and perhaps more, after all. They argue that nearly two years of weekly benefit checks actually keep people from aggressively pursuing new jobs. One study said generous benefits lengthened a person's period of unemployment by 30 percent.
Many jobless are certainly eligible for these longer benefits. The average unemployed person has been jobless for 35 weeks, according to the new jobs report. It said that 6.8 million people have been out of a job for six months or more—about 45 percent of the unemployed population of 14.6 million. Their average weekly check is about $300.
In addition to these benefits, Congress has been struggling to pass an extension of a health care subsidy for the unemployed, war and disaster relief money, and funding for state Medicaid and education programs. President Obama asked Congress for about $50 billion in domestic stimulus spending, but even Democrats see that as unrealistic given their current struggles.
