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More than One Million Americans Lose Unemployment Insurance

December 28th 2013

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Roughly 1.3 million people lost their extended unemployment benefits on Saturday as Congress allowed the program to expire.

Democrats — angry that an extension wasn't included in the recently-enacted budget agreement — have vowed to make the benefits the first item on their 2014 agenda.

Republicans contend that lawmakers would better serve their constituents by directing their efforts to other job-boosting areas, especially given that a year-long unemployment extension comes with a $26 billion price tag. They also are waiting on Democrats to put forward a specific plan.

Underlying the debate is a steadily improving economy, which has seen the jobless rate fall to a five-year low of 7 percent in November. The Federal Reserve gave its own vote of confidence to the recovery when it agreed to pull back from its years’ worth of stimulus action in December, citing the steady gains.

But, at the same time, the Fed and others continue to express concern about the plight of the long-term unemployed, whose skills and connections deteriorate the longer they are out of the workforce. Roughly 37 percent of the nation’s jobless have been out of work for over roughly six months, according to the Labor Department.

Democrats are gearing up to open 2014 with a major push to reinstate that emergency economic lifeline.
Senate Majority Leader Harry Reid (D-Nev.) has said a three-month extension, backed by President Obama, would be the first item he brings up for business in 2014. That limited extension would add roughly $6 billion to the deficit if not offset.

The White House on Friday pushed for Congress to pass that three-month extension upon its return in early January, and Obama placed calls to two senators sponsoring the bill.

According to White House, Obama called Sen. Jack Reed (D-R.I.) and Sen. Dean Heller (R-Nev.) to offer his support for their proposal to extend benefits for three months. The president said he was pleased that they were working in a bipartisan fashion to address a problem that will directly affect 1.3 million Americans during the holidays and have a negative impact on the nation's economic growth and job creation.

"Never before have we abruptly cut off emergency unemployment insurance when we faced this level of long-term unemployment," Director of the National Economic Council Gene Sperling said in a statement.

"While we remain disappointed that Congress did not heed the President's call to extend emergency unemployment benefits for next year before the holidays, the President as well as the Democratic Congressional leadership have made clear the importance of extending the benefits immediately upon Congress's return."

Meanwhile, House Minority Leader Nancy Pelosi (D-Calif.) ratcheted up pressure on Republicans wary of another extension. In a statement issued Friday, she called the pending expiration “immoral,” and blamed GOP lawmakers for allowing it to happen.

“Starting tomorrow, too many American families will face the New Year with uncertainty, insecurity, and instability as a result of congressional Republicans’ refusal to extend critical unemployment insurance,” she said. “The first item on Congress’ agenda in the New Year must be an extension of unemployment insurance.  That must be our priority on day one.”

House Democrats cried foul when the two-year budget deal was unveiled without an extension included, but many ultimately supported the package. Senate Democrats and the White House also backed the budget, vowing to address the unemployment issue soon but separately.

Democrats have buttressed their arguments with polling that shows steady public support for another extension and that Republicans could pay at the polls for opposing it. A poll from left-leaning Public Policy Polling (PPP) released earlier this week found that in four key swing districts, as well as the home district of Speaker John Boehner (R-Ohio), voters support an extension by 63 to 38 percent.

Democrats are also working to play up the impact back home on local media, highlighting how many people in their hometowns could be losing assistance.

“When the American people get involved and speak out, we are going to win this fight, and I believe that that is what’s going to happen,” said Sen. Bernie Sanders (I-Vt.), a liberal who caucuses with Democrats, on MSNBC this week.

Some Republicans, including Sen. Rand Paul (R-Ky.), have said they would oppose another extension. They argue that policymakers should be focused on creating more jobs rather than providing more assistance, especially as the economy continues to recover.

And other GOP lawmakers have remained noncommittal on the idea of an extension, but are clearly concerned about the cost. Boehner and other Republicans have not said explicitly that they would oppose renewing the benefits, but, at the same time, they want to see the costs offset by spending cuts elsewhere.

Democrats rebut that demand by arguing the extension of benefits is actually an economic boon. Pelosi and others point to analysis that shows an extension would allow the unemployed to continue pumping money into the economy, driving economic growth and job creation.

Given those economic perks, Pelosi and other Democrats contend that blocking an extension over cost concerns misses the mark.

“Every dollar invested in this initiative yields $1.52 in economic growth, and an extension of UI could produce as many as 300,000 jobs,” she said on Friday.

Peter Schroeder writes for TheHill.com from where this article is adapted.

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