Neon Tommy - Annenberg digital news

Jobless Benefits Package Unlikely To Be Passed

Laura Cueva |
November 16, 2010 | 12:48 p.m. PST

Staff Reporter

Workers protest against cutting jobless benefits. (Creative Commons)
Workers protest against cutting jobless benefits. (Creative Commons)
Worries about excessive government spending and a lame-duck Congress currently awaiting the Republican majority are likely to mean an end to jobless benefits for over 2 million unemployed workers once the program begins to lapse in two weeks.

Democrats are fighting for a compromise in order to renew the program before Christmas. The Party is backed by economists, who say cutting off benefits could negatively impact the economy by reducing consumer spending.

The program was last extended during the summer, but benefits lapsed for over a month as Congress came to a decision. The program provides aid for laid-off employees for up to 99 weeks after their termination.

Republicans worry that the program will add to the deficit, but the party is split in their opposition. Many agree that for now, any extension would have to be funded.

Democrats are weighing their options and are willing to reduce some of the aid if a compromise can be reached. Compromises currently on the table include extending the program for a year, but reducing the number of weeks in which aid is provided.

A Senior Republican in the House of Representatives said he would back the extension of jobless benefits if the Bush-era tax cuts, which provide cuts for some of the wealthiest groups, are also extended.

“What we're going to do is sit down and talk with Mrs. Pelosi,” Representative Pete Sessions, a Republican Congressman, told Reuters. “I see nothing wrong with her winning as long as the American people do.”

President Obama has asked congressional leaders to meet with him on Thursday in order to discuss tax cuts, but new legislation is not expected to be voted on until after Thanksgiving at the earliest.

Approximately 800,000 laid-off employees will be affected by the lapse in benefits, which will begin on Nov. 30. By December, that number is expected to increase to at least 2 million, as the nation struggles with unemployment rates as high as 10 percent.

Reach reporter Laura Cueva here. Follow her on Twitter @lecccueva.



 

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Comments

hsr0601 (not verified) on November 21, 2010 11:15 AM

1. The rebs have chanted : Are you listening to American people ?
 
The majority of Americans support the idea of extending unemployment benefits to the jobless, according to a poll out from Hart Research Associates.
Nearly three-quarters of the 802 registered voters surveyed agreed that it was "too early to start cutting back benefits for workers who lost their jobs."
 
2. Are the reps listening to America people ?
 
According to CNN polling, voters said that unemployment is roughly twice as important as all other top issues combined.
Despite the fact that unemployment remains above nine percent, the incoming House majority has made it clear that jobs and unemployment are not at the top of their to-do list.
 
3. Are the reps listening to the outcry from their conscience ?
 
(a). The reps shipped decent-paying manufacturing jobs overseas to lower production costs and eliminated the need to comply with those pesky environmental laws.
 
(b). The recession caused by the reps wiped out as many as 8.2 million jobs, but they don't care !
 
(c). Throwing people out into the streets in the cold this holiday season, the heartless, cold-blooded death panels are having a good night's sleep.
 
(d). Never before has Congress decided to cut-off extended unemployment benefits when the jobless rate was so high. And not since the 1930s have so many unemployed job-seekers been out-of-work for so long.
 
(e). The 154 members who voted against the extension may find their principles are very costly indeed—far more than the $12.5 billion their yea votes would have cost.
 
4. Are the reps listening to the various reports ?
 
(a). Ending federal extensions would drain the economy of $80 billion of purchasing power, according to a report by the U.S. Congress Joint Economic Committee. Every dollar spent on benefits increases the gross domestic product by $1.60, the report said.
 
“Workers receiving unemployment insurance payments are typically cash-strapped and will spend their benefits quickly,” the report said. They spend about $6.5 billion a month on the local economy to buy essentials such as food, clothing and utilities.
 
“A failure to extend the unemployment insurance program could hamper the fragile recovery,” the report said. It predicts that consumer spending will fall by $50 billion over the next year if benefits are not extended, and that economic growth will be reduced by 0.4 percentage points by February 2011.
 
(b). Bloomberg News reported that some economists estimate not passing an extension might result in the economy growing 0.4 percent less between December and February, a significant bite when GDP growth has been hovering in the anemic 2 percent rage
 
(c). The CBO reports that the BEST WAY to spur growth is to increase aid to the unemployed. Other efficient ways to grow the economy is by investing in infrastructure and providing more aid to the states.
The CBO also says that without extensions in 2009, the poverty rate might be 15.4 percent, more than a full point higher than it is.
 
(d). A similar report from the California Budget Project said that unemployment benefits put $225 million into the nation’s economy every day in 2010.
 
Some economists worry that if jobless workers keep receiving extensions, they will stop looking for work. But the dearth of jobs in the labor market makes that point moot, the California Budget Project said.
 
“Cutting off federally supported unemployment insurance benefits would make unemployed workers more desperate to find work, but it would not make them more likely to find work, because jobs are scarce,” the report said.
 
At a time when there are five unemployed workers for every available job, it seems inconceivable that these unemployment benefits would be allowed to expire.
 
5. Are the reps listening to the denouncement over their duplicity, two standards ?
 
(a). The Bush tax cut for the greedy without providing a way to pay for its costs will add an additional $700 billion to the deficit over a decade,
 
(b). Republicans have trumpeted the need to extend huge tax breaks to the wealthy and to repeal the Affordable Care Act. Both actions would significantly increase our nation's debt and lead us down the road to bankruptcy, another major concern for voters.
 
(c). On the one hand they want to provide $700 billion in tax cuts for the wealthiest, but not pay for them. On the other hand they demand that unemployment benefits for the middle class be paid for. It’s kind of like someone on a diet ordering a Diet Coke and a Big Mac simultaneously.
 
(d). Back when Bush was pushing his tax cut packages through Congress in 2001 and 2003, supporters said the cuts (which weren't balanced with spending reductions) would initiate an era in which the American economy would grow so robustly the nation would be running a surplus of more than $5 trillion at the scheduled expiration date. U.S. now runs a deficit of about $1.3 trillion
In sharp contrast, Former President Bill Clinton left a record surplus, despite the warning of potential economic disaster over tax increase for the wealthiest.
 
(e). Since the you-fix-the-deficit puzzle went online, there have been more than one million page views, and more than 11,000 posted Twitter messages about the puzzle, most including their own solution.
The most popular option among all respondents? Reducing the military to less than its size before the Iraq war — included in about 80 percent of the solutions posted to Twitter.

Your rating: None
Elizabeth Sandoval (not verified) on November 17, 2010 2:17 AM

While these benefits are great for those who really need them, the government has failed to reach the root of the problem which are jobs. They should be focusing on one of the biggest reasons for job loss which is a result of companies taking jobs to other countries where they can exploit cheaper labor... That is where most of the jobs are going.

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