Congress Cuts Unemployment Benefits
Just in time for the holiday season, Congress left a little gift on the porch of all unemployed Americans by failing to extend unemployment benefits this week. A motion by Senator Jack Reed, D-R.I., to pass an extension fell short by one vote. Around 800,000 Americans can expect to be cut off by the end of next week and another 1.2 million by the end of the month.
Republicans argued that extending the benefits for a year would cost about $56 billion and creates a population of lazy Americans who rely on welfare from the government instead of looking for work. However, as mean and cynical as that argument is, it’s also not economically sound. Economist Mark Zandi says every dollar spent on jobless aid yields a $1.60 benefit to the economy and if benefits are not restored holiday sales growth will be shaved by nearly a percentage point and fourth quarter economic growth will be cut by 0.3 percentage points. As a result, we could be looking at a million more jobs lost.
The only hope now for an extension is for Democrats to demand that such action be included in the upcoming debate and passage of extending the expiring Bush tax cuts. Before yesterday, Congress went 40 years without allowing extended unemployment benefits to expire when the unemployment rate was above 7.2 percent. The unemployment rate today stands at 9.6 percent. Senator Scott Brown, R-MA, had the ability to let the extension move forward but decided to vote along party lines in protest to what he called ”unwarranted diversions” from the Democrats. “We spent seven days on food safety,” Brown yelled. “I have complete and total sympathy and understanding” and “more than anybody here, I want to help.”
Just in time for the holiday season, political posturing and games have cut much needed aid to the neediest of Americans at the most inopportune time. The unemployed of this country must now wait with bated breath to see what’s next to be delivered on their porch this holiday season, assuming they’re still living in the same house.