Today, Senate Democrats expect to hold yet another vote on their tax extenders package — which extends unemployment benefits and various tax credits — and by all accounts they will not be able to drum up enough votes to invoke cloture. During this process, the bill has been whittled from $200 billion to $100 billion, and gone from being deficit-funded to almost entirely paid for (with the exception of the unemployment insurance). “I’ve never been involved in anything that’s been revised so often and in so many different ways,” said Sen. Max Baucus (D-MT).
And still, Republicans — along with Sen. Ben Nelson (D-NE) — are going to filibuster it. Minority Leader Mitch McConnell (R-KY) “dismissed” the latest proposal, calling it the “deficit extenders bill.”
This refusal to move legislation that would help the unemployed and boost the economy comes just after the Federal Reserve warned in its latest statement that the economy is still exceedingly weak:
Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Bank lending has continued to contract in recent months.
The extenders package includes aid to state governments to help pay for Medicaid that, if not passed, could result in 200,000 jobs lost alone, as states cut their budgets to make up the difference. Vital health and service programs will also be on the chopping block should Congress not act to help the states.
In addition, on Friday 1.2 million people will have lost their unemployment benefits, resulting in a drop in demand in the economy and untold amounts of misery for families who were expecting their benefits to continue, only to see their safety net pulled out from under them. For every dollar spent on unemployment compensation, $1.60 is added to our economy’s output.
There are currently 15 millions Americans unemployed, and almost half of them have been out of work for at least six months (and maybe much longer), which is a post-World War II record. There are nearly five workers actively searching for work for every job available, compared to 1.5 per job opening before the recession began.
And yet, deficit hysteria and obstruction (after all, a majority of Senators support the extenders bill) are preventing meaningful attempts to address these problems from going through. Which isn’t to let the Fed off the hook entirely either. As David Leonhardt pointed out yesterday, the Fed acknowledges that it could be doing more to boost employment — it just simply isn’t going to do it.