Though the short-term budget deal making its way though Congress doesn’t include an extension of long-term unemployment benefits, Republicans are leaving the door open to extending federal jobless aid to Americans who have been receiving benefits for more than six months. Members of the GOP argue that any additional spending must be paid for, the National Journal’s Fawn Johnson reports, noting that the party’s willingness to at least engage in the topic “signals that unemployment benefits could become a domestic policy rarity—a safety-net issue that isn’t automatically mired in a political shouting match.”
But don’t applaud Republicans just yet: the party went home for Christmas without tackling the issue and is threatening to hold the benefits hostage to additional spending cuts in January. To make matters worse, many Republicans have previously supported and even voted for unemployment benefits without offsets, “including twice during George W. Bush’s administration.” In 2010 the party “twice allowed temporary unemployment measures to pass without asking for a roll call vote.” Congress has reauthorized the program 11 times since it was first enacted in 2008.
Republican lawmakers have tended to agree. Sen. Orrin Hatch (R-UT) — who has also signaled his willingness to back extension this year — argued in 2011 that providing the long-term unemployed with benefits would create “some incentives to find jobs, to get to work” and most importantly “help people.” New Jersey Gov. Chris Christie (R) explained that the benefits would “continue a safety net” and “positively impact our economy by extending the purchasing power of unemployed New Jerseyans.” He signed legislation accepting the federal funds.
“This is an important bill that has real-life consequences for the people of this country, and our failure to act has created genuine hardship in their lives,” Sen. Susan Collins (R-ME) said in explaining her support for an extension of benefits in 2010.
The conservative case for providing help to people out of work for more than 26 weeks — when most state-based unemployment programs expire — is simple: the benefits keep the unemployed attached to the workforce, since qualified recipients must be actively searching for jobs, and provide a critical safety net in a slow economic recovery. A 2011 study from Congress’ Joint Economic Committee (JEC) even found that “beneficiaries of federal UI benefits have spent more time searching for work than those who were ineligible for UI benefits” and that “time spent looking for a job has tripled among the long‐term unemployed who are out of work” since Congress enacted the program.
“The labor market is still in bad shape, the economy is still weak, there are three times as many unemployed workers as job openings,” American Enterprise Institute’s Michael Strain wrote. “In the two recessions prior to the Great Recession emergency federal UI expired when the long-term unemployment rate — the share of workers who have been unemployed for 27 weeks or longer — was 1.3 percent. The long-term unemployment rate is currently at twice that level,” he adds.
The Congressional Budget Office has estimated that extending federal benefits for another year would cost less than $20 billion in 2014 and increase economic output, adding approximately 200,000 jobs by the end of next year. The program also partially offsets its own costs by helping to generate tax revenue through increased economic activity and keeps families from relying on other government programs, such as food stamps or Temporary Assistance to Needy Families (TANF, formerly known as welfare).
But since Congress failed to act before the end of the year, 1.3 million Americans will lose the checks that they currently rely on. After that, another 850,000 workers will run out of state unemployment benefits by March, leaving 2.15 million without income support during the holiday season.