Loss Of Unemployment Benefits Has Now Cost Almost $5 Billion As Congress Dithers

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"Loss Of Unemployment Benefits Has Now Cost Almost $5 Billion As Congress Dithers"

Three-year-old Jaynell Bender waits as her unemployed parents use computers search for jobs

Three-year-old Jaynell Bender waits as her unemployed parents use computers search for jobs

CREDIT: AP

The Senate took a small step toward passing a short-term restoration of lapsed unemployment benefits on Thursday night as six Republicans crossed the aisle to help Democrats break a filibuster of the package. The narrow procedural vote underscores how slowly Congress has responded to this self-inflicted economic wound, as states have now lost out on almost $5 billion in economic activity since the federal safety net for the long-term jobless evaporated in December.

Thursday’s vote was the third time that Republicans have attempted to filibuster the measure. With that blockade broken, the bill is expected to pass the upper chamber on Monday. House Speaker John Boehner (R-OH) seems poised to kill the package, which he calls “unworkable.” Yet the bill does as little as possible from the perspective of those who rely upon federal assistance as their job hunts stretch out longer beyond the six months of coverage that state unemployment insurance offers.

In mid March, with 10 weeks’ worth of jobless aid checks already missing for more than 2 million job seekers, senators announced a compromise to reinstate the federal Emergency Unemployment Compensation (EUC) program for just five months. The deal was retroactive to December 28, when the program expired. While retroactive payments could be priceless for beneficiaries, the short-term nature of the deal means that the program will lapse all over again at the end of May. Given that the compromise has taken more than two weeks to clear filibuster hurdles, and that the House appears ready to slow it down even further, it seems as though legislators will end up resolving this self-made problem for just a few weeks before the extension itself ends.

There are nearly 2.3 million people who would be receiving EUC checks if the program hadn’t lapsed. That number grows by 72,000 each week as people max out their state-level benefits and turn to the feds for further help. In addition to the millions of direct recipients, there are at least 2.3 million children who depend upon parents who rely on EUC. The failure to restore the program therefore harms over 4.5 million people’s wellbeing directly, and many more indirectly through reduced economic activity due to EUC recipients having less money to spend.

Those economic losses total $4.7 billion nationwide, according to a report this week from the Democrats on the House Ways and Means Committee. The EUC program has one of the better economic multiplier effects of any federal program, generating over $1.50 in economic activity for every dollar the government spends.

Depriving these people of their safety net does nothing to improve their job prospects. For one thing, there are about 2.5 people job hunting for every job opening available. That makes for stiff competition for even those who are just a few weeks out of work, let alone those who have been unemployed for far longer. Hiring managers typically view long stints of joblessness as disqualifying, and the longer a person is out of a job the harder it is to get an interview for a new position. Those problems don’t go away just because Congress shrinks a job-seeker’s food and rent budget, and making it harder for those people to keep their phone and internet bills current only makes it harder to hunt for jobs.

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