"Out In The Cold?"
Extend Emergency Unemployment Insurance
Before leaving for the holidays in December, Congress turned its back on the long-term unemployed by refusing to extend emergency unemployment insurance (UI) benefits for over a million Americans. Unemployment compensation is an insurance program people pay into for their entire working lives and cutting people off in their time of need with little notice is not only cruel, but also unfair.
The Senate took the first, temporary step to right that wrong today, when the 60 Senators necessary voted to start debating a three-month restoration of UI benefits. (6 of the 60 in support of taking up the bill were Republicans, while 37 senators, all Republicans, voted against even allowing the Senate to discuss this vital measure.)
Unfortunately, Speaker John Boehner and even some of the Senate Republicans who voted to start debating the bill are insisting that any plan to extend UI benefits be offset with spending cuts. Historically, including multiple times under President George W. Bush, these emergency benefits have been considered emergency spending and not offset with spending cuts. As Senate Majority Leader Harry Reid (D-NV) said today, it’s a “new religion” for Republicans to insist on spending cuts to pay for emergency benefits.
Extending unemployment benefits, to be clear, didn’t used to be controversial to Republicans. In fact, Republicans supported the program because a person must continue looking for work in order to receive emergency compensation. Now, of course, it is a different story. They offer a rationale for their position that simply doesn’t make sense.
To be clear, there should be no need to pay for an extension of UI, but instead of more painful austerity spending cuts, we’ve identified just a few of the many wasteful and unproductive corporate tax giveaways that could easily be abolished to achieve the necessary savings:
- Eliminate tax giveaways for corporate jets. Savings: $2.702 billion over 10 years.
- Stop allowing corporations to write-off payments for their own wrongdoing. Savings: $372 million over 10 years.
- End the golf course giveaway. Savings: $619 million over 10 years.
- End the billion-dollar booze boondoggle. Savings: $1.093 billion over 10 years.
- Abolish tax breaks for corporations that ship jobs overseas. Savings: $172 million over 10 years.
- Make sure oil companies pay to clean up their own messes. Savings: $1.058 billion over 10 years.
Total savings: $6.016 billion over 10 years, almost exactly the cost of extending unemployed Americans a lifeline for the next three months.
While today’s Senate action was a positive sign, the bill still faces a very difficult path ahead in the Senate, to say nothing of the House. Here are a few numbers to know on the impact of failing to extend UI benefits:
- 1,300,000: Number of unemployed Americans that lost their benefits starting in January.This number stands to climb up to 4.9 million individuals by the end of 2014 if Congress fails to extend UI benefits.
- $400 million: Amount that state economies lost in one week. The negative impacts of cutting UI benefits spiral out beyond the job seekers who rely on unemployment and also hurt the businesses for which this income is an important source of revenue.
- 240,000: Estimated number of job losses due to reduced consumer demand. The ripple effect of millions of people losing an important income source would continue outward to thousands of job losses as well.
- 600,000: Children who were kept out of poverty in 2012 because of UI. Unemployment insurance doesn’t just help job seekers, it also supports their children. A failure to extend UI benefits in 2014 would undoubtedly hurt these children for no reason at all.
- $1.55: Amount each dollar of unemployment insurance generates in new economic activity in the first year. That is according to the chief economist of Moody’s Analytics, Mark Zandi.
BOTTOM LINE: It is unconscionable that Republicans chose to leave 1.3 million Americans struggling to find work out in the cold before leaving for the holidays. Today’s Senate vote was a step in the right direction, and we can’t afford to wait any longer—if Republicans really insist on offsetting the cost, there are plenty of outrageous tax loopholes that could be used instead of more damaging cuts other important programs. Now is not the time to deal another blow to our economy and struggling families.