‘Vital First Steps’: Extending Unemployment Benefits

Today, Bloomberg reported that Congress may be taking up a stimulus bill in a lame-duck session following today’s election, and that “lawmakers are facing growing calls for a measure that would dwarf the $168 billion economic stimulus package signed into law in February.”

The size of the stimulus bill is the subject of serious debate, with economists saying anywhere from $300 billion to $500 billion may be necessary “to prevent a deepening recession.” Goldman Sachs economists said that the measure should equal $500 billion “in order to offset a big slowdown in consumer and business spending.”

The Wonk Room has been arguing that the stimulus should be aimed at infrastructure projects, which — as Paul Krugman noted — “the country badly needs in any case.” However, there is another key facet that the stimulus bill should address: unemployment benefits. The U.S. unemployment rate was 6.1 percent in September. As former Secretary of Labor Robert Reich noted:

More than 1 in every 5 people out of work have been looking for six months or more. And many are running out of unemployment benefits. The National Employment Law Project estimates nearly 800,000 will run out this month. And another 350,000 in November and December. That means they won’t be able to pay their bills, including their mortgages. Already this year, almost half of mortgage delinquencies have been caused by homeowners’ lacking of income or employment.

This idea has already garnered opposition from conservatives in Congress. As CNN Money reported today, House conservatives are against extending unemployment benefits:

Mike Steel, an aide to House Minority Leader John Boehner, R-Ohio, said the Republicans would prefer to pass a stimulus bill that didn’t include extensions in unemployment benefits, food stamps and infrastructure projects, arguing they take too long to effectively boost the economy.

Boehner and other conservatives are incorrect if they believe extending unemployment benefits will not quickly boost spending. As the Center for American Progress has noted, “the immediate macroeconomic benefit of putting more money in the pockets of unemployed Americans looking for work is reason enough to extend benefits. This is stimulus money that will swiftly and assuredly flow back into the economy.”


As CAP’s Michael Ettlinger wrote, “moves to help the unemployed and those who are being hit hardest by the deteriorating situation should be included” in a stimulus package, as they are the “vital first steps to getting our economy stabilized and providing stimulus to stop the bleeding.”