Will Congress Let Deficit Hysteria Undermine Support For Laid Off Workers?

When the Senate comes back from its Memorial Day recess next Monday, one of the most pressing issues that it needs to address is the current expiration of extended unemployment benefits and other social safety net programs for laid off workers. On Friday, the House passed an extension (which did not create a new tier of benefits for workers who have completely exhausted theirs), but the Senate departed before even considering the bill.

Already, the House’s legislation is pared back from an earlier version, as it only extends jobless benefits through November (instead of through the end of the year) and doesn’t include an extension of COBRA subsidies, which help laid off workers purchase health insurance. These cuts were made to assuage the deficit hysteria shown by many members of Congress who, despite long-term unemployment remaining at an all-time high, are ready to cut and run from various recovery programs. And even with the House’s extension, such hysteria continues unabated.

“There is a sense that the economy is recovering and this is not a new entitlement,” Rep. Earl Pomeroy (D-ND) said. Rep. Baron Hill (D-IN) voted against the extension, saying “last year, I held my nose. But the economy is starting to get on its feet again.” Rep. Gerald Connolly (D-VA) also voted no, and said that the slim margins of the vote means “moving forward, what worked a year ago is not going to work now.”

It’s incredibly worrisome how many policy makers are ready to begin fiscal tightening, leaving those still out of work out to dry. As Paul Krugman put it, “demands that governments switch from supporting their economies to punishing them have been proliferating in op-eds, speeches and reports from international organizations. Indeed, the idea that what depressed economies really need is even more suffering seems to be the new conventional wisdom”:

Last week conservative members of the House, invoking the new deficit fears, scaled back a bill extending aid to the long-term unemployed — and the Senate left town without acting on even the inadequate measures that remained. As a result, many American families are about to lose unemployment benefits, health insurance, or both — and as these families are forced to slash spending, they will endanger the jobs of many more. And that’s just the beginning. More and more, conventional wisdom says that the responsible thing is to make the unemployed suffer. And while the benefits from inflicting pain are an illusion, the pain itself will be all too real.

According to the Center for American Progress’ Christian Weller, the average length of unemployment is currently 31.2 weeks, “and 44.1 percent of the unemployed were out of a job for 27 weeks or more.” “This is a new record for long-term unemployment,” he wrote. And even though the economy added jobs in April, the unemployment rate in minority communities is still astronomical, hitting 16.5 percent for African-Americans and 12.6 percent for Hispanics.


As Mark Zandi, chief economist of Moody’s, said “in this environment, the job market is so bad, I think it’s still premature to give up on those emergency benefits.” “I mean, just a statistic, for every one job opening there’s five people that are looking for work. That is incredibly unusual, so therefore it’s premature to give up on those emergency benefits,” he added. But Congress seems ready to start giving in, potentially leaving millions with no safety net on which to fall back upon.