Unemployment Insurance Is the Real “Cliff”

We’re in the midst of yet another day of play-acting and finger-pointing on the potential Jan. 1 austerity crisis. And once again, the language many people—especially House Speaker John Boehner—are using seems designed to mask what’s really going on.

In a press conference today, the Speaker expressed his “disappointment” that Congress isn’t any closer to a deal, and insisted that he needs spending-cut proposals to come from President Obama before he’s willing to make any concessions on revenue. But there’s nothing to negotiate over! If there’s no deal, than everyone’s taxes go up, a lot of spending gets cut, and the deficit gets dramatically reduced. Boehner can no more demand concessions in exchange for higher taxes on the very wealthy than he can demand concessions in exchange for allowing the sun to rise in the east. The only question is which portions of the tax and spending changes will come into effect, and which won’t. Demanding an austerity package as the price for avoiding austerity measures is the height of silliness.

In reality, the most urgent problem is that we still have unemployment that’s higher than it should be—and part of the austerity that kicks in Jan. 1 is the end of extended unemployment insurance. That would be a devastating blow to long-term unemployed people, their families and their communities. As Rep. Sandy Levin notes:

You have here a human cliff…On Day 1, 2 million-plus people would lose it entirely.
Extending federal unemployment insurance is vital for millions of Americans laid off through no fault of their own and it serves as an important economic stimulus…we should make sure that the families who need federal assistance in the meantime continue to receive this important lifeline.

This is real money that matters to real people. It helps them stay in their homes, eat, keep their kids healthy and support local businesses. In fact, a study by the Congressional Budget Office says that renewing extended unemployment insurance would create 300,000 jobs.

The bigger question at issue here is that politicians like Boehner—and many of the reporters and pundits who are covering this situation—are focused almost entirely on questions of deficit and debt and blind to the idea that protecting jobs is a higher priority. As David Dayen notes, the obsessive reporting and jockeying over “deals” on taxes or social safety net spending obscures the reality.

In reality, getting people back to work, getting demand up enough to keep the economy growing, is the long-term, sustainable way to reduce deficits. That’s not happening if we replace one set of austerity measures with another.

Like I said before: this is no time for a “grand bargain.” No matter what Speaker Boehner says, this is time to prevent austerity and protect middle-class and working-class families, including the millions still struggling in a slow job market.