Last year, thousands of you wrote and called your members of Congress to stop a cruel and selfish piece of legislation from passing. You won that battle, but the bill is back.
H.R. 3630, introduced by Rep. Dave Camp (R-MI), extends federal unemployment insurance for a full year…with many, many strings attached. The bill called for slashing UI benefits by more than half in some of the highest unemployment states, allowed mandatory drug testing, denied benefits to those without a GED or diploma and even forced applicants to pay for their own reemployment services. The National Employment Law Project (NELP) has a full analysis of this disgusting bill.
UI applicants, many of them hardworking Americans who have lost their jobs through no fault of their own, don’t deserve this kind of humiliation. Congress needs to renew unemployment benefits for the full year, as they have always done: no cuts, no tricks, and no barriers to benefits.
We were able to defeat this legislation last December, when House Republicans relented and signed a clean two-month extension of UI and the payroll tax cut. But now that the clock is once again running out, House Republicans are using these ridiculous restrictions on unemployment benefits as bait in a sick political game to extract concessions.
According to the Associated Press, this tactic seems to be working:
Democrats, however, rejected efforts by House conservatives to require beneficiaries to enroll in GED classes or permit states to require drug tests as conditions of getting unemployment.
The Democratic proposal would allow unemployed people to receive a maximum 93 weeks of benefits in states with the highest jobless rates, rather than the 99 weeks permitted now. Republicans want to cut 20 weeks from the maximum benefit, though as a practical matter, falling jobless rates mean the maximum benefit would drop to 59 weeks under their plan.
Translation: Democrats are now negotiating away six weeks’ worth of benefits to try to get stubborn Republicans to drop the drug testing and other draconian measures.
But what happens when Republicans say no to 93 weeks? Do the Democrats counter with even more cuts? Will they just keep cutting until Republicans get the cuts that that they wanted all along?
What makes this even worse is that the average duration of unemployment is higher than it has ever been since the Labor Department started recording in 1948: 39.7 weeks. That’s the average. No other recession in the last fifty years even compares. That House Republicans are doing everything they can to cut unemployment benefits now, in 2012, after extending them every time the measure came up under the previous administration, is cruel, selfish, and nakedly partisan.
More than 3.3 million unemployed workers will be cut off from their vital lifelines by June 2 if the program is not extended. Millions of working families and local businesses will suffer from the lack of revenue at a time where the economy is just starting to recover.
Once again, we need you, and your voices. Tell Congress to extend UI now: no cuts, no tricks, and no barriers to benefits.
Tags: Jobs, Michigan, unemployment benefits extension, unemployment insurance
Kim reported this morning on the tax cuts and unemployment insurance compromise struck by President Obama and Republican leadership. Here’s a round-up of a few more reactions to it, good and bad.
David Leonhardt suggests that “the deal amounts to a second stimulus bill.”
Adam Serwer writes:
The $900 billion deal to extend all of the Bush tax cuts represents a substantial retreat for the president on a major campaign promise, a major victory for the Republican Party, and, let’s face it, complete obliteration of the notion that the deficit matters politically as anything other than a blunt instrument to wield against the welfare state. The deficit is an absolute emergency when it comes to making sure all Americans have health care, but an afterthought when it comes to cutting taxes for the wealthiest Americans.
Paul Krugman:
So, was this worth it? I’d still say no, although it’s better than what I expected over the weekend. It still greatly increases the chances of the Bush tax cuts being made permanent — especially because the front-loading of the stimulative stuff actually worsens Obama’s 2012 electoral prospects.
Overall, enough sweetener has been added to diminish, but not eliminate, the bitterness of the disappointment.
Joan McCarter:
The long-term unemployed are on the verge of dropping off the political radar entirely. This potential agreement would probably seal their hopeless fate. A 13-month extension of the current tiers is likely the last we’ll get for the unemployed out of this government.
Steve Benen:
Who gets what? For Republicans, that’s easy: a two-year extension on all Bush-era tax rates, regardless of income. Making matters slightly worse, the White House also agreed to include a deal on the estate tax, raising the exemption to $5 million per person and a 35% maximum rate, and a two-year extension on a capital gains top rate of 15%.
But then there’s the flip-side. The president secured a 13-month extension of aid for the long-term unemployed, reportedly his top priority. The deal also includes a reduction in the Social Security payroll tax, which will give workers a boost in their paychecks; an expanded earned-income tax credit; the continuation of a college-tuition tax credit; and new opportunities for businesses to write off the cost of some equipment purchases.
Obama was able to secure help for the middle class and the unemployed; Republicans were able to keep breaks for the wealthy. In other words, both sides got to fight for their natural constituencies.
Susie Madrak:
I was talking to one well-known writer-activist last night who said he thought it was odd that the UI extension was being “shrugged off” by so many. I agree. I think a lot of the online bloggery outrage is being fueled by people who don’t have a visceral understanding of what it’s like to be at the end of your financial rope. (Class matters.)
With this president, with these Republicans, at this time, I think this is approximately as good as it can get. There will be changes before the deal is approved (it would be swell, for instance, if Bernie Sanders held out for the 99ers), but this is about what it’ll look like.
And for the people who can breathe, knowing they can survive for another 13 months, that’s a good thing.
Tags: deficit, taxes, unemployment, unemployment insurance
The President reached a deal with GOP leadership Monday evening concerning the Bush-era tax cuts and unemployment benefits. This blog has spoken extensively about the futility of extending tax cuts for the super-rich during the Great Recession, as well as other, more productive places that money might go (think education or clean energy). But those days of dreaming are over because the deal extends Bush-era tax cuts for everyone for the next two years.
The good news is that the deal also supports extending unemployment insurance for the long-term unemployed for another 13 months. If passed, extending these benefits would not come up for debate again until February 2012 when hopefully, with much work and investment, our country will be boasting a much lower unemployment rate.
Also included in the deal is a 2% employee payroll tax cut, a revival of the estate tax cut (with exemptions up to $10 million for couples), and several tax credits aimed at working families were extended. These tax credits include the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit, which were all scheduled to expire this year.
Shaillagh Murray of the Washington Post reported that the President is urging Democrats to support the agreement in Congress, “In brief remarks Monday evening, Obama said he was disappointed that the deal would extend breaks for the wealthiest households, but he warned Democrats not to make good on threats to allow all the cuts to expire, as an expression of the party’s opposition to preserving the top-rate cuts. “Sympathetic as I am to those who would prefer a fight to compromise, it would be the wrong thing to do,” the president said. “The American people didn’t send us here to wage symbolic battles.”
Ezra Klein of the Washington Post agrees, “it’s something of a hopeful sign: The White House sat in a room with Republicans and Democrats and managed to negotiate an actual compromise. The final deal includes some things that Democrats will like and some things they won’t like, and it includes some things Republicans will like and some things they won’t like. But it’s a deal, and a better one than many — myself included — thought they’d reach.”
At least with the holidays just around the corner, the long-term unemployed are not left worrying where there next check is coming from.
Tags: taxes, unemployment, unemployment insurance
The economic costs—costs not just to the people directly affected but to the entire American economy—of not renewing unemployment insurance will be dire. According to the Council of Economic Advisors,
The council’s report, which details how a failure to extend the aid would affect people on a state-by-state level, says nearly seven million Americans could lose coverage by the end of next year and that 600,000 jobs are at stake. Goolsbee contended the gross domestic product would be six-tenths of a percent point lower in December of next year if the benefits are not extended, slowing the nation’s recovery from the worst recession since the Great Depression.
According to an earlier report by the National Employment Law Project, some two million workers nationally could lose benefits in December if they are not extended, an estimate the CEA also uses. The U.S. Joint Economic Committee estimates failure to extend the benefits program “would drain the economy of $80 billion in purchasing power and result in the loss of over one million jobs over the next year.”
600,000 jobs at stake and a dip in the GDP. Never mind the millions of working families who will lose a lifeline just in time for Christmas, in an economy in which there are five jobseekers for every job opening.
But Republicans in Congress are still holding those families, and those jobs, and our economy, hostage to tax cuts for millionaires and their party’s overarching desire to destroy the economy enough to ensure that President Obama won’t be reelected. It’s appalling.
Tags: unemployment, unemployment insurance
Well, unemployment insurance runs out right away for 800,000 people if Congress doesn’t vote to renew it. And Congress doesn’t appear ready to move on that, so that’s an awful lot of people losing the small check that’s keeping them afloat while they look for work.
NELP’s Christine Owens writes:
There’s Robert Pugh, in Santa Barbara, California, who earned his MBA after a long career as a chef and found work as a financial analyst in small business and commercial banking, only to be laid off last June. He will lose his unemployment benefits next month—and, after that, his apartment and health insurance. There’s Robert Horvath of Glenview, Illinois, also laid off in June after a career in banking. Of his $1,500 in monthly benefits, due to expire in December, he needs $1,200 just for health insurance. At 58, he has applied for all kinds of jobs and received no offers. There’s Sharron Tetrault from Mount Vernon, New York, who has worked as an event planner for nonprofits for fourteen years, but since being laid off in January has struggled daily to find work. She’ll be cut off unemployment insurance in the coming weeks if Congress fails to renew the programs, “and it’s only a matter of time before my phone gets shut off,” she says. “How will employers call me?”
These are not irresponsible losers. They are victims of disastrous economic conditions. And the nation will “save” nothing by condemning them to poverty and homelessness. Rather, we will see a downward spiral in which yet more jobs and more tax revenue are lost.
In fact, just as the House torpedoed the federal programs last week, economic experts, including orthodox fiscal conservatives, begged to differ. A new Department of Labor study, commissioned by the Bush administration and co-authored by the chief economic adviser to John McCain’s presidential campaign, found that the federal programs had injected enough into the economy to reduce the unemployment rate by 1.2 points. The Congressional Budget Office has ranked unemployment insurance as the most effective stimulus to the economy, generating $1.90 in economic activity for every $1 the government spends.
Tags: unemployment, unemployment insurance
The devastating impact of Wall Street’s Great Recession was all too evident in the record surge in poverty reported recently by the Census Bureau for 2009.
From Elise Gould and Heidi Shierholz at EPI:
The poverty rate increased from 13.2% to 14.3% between 2008 and 2009, representing an additional 3.7 million people living in poverty for a total of 43.6 million in poverty in 2009. The poverty rate for children was 20.7% in 2009, representing 15.5 million kids living in poverty. In 2009, over one-third (35.5%) of all people living in poverty were children.
The poverty rate for working-age people (18-64 years old) hit 12.9% in 2009, the highest rate in nearly 50 years.
The official poverty threshold is defined as an annual income of $21,954 for a family of four (that’s $422 per week), or $11,161 for an individual. But, as Gould reports, the poor are getting poorer.
While 14.3% of all Americans were living in poverty last year, a record 6.3% were in so-called deep poverty, earning less than half the official poverty threshold, or subsistence rate, according to the new data on poverty released last week by the Census Bureau.
This sizable share of the American population falling below half the poverty line is particularly notable given that even the official poverty threshold – an annual income of $21,954 for a family of four – is widely considered insufficient to pay for life’s most basic essentials like food and housing. To fall below half the poverty line, a family of four would have an annual income of less than about $11,000.
How much worse would the poverty rates have been in 2009 without the expanded state and federal unemployment insurance programs? According to a report by the National Employment Law Project (NELP) (pdf):
The U.S. Census Bureau announced yesterday that during 2009, 3.3 million people, including 1 million children, were kept out of poverty with income support provided through unemployment insurance (UI). (emphasis added)
source: Center on Budget and Policy Priorities (CBPP)
In a related study, CBPP reports that a total of 6 million Americans were kept out of poverty by just seven of the provisions in the 2009 Recovery Act stimulus, including expanded unemployment insurance programs.
This analysis, which comes one day before the Census Bureau will release updated poverty figures (for 2008), examines seven of the recovery act’s provisions — two improvements in unemployment insurance, three tax credits for working families, an increase in food stamps, and a one-time payment for retirees, veterans, and people with disabilities — and finds that they alone are preventing more than 6 million Americans from falling below the poverty line and are reducing the severity of poverty for 33 million more. Those 6 million people include more than 2 million children and over 500,000 seniors.
Those numbers are conservative, says CBPP, and don’t include the impact of other Recovery Act programs such as the Temporary Assistance for Needy Families (TANF) emergency jobs programs, which employ 250,000 otherwise unemployed parents and youth. Those TANF programs are set to expire this week unless Congress acts to extend them.
Without the expanded state and federal unemployment insurance benefits, the number of Americans living in poverty in 2009 would have increased by 7 million — nearly twice the actual increase. And without other key provisions in the Recovery Act, that number would have been nearly 10 million. Yet, all of those programs are under assault, threatened by legislative expiration unless they are extended.
As the report from NELP concludes:
Given the important role of unemployment benefits in keeping working families out of poverty during the recession, it’s crucial that Congress keep the Recovery Act’s remaining measures in place. The current federal extensions are set to expire on November 30, 2010, ending income support for millions unless they are reauthorized. If we allow these programs to expire, millions will be subjected to preventable poverty—hardships that will have immediate and lasting impacts for families and children.
Yesterday’s bleak release, showing a rise in poverty over the course of the past year, is yet another piece of evidence pointing to the need for Congress to take action on expanded unemployment benefits as well as focused measures to create and grow jobs.
Tags: jobless benefits extentsion, Jobs, poverty, unemployment insurance
It appears that I underestimated the brazen contempt that Wall Street has for America’s unemployed millions, and for the millions more working only part-time despite wanting full-time work.
Last month, in a post titled Blaming Unemployment Insurance for Unemployment — prompted by a JPMorgan Chase report that attempted to do just that — I wrote:
This kind of cockamamie pseudo-science would just be laughable if it weren’t a potentially dangerous threat to the survival of millions of unemployed Americans. You can bet that bank lobbyists and their conservative cronies are circulating this report and others like it to gin up opposition to extending unemployment benefits.
Yesterday’s Wall Street Journal editorial, titled Incentives Not to Work, which blames long-term unemployment on extended jobless benefits, amounts to Wall Street’s declaration of war on America’s unemployed.
Conveniently ignoring a logical foundation of rational thought — that correlation does not imply causation — the Journal posits that because there are extended unemployment benefits, there is more long-term unemployment.
… sure enough, the share of unemployed workers who don’t have a job for more than 26 weeks has steadily increased, reaching a record 44.1% in March. The average spell of unemployment is now 31 weeks, even though the economy is once again creating more new jobs than it is losing. Democrats are slowly converting unemployment insurance into a welfare program.
By extension, they might as well say that because of extended unemployment benefits, employers are more reluctant to hire.
The Wall Street Journal’s editors have the incredible gall to blame record long-term unemployment levels on unemployment insurance payments. Not the Great Recession, caused by Wall Street’s financial train wreck. Not the lack of available jobs, caused by Wall Street’s financial train wreck. But on unemployment insurance payments, made necessary by Wall Street’s financial train wreck.
The Journal fails to mention that there are nearly six jobless workers for every one job opening, and that more than half the small number of newly added jobs are temporary — while another chunk are part-time jobs.
After demanding, and getting, its nearly trillion dollar bailout, Wall Street continues to extract billions in excessive payouts and bonuses for profiting at the expense of the rest of the economy and everyone else. With unabashed temerity they object to the meager jobless benefits being paid to those unfortunate enough to have been thrown out of work as a result of Wall Street’s avarice.
And now the Journal’s editors urge Republicans in Congress to stop opposing extended benefits simply when they “add to the deficit” and start opposing them completely.
I wonder how long it will take for some Republicans in Congress to start reading their lines from yesterday’s Wall Street Journal editorial.
Tags: unemployment, unemployment insurance, Wall Street
JPMorgan Chase released what it called an economic research report (pdf) last week that purports to show that extended unemployment insurance payments cause higher unemployment and longer-term unemployment.
Seriously.
the availability of these benefits has almost certainly played a significant role in the record rise in the average duration of unemployment. Consequently, they have also had a role in the stunning rise in the unemployment rate over the last two years.
Noting the current correlation of high unemployment, longer average duration of unemployment and expanded unemployment benefits, the giant, previously bailed-out Wall Street bank asserts:
The magnitude of these effects has been the subject of a vast amount of econometric investigation. The variable most studied is the degree to which unemployment duration increases for a given change in the maximum available duration of jobless benefits. Most estimates of this elasticity have centered on a finding that an increase of one week in the availability of benefits raises the average duration of unemployment by 0.2 week.
Taking an assumed national average of an additional 47 weeks of unemployment insurance payments to jobless workers, the report continues:
Based on the widely accepted 0.2 estimate of the responsiveness of average duration to the length of benefit availability, the 47 extra weeks of benefits could be expected to increase average unemployment spells by 9.4 weeks. Since only about half of the unemployed are eligible to receive unemployment benefits (the other half generally have not met the requirements for sufficient prior employment or lost their jobs through layoffs), the total average unemployment duration would be expected to increase by 4.7 weeks.
Got that? The report goes on, then, to extrapolate that the increased duration of unemployment they assert is caused by extended unemployment insurance is itself the cause of a 30% increase in the unemployment rate:
—this would imply a 30% increase in the unemployment rate. Starting from an unemployment rate before the recession of roughly 5%, this means that increased benefits can account for 1.5%-pt of the subsequent increase in the unemployment rate.
Never mind that mass joblessness and record rates of long-term unemployment both preceded the extension of additional jobless benefits.
This kind of cockamamie pseudo-science would just be laughable if it weren’t a potentially dangerous threat to the survival of millions of unemployed Americans. You can bet that bank lobbyists and their conservative cronies are circulating this report and others like it to gin up opposition to extending unemployment benefits.
And this from JPMorgan Chase, the firm that helped bring down Lehman Brothers, helped precipitate the Great Recession resulting in millions of Americans losing their jobs, and whose CEO Jamie Dimon meanwhile took home a $17.6 million compensation package last year.
Reading this JPMorgan Chase report reminded me of a wonderful little book that my 7th grade math teacher distributed to the class. By a terrific writer Darrell Huff, it’s titled How to Lie with Statistics and was first published by Norton in 1954.
Still available in print, the book introduced me to the notion that correlation does not imply causation — meaning that just because two things occur together it doesn’t imply that one causes the other.
But, alas, that appears to be beyond the grasp of the genius economic minds at JPMorgan Chase.
Tags: unemployment, unemployment insurance
An eventful week it should be, to say the least.
I’m reminded of these famous lines by the great Walter Huston in the film The Treasure of the Sierra Madre:
“Hey, you fellas, how ’bout some beans?… Want some beans?… Goin’ through some mighty rough country tomorrow – ya better have some beans.”
A quick look at just some of what’s coming up.
Senate Banking Committee chairman Chris Dodd (D-CT) will unveil his plan for financial regulatory reform today, following months of delays in pursuit of Republican support that never materialized (again). Key issues include whether the plan will sufficiently tighten regulations on derivatives trading, really make “too-big-to-fail” banks a thing of the past, and whether the regulatory prohibition on commercial banks’ acting as investment banks or hedge funds (the so-called “Volcker Rule”) will be re-instituted.
But the biggest question is what will become of the Obama administration’s proposed Consumer Financial Protection Agency (CFPA), will it emerge as an independent agency or be contained within the Federal Reserve in a weaker, more advisory role. The latter is something many of the Federal Reserve’s current and former consumer protection advisers actually oppose.
Meanwhile, at long last the final stages of passing a significant health care reform plan appear to be approaching this week in Congress. It will have to overcome the massive insurance industry-led lobbying effort trying to stop it. A variety of votes in both the House and the Senate will be needed to pass health care reform with the crucial improvements to the Senate bill agreed to by the White House and Democratic Congressional leaders. But one thing is clear, and that is that the big student loan reform plan (SAFRA) will be included in the House and Senate reconciliation fix for health care and will need only 50 votes in the Senate. Now that would be a Win-Win.
On the all-important jobs front, the initially-bipartisan-then-not bill to provide employers with tax credits for hiring returns to the Senate for final action, where some are talking about pulling an all-nighter. A much larger bill to continue the extensions of current unemployment insurance and COBRA subsidies through the end of 2010 passed the Senate last week but because it differs from an earlier version passed by the House, the measure still awaits further action. And that can’t come too soon for the 11 million Americans now receiving unemployment benefits, as the current jobless aid extensions are still set to expire March 31.
With the introduction last week of the Local Jobs for America Act, a large-scale plan to support up to a million jobs, efforts begin this week to build on early support, enlist more House co-sponsors, and seek support from Senate Democrats. This bill will be one key component of the growing national movement for jobs, spearheaded this week by the AFL-CIO’s campaign for Good Jobs – Make Wall Street Pay in coordination with Working America’s “Wall Street: I Am Not Your ATM” campaign.
So let’s get rolling! And hey, what about those beans?
Tags: financial reform, Health Care, Jobs, unemployment insurance
Having callously blocked Senate action on an emergency 30-day extension of expanded jobless benefit programs for an entire week, Republican obstructionist Senator Jim Bunning late yesterday dropped his objection to proceed on the bill in the face of a wave of opposition and fissures in his own party.
Democrats had vowed to keep the Senate in session overnight if necessary to end Bunning’s obstruction. Senate Republican leaders, who had voiced support for Bunning earlier, finally convinced the retiring Kentucky Senator to allow a vote to proceed. An amendment Bunning offered was defeated 53-43 and the 30-day emergency unemployment benefits and COBRA subsidy extension finally passed 78-19. All of the 19 Senators voting against the bill were Republicans.
The 30-day emergency extension had passed the House by voice vote last week. After the Senate’s long-delayed action last night, President Obama signed the bill into law.
The expanded unemployment benefits, COBRA subsidy and other relief programs initiated in last year’s Recovery Act, extended twice in short-term measures after earlier Republican delays, had run out on Sunday February 28. Hundreds of thousands of jobless workers had begun to lose their unemployment insurance. The 30-day extension reinstates those benefits retroactively.
Blocking the extension measure had provoked a virtual rhubarb in the Senate, and sparked a well-deserved storm of protest against Bunning and Senate Republicans who displayed their utter disregard for the struggles of America’s nearly 15 million unemployed. The outrage prompted even the usually staid Bob Schieffer, host of CBS’ “Face the Nation”, to call Bunning’s obstruction “unconscionable.”
So Where Are We Now?
All of the Recovery Act’s expanded unemployment insurance (UI) programs and COBRA health insurance subsidies for eligible jobless workers have been extended through the end of March. Those programs, with their various Tiers of extra weeks and extended benefits in specific states, are explained in detail by George Wentworth of the National Employment Law Project in our prior post Unemployment Insurance – Ask an Expert. I highly recommend reviewing that invaluable post.
Jobless workers who are receiving unemployment insurance payments now will be able to continue to receive benefits at their current period of eligibility and have those benefits extended to the next Tier or Extended Benefits period depending on their state’s programs (again, please refer the ‘Ask an Expert‘ post).
For now, however, no additional Tier or added weeks of benefits beyond these programs is included in either the 30-day extension or the full-year plan now being considered in the Senate.
What’s Next?
It took an entire week, tying up virtually all other Senate business, to get a temporary one-month benefits extension passed. That fact alone is reason enough for the Senate to move rapidly on the full-year extension of these and other programs supported by the Obama administration.
The Senate today returns to take up the larger year-long extension bill. More than 11 million Americans are depending on unemployment benefits, and more than 6 million jobless workers have been out of work for six months or more. One-month and two-month benefit program extensions, continuously delayed and obstructed as they’ve been, are just not sufficient.
Enough! Tell Congress to pass the full-year extension of unemployment insurance and COBRA now.
Tags: Jim Bunning, jobless benefits extentsion, unemployment insurance
