The Senate and House are both moving to extend costly unemployment insurance
benefits included in the $787 billion economic stimulus package amid fears
about a jobless recovery and growing fiscal deficits.
The nation’s unemployment rate stands at 9.4 percent and actually dipped
one-tenth of a point in July, but is widely expected to increase in coming
months. Unemployment hasn’t been this high in a quarter-century, and a
record number of workers have been unemployed for an extended period of more
than 27 weeks.
{mosads}Rhode Island Sen. Jack Reed (D), whose state has a 12.4 percent
unemployment rate that trails only Michigan, introduced legislation Friday
to extend enhanced unemployment benefits through the end of 2010. The
benefits were first included in the stimulus bill and are set to expire at
the end of the year.
The stimulus extended the time unemployed workers are eligible for benefits
and offered a $25-per-week increase in payments. Reed’s bill would
provide an additional 13 weeks of coverage for job-seekers in states with
unemployment rates of 8.5 percent or higher.
Similar legislation had already been introduced in the House.
While a cost estimate for Reed’s legislation is not yet available, the
Congressional Budget Office (CBO) pegged unemployment insurance programs in the
stimulus as costing about $39 billion over 10 years, with the bulk of
spending coming in the first two years. Provisions currently in place
increase the deficit at a rate of almost $850 million a week during 2009.
Reed’s legislation could be expected to meet or exceed these costs, as more
unemployed workers take advantage of extended coverage for greater lengths
of time.
Though there are some signs the recession is ending, unemployment is widely
expected to continue to rise. It took more than a year for the jobless rate
to go down after recessions in the 1990s and earlier this decade, as
business is generally slow to pick up workers amid a recovery. The economy
also must create 127,000 jobs per month just to keep up with the growing
need for work.
While members of both parties across the country will face pressure to
extend unemployment benefits given the number of people out of work, there
could be resistance because of the price tag, particularly from Republicans
who believe Democrats and President Barack Obama could be wounded by fears
about government spending and rising deficits.
CBO last week estimated the federal deficit stands at $1.3 trillion, an
all-time high.
A spokeswoman for Sen. John Ensign (R-Nev.) said the Finance Committee
member hasn’t made a decision on the bill. While Ensign supports providing
benefits to unemployed workers, she said he’s also worried about the cost.
Finance would have jurisdiction over the bill.
“While he is still reviewing the bill, Sen. Ensign supports making sure
unemployed Americans continue to receive their benefits in these tough
economic times,” spokeswoman Rebecca Fisher said in an e-mail.
She also suggested other funds from the stimulus could be used to further
extend the unemployment benefits.
“However, we also have a duty to future generations to spend responsibly and
he believes we should pay for future [unemployment insurance] extensions
with the stimulus, which we have only spent 25 percent of,” Fisher said.
The escalating battle over healthcare reform, which hinges in part on fears
about the legislation’s budget implications, could complicate
efforts to move the unemployment bill.
Sen. Susan Collins (Maine), one of only three Senate Republicans to
vote for the stimulus, thinks unemployment benefits should be extended until
there’s a real recovery in the economy.
“Sen. Collins believes that we need to extend unemployment benefits until
the economy is recovering,” Kevin Kelley, her communications director, said
in an e-mail.
“She believes that [it] is unfortunate that Democratic leaders in both the
House and Senate did not do so before August recess, but she believes they
should act as soon as session resumes.”
Rep. Jim McDermott (D-Wash.) introduced similar legislation in the House in
late July. GOP Reps. Steven LaTourette (Ohio) and Candice Miller (Mich.)
joined 21 House Democrats as co-sponsors. The unemployment rate in Ohio tops
11 percent.