Obama warns of ‘unemployment cliff’ consequences

Updated
In just 19 days, federal emergency unemployment benefits will expire for 1.3 million struggling Americans, and in the hopes of raising the issue’s visibility, President Obama devoted his weekly address to the subject over the weekend.
 
“For many families, [temporary unemployment insurance] can be the difference between hardship and catastrophe…. Last year alone, it lifted 2.5 million people out of poverty, and cushioned the blow for many more,” he explained. “But here’s the thing: if Members of Congress don’t act before they leave on their vacations, 1.3 million Americans will lose this lifeline…. If Congress refuses to act, it won’t just hurt families already struggling – it will actually harm our economy. Unemployment insurance is one of the most effective ways there is to boost our economy.”
 
The rhetoric certainly sounded compelling and had the added benefit of being accurate. But the decision isn’t up to Obama; it falls to Congress to approve an extension before the Dec. 28 deadline. And on Fox News yesterday, Sen. Rand Paul (R-Ky.) helped encapsulate why progress appears highly unlikely.
“I do support 26 weeks of unemployment that they’re paid for, if you extend it beyond that you do a disservice to these workers,” Paul said.
 
Paul said that business surveys indicate a reluctance to hire workers who have been on unemployment insurance for lengthy periods.
Got that? Paul believes cutting off aid to jobless Americans during a period of high unemployment is doing those folks and their families a favor.
 
Keep in mind, as Reid Wilson reported the other day, unemployment insurance programs “have already seen big cutbacks,” with reduced benefits under the indefensible sequestration policy, and a narrower eligibility window. Now Congress is prepared to make conditions even worse for those who are already struggling most – working under the assumption that telling the unemployed to get by with even fewer resources will miraculously help them.
 
Indeed, it’s not just Rand Paul. The more congressional Democrats push to include a benefits extension in the ongoing budget talks, the more GOP lawmakers say they’re not interested.
 
Don’t forget, this isn’t a dispute about how best to pay for a goal both sides agree on or a look at partisan difficulties in reaching a compromise. This is more fundamental – Democrats believe the nation would be better off if aid is extended to these jobless Americans, while Republicans believe the nation would be better off if these struggling folks are cut off. It’s that simple.
 
As for why congressional Republicans hold such a view, Paul Krugman did a nice job summarizing the larger context.
Here’s the world as many Republicans see it: Unemployment insurance, which generally pays eligible workers between 40 and 50 percent of their previous pay, reduces the incentive to search for a new job. As a result, the story goes, workers stay unemployed longer. In particular, it’s claimed that the Emergency Unemployment Compensation program, which lets workers collect benefits beyond the usual limit of 26 weeks, explains why there are four million long-term unemployed workers in America today, up from just one million in 2007.
 
Correspondingly, the G.O.P. answer to the problem of long-term unemployment is to increase the pain of the long-term unemployed: Cut off their benefits, and they’ll go out and find jobs. How, exactly, will they find jobs when there are three times as many job-seekers as job vacancies? Details, details.
The evidence is overwhelming that unemployment benefits spur economic activity and help create jobs, while helping the unemployed keep their heads above water as they search for work. Congressional Republicans, at least most of them, reject this, and since they hold enough power to shape the outcome, it’s tough to be optimistic.
 
For GOP lawmakers, the best way forward is fewer jobless benefits, less access to food stamps, a lower minimum wage, and a weaker safety net. It’s almost as if low-income families did something to offend Republicans, and now the party is seeking revenge.
 
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Obama warns of 'unemployment cliff' consequences

Updated