Former White House Budget Director Peter Orszag said Sunday it's "unfortunate" that the budget deal doesn't extend unemployment benefits. Appearing on CNN's "State of the Union," Orszag said that when the economy is weak and needs additional demand, "unemployment benefits are one of the most effective ways of getting money into the economy quickly." However, former Congressional Budget Office Director Doug Holtz-Eakin disagreed. "This is a big deal for those on the program; this isn't that big a deal for the economy," he said. "The CBO put it at about 300,000 jobs. That should be about a month's worth of jobs; it's probably two months right now."
Next week, federal emergency unemployment benefits will expire for 1.3 million struggling Americans, and we already know the deadline will go unmet. House members have gone home, and while Senate Majority Leader Harry Reid (D-Nev.) has vowed action in January, Democrats haven't been able to hatch plans to overcome Republican opposition to an extension.
In general, when Democrats defend the policy, they emphasize the economic argument: jobless aid is an exceptionally effective stimulus that creates jobs because the unemployed don't just stick the assistance in a mutual fund -- they spend it.
Yesterday, however, we saw evidence that Republicans accept the reality of the Democratic observations, but they just don't seem to care.
Orszag, appearing slightly exasperated, responded, "Look, 300,000 jobs is not nothing. I'd take it."
This reminds me of a classic scene in "Annie Hall." Annie's psychiatrist asks the couple, "Do you have sex often?" Alvy responds, "Hardly ever, maybe three times a week." Separately, Annie replies, "Constantly! I'd say three times a week."
The point of the scene, of course, is that Alvy and Annie see the same reality, but perceive it in very different ways. The same is true in the fight over unemployment benefits -- Democrats say, "It's important to the economy to extend jobless aid; it'll create 300,000 American jobs," and when Republicans look at the exact same data, they argue, "It's not worth extending jobless aid; it'll only create 300,000 American jobs."
For Holtz-Eakin, the economic impact leads to little more than indifference. His job isn't one of the 300,000 on the line, so it doesn't much matter to him either way. Sure, extended benefits spur economic activity, create jobs, and help the unemployed keep their heads above water as they search for work, but it's "only" 300,000 jobs, so who cares?
Remember, Douglas Holtz-Eakin isn't just some random talking head. He's a highly influential Republican economist who has advised a variety of GOP candidates, including having served as the chief economic policy adviser to the McCain/Palin campaign.
When he callously dismisses the importance of a common-sense policy that creates 300,000 jobs, Holtz-Eakin is reflecting the views of many in his party.