This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/commentisfree/2013/dec/10/congress-should-extend-unemployment-insurnace

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Congress should stop the Scrooge routine and extend jobless benefits Congress should stop the Scrooge routine and extend jobless benefits
(about 1 hour later)
Out of all the tasks the "do nothing" Congress should to address before it goes on holiday hiatus, the most important – even more so than finally passing a budget – is to extend federal unemployment insurance.Out of all the tasks the "do nothing" Congress should to address before it goes on holiday hiatus, the most important – even more so than finally passing a budget – is to extend federal unemployment insurance.
This is one of the best social safety nets America has for working people. Notice I said "working people". In order to even qualify to receive unemployment aid when you lose your job, you have to have been employed for at least a year. You also have to be laid off for a legitimate reason, not because you just goofed off or decided to quit. Contrary to popular belief, the money the unemployed receive isn't great – $300 a week on average – but it helps keep them afloat as they look for new jobs (and yes, many states now require proof that the unemployed are revising their resumes and sending them out).This is one of the best social safety nets America has for working people. Notice I said "working people". In order to even qualify to receive unemployment aid when you lose your job, you have to have been employed for at least a year. You also have to be laid off for a legitimate reason, not because you just goofed off or decided to quit. Contrary to popular belief, the money the unemployed receive isn't great – $300 a week on average – but it helps keep them afloat as they look for new jobs (and yes, many states now require proof that the unemployed are revising their resumes and sending them out).
I can already hear the barking, especially from the Republican side of the aisle, about any extending any "welfare" type program. GOP Senator Rand Paul went as far as to say it would be a "disservice" to the unemployed. Here's the thing: beyond the moral imperative of helping out or neighbors in times of need (keep in mind that there are still 4.1 million Americans who have been looking for work for over six months), there's a genuine economic case for extending unemployment insurance. I can already hear the barking, especially from the Republican side of the aisle, about any extending any "welfare" type program. GOP Senator Rand Paul went as far as to say it would be a "disservice" to the unemployed. Here's the thing: beyond the moral imperative of helping out our neighbors in times of need (keep in mind that there are still 4.1 million Americans who have been looking for work for over six months), there's a genuine economic case for extending unemployment insurance.
It's (arguably) the cheapest and most effective form of economic stimulus. Think about it: people who recently lost their jobs use unemployment funds to pay for their rent and food. They spend the money they get from the government right away. The Congressional Budget Office cited unemployment benefits as one of the most effective policies of the 2009 Recovery Act. Compare that to what happens when, say, there's an income tax cut. Not everyone spends that tax cut. Some save it, so the money isn't going out as quickly into the economy.It's (arguably) the cheapest and most effective form of economic stimulus. Think about it: people who recently lost their jobs use unemployment funds to pay for their rent and food. They spend the money they get from the government right away. The Congressional Budget Office cited unemployment benefits as one of the most effective policies of the 2009 Recovery Act. Compare that to what happens when, say, there's an income tax cut. Not everyone spends that tax cut. Some save it, so the money isn't going out as quickly into the economy.
Speaking of the economy, there lots of uncertainty heading into 2014. The last thing the US economy – and by extension the world economy – needs in January is for over a million people to lose their federal funds overnight. Close to a million more are expected to be laid off in early 2014 and won't have access to federal aid, either, a further drag on the "green shoots of recovery" economists keep talking about.Speaking of the economy, there lots of uncertainty heading into 2014. The last thing the US economy – and by extension the world economy – needs in January is for over a million people to lose their federal funds overnight. Close to a million more are expected to be laid off in early 2014 and won't have access to federal aid, either, a further drag on the "green shoots of recovery" economists keep talking about.
This is especially true as the Federal Reserve attempts to figure out how to stop all the aid it's been pumping into the economy (aka the quantitative easing program). Markets are already jittery about when that is coming and whether it will be in early in the new year. We don't need to add another shock.This is especially true as the Federal Reserve attempts to figure out how to stop all the aid it's been pumping into the economy (aka the quantitative easing program). Markets are already jittery about when that is coming and whether it will be in early in the new year. We don't need to add another shock.
No one wants to keep these programs running forever. Each state offers some funds to the unemployed, but the federal government steps in during and after bad recessions in order to help the long-term unemployed. The question is when should that extra federal money end?No one wants to keep these programs running forever. Each state offers some funds to the unemployed, but the federal government steps in during and after bad recessions in order to help the long-term unemployed. The question is when should that extra federal money end?
Anyone paying attention to the economic indicators can see that things are still too rocky to withdrawal federal aid completely. The chart below from the Center on Budget and Policy Priorities makes the best case for why Congress should pass an extension by Christmas. The graph shows when the federal government halted unemployment insurance during prior recessions. In the downturn after 9/11, the federal government stopped providing extra jobless relief when the long-term unemployment rate was 1.3%. It was similar in the 1990-91 and 1981-82 recessions – the federal government said "that's enough" aid for the jobless when the long-term unemployment rate was at 1.2 or 1.3%. At the moment, US long-term unemployment is still at 2.6%. That's a heck of a lot higher than in the past.Anyone paying attention to the economic indicators can see that things are still too rocky to withdrawal federal aid completely. The chart below from the Center on Budget and Policy Priorities makes the best case for why Congress should pass an extension by Christmas. The graph shows when the federal government halted unemployment insurance during prior recessions. In the downturn after 9/11, the federal government stopped providing extra jobless relief when the long-term unemployment rate was 1.3%. It was similar in the 1990-91 and 1981-82 recessions – the federal government said "that's enough" aid for the jobless when the long-term unemployment rate was at 1.2 or 1.3%. At the moment, US long-term unemployment is still at 2.6%. That's a heck of a lot higher than in the past.
While there is a fear that people receiving unemployment insurance will be less motiatived to look for jobs, the reality is the economy is in much worse shape this time around. There aren't many jobs to be had, especially in January after the big holiday retail boom is over. Extending federal jobless aid for all of 2014 would cost about $25bn. That's a lot of money to you and me, but it's a bargin in federal government terms.While there is a fear that people receiving unemployment insurance will be less motiatived to look for jobs, the reality is the economy is in much worse shape this time around. There aren't many jobs to be had, especially in January after the big holiday retail boom is over. Extending federal jobless aid for all of 2014 would cost about $25bn. That's a lot of money to you and me, but it's a bargin in federal government terms.
As Congress debates a budget deal, extending unemployment insurance is a natural link with that. It will help working families, stimulate the economy and signal that Congress "gets it" and wants 2014 to start as smoothly as possible.As Congress debates a budget deal, extending unemployment insurance is a natural link with that. It will help working families, stimulate the economy and signal that Congress "gets it" and wants 2014 to start as smoothly as possible.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.Our editors' picks for the day's top news and commentary delivered to your inbox each morning.