Jobless benefits battle holds millions of Americans hostage

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A group of mostly Republican lawmakers in the nation’s capital refuses to pass a bill that would reauthorize an extension of $33 billion in unemployment benefits. And in blocking the legislation during desperate times, they are holding 2.5 million Americans hostage, all for a political stunt. Those 2.5 million people are the chronically unemployed whose benefit checks ran out in May, and they’re hurting. And so are their families. Either these politicians in Congress do not understand the depths of people’s pain, or they simply don’t care.

As they seem to willfully ignore the plight of the unemployed, conservative Republicans would have us believe they are opposed to the extension of benefits because it will only add to the deficit and the national debt. Meanwhile, they have convinced themselves that the $1.6 trillion in tax cuts enacted under President Bush will magically pay for themselves. In the end, they would rather extend these tax cuts—which provide absolutely no help to the economy— rather than provide assistance to the unemployed, a measure which has been proven to stimulate economic growth.

To his credit, President Obama called them out for their filibustering. “A majority of Senators have tried not once, not twice, but three times to extend emergency relief on a temporary basis,” said Obama, surrounded by representatives from the ranks of the unemployed at the Rose Garden. “Each time a partisan minority in the Senate has used parliamentary maneuvers to block a vote denying millions of people who are out of work much needed relief. These leaders in the Senate who are advancing a misguided notion that emergency relief somehow discourages people from finding a job should talk to these folks. That attitude, I think, reflects a lack of faith in the American people.”

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Apparently, the Senate Republicans—along with Democratic Senator Ben Nelson of Nebraska, who apparently is so out of touch with common folk that he has never used an ATM machine — would rather slash spending and watch the unemployed suffer. They believe the unemployed are lazy, and would rather collect unemployment than go to work. As if to blame the victim and mete out the appropriate punishment, Senator Orrin Hatch even proposed drug testing the unemployed. Senate Minority Whip John Kyl said that unemployment insurance is a “necessary evil,” but that while unemployment benefits must be paid for by tax cuts or spending increases, tax cuts for the rich should never be paid for by tax increases, even if it adds to the deficit. “My view, and I think most of the people in my party don’t believe that you should ever have to offset a tax cut,” he said. “That clearly reduced savings is a better way to offset increased spending than a tax increase is.”

“That’s been the majority Republican view for some time,” said Minority Leader Mitch McConnell on Kyl’s remarks. “That there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.” McConnell also dismissed calls by former Federal Reserve Chairman Alan Greenspan to allow the Bush tax cuts to expire.

But the truth contradicts the GOP’s arguments, revealing a fundamental flaw in their reasoning. Despite their insistence that the so-called “reckless” spending policies of President Obama and the current Congress are to blame for the $1.4 trillion deficit, a report by the Center on Budget and Policy Priorities found that the culprit is almost entirely the Bush legacy: costly tax cuts, the wars in Iraq and Afghanistan, and the economic downturn. In fact, the wars and the tax cuts accounted for more than $500 billion of the deficit in 2009, and nearly $7 trillion in deficits through 2019.

And those Bush-era tax cuts have been part and parcel of a massive redistribution of wealth from the have-nots to the have-mores: In 2007, the top 1 percent of Americans owns 34.6 percent of America’s wealth, and the top 20 percent owns 85 percent. Fully half of the Bush tax cuts went to the top 5 percent of U.S. households, while the bottom 60 percent of households received a mere 15 percent of the table scraps. The promised investments by rich taxpayers never happened, and savings plunged to zero. “Instead of the promised trickle-down, we got stagnant wages for middle class Americans while the wealthy became fabulously wealthy,” according to the group United for a Fair Economy. “We now have the greatest economic disparity in wealth since just before the Great Depression.”

African-Americans have been hit particularly hard by the Bush policies of economic redistribution. The wealth gap between blacks and whites has increased fourfold from $20,000 in 1987 to $95,000 in 2007. According to a Brandeis University study, this dramatic shift was due in large part to bad public policy decisions, “such as tax cuts on investment income and inheritances which benefit the wealthiest, and redistribute wealth and opportunities.”

Meanwhile, unemployment benefits are an effective means of economic stimulus. The Congressional Budget Office reported that measures to increase consumption such as reducing payroll taxes or increasing aid to the jobless “would have the largest effects on output and employment per dollar of budgetary cost in 2010 and 2011.” Ralph Martire of the Center for Tax and Budget Accountability said that unemployment benefits are five times more stimulative than the Bush tax cuts. And Mark Zandi, the chief economist at Moody’s Analytics, said that extending unemployment insurance benefits would generate $1.61 for every dollar spent Insurance-041410.pdf. On the other hand, making the Bush tax cuts permanent would yield only 32 cents on the dollar.

Extending benefits to the jobless is the right thing to do, and makes good economics. Moreover, the public supports it. A recent poll by the National Employment Law Project found that 74 percent of voters prioritize helping the unemployed over reducing the deficit. Another poll found that 62 percent of people think Congress should extend unemployment benefits, as opposed to 36 percent who say it should not. And yet another survey found that 52 percent of voters, and 35 percent of Republicans, prefer extending unemployment benefits, even if it means increasing the deficit. This comes at a time when there are only 3.2 million job openings for 15 to 17 million unemployed.

Since the 1950s, the federal government has maintained unemployment insurance extensions in recessionary times until unemployment dropped to 5 percent. In 1983, Congress allowed the extensions to expire when the unemployment rate was 7.2 percent—an all-time record. But In this Great Recession, unemployment hovers at around 10 percent. Republican lawmakers would set a bad precedent to drop the extension of benefits now. And their reason for doing it—to prop up a bankrupt and failed philosophy of trickle-down economics—is shameless.