WASHINGTON -- House Democrats on Wednesday introduced a bill to prevent two million people from losing their unemployment benefits during the holidays.
Congress has until the end of the month to reauthorize federally-funded unemployment benefits currently supporting five million long-term jobless (practically, they have just until Friday because of a Thanksgiving break next week). If the federal benefits are allowed to lapse, waves of people will prematurely stop receiving them, with two million people facing a cutoff by the end of the year.
"The unemployed in this country face a grim holiday season if we don't act quickly," said Rep. Jim McDermott (D-Wash.), who co-introduced the bill with House Ways and Means Chairman Sander Levin (D-Mich.). "In 75 years we have never cut federal unemployment benefits when the unemployment rate has been this high."
Extra weeks of federally-funded benefits are a routine part of the congressional response to every recession going back to the 1950s. In the early '80s, people laid off through no fault of their own could get up to 55 weeks of help. The extended benefits that time were not phased out until the unemployment rate declined to 7.2 percent. In some states today, the long-term jobless have been able to draw 73 weeks of federally-funded aid after exhausting their 26 weeks of state benefits.
"Terminating this emergency unemployment assistance will not only devastate families, but it also will hurt the entire economy by depressing consumer confidence and demand," said Rep. Levin. "We simply cannot afford to conclude this Congress without responding to those Americans who have been most hurt by the recession."
A three-month extension would avert a grim holiday season, but it might instead make for a sad March. Incoming House Speaker John Boehner (R-Ohio) is not likely to lead his caucus in voting for another reauthorization. Advocates for the unemployed want the benefits reauthorized for a full year, which the Economic Policy Institute estimates would cost $65 billion.
A shorter extension "gets you right into [the next Congress] so the Republicans can kill it," Rep. Jerrold Nadler (D-N.Y.) told HuffPost. "Three months is nice, but you think the recession's ending in three months?"
Republicans and conservative Democrats are willing to add billions to the deficit if it's in the form of tax cuts, but they've lost their appetite for deficit spending. Unemployment benefits have traditionally, but not always, been "paid for" with deficit spending instead of budget cuts or tax hikes. During the three previous benefits battles this year, Democrats absolutely refused to cave on the offsets question, even as they reduced the benefits and cut funding for other social programs. They argue offsetting the cost of unemployment insurance negates a core function of the benefits, which are supposed to stimulate the economy.
Some have speculated that Democrats will cut a deal by attaching the benefits to a reauthorization of the expiring Bush-era tax cuts for the rich, or by reducing the number of weeks of aid available.
Either way, the Senate is the chokepoint. McDermott previously told HuffPost he thought the House would have no trouble reauthorizing the unemployment benefits but that the "Senate has too many Republican Grinches." Indeed, Democrats in the Senate have not yet scheduled a vote on unemployment benefits, meaning a brief lapse is almost certain come December.
Ryan Grim contributed reporting.
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