POLITICS

House GOP Ignores Congressional Budget Office On Unemployment Benefits

04/01/2014 12:37 pm ET | Updated Apr 01, 2014

WASHINGTON -- House Speaker John Boehner (R-Ohio) says he is against restoring long-term jobless benefits because doing so wouldn't create jobs.

"We have always said that we’re willing to look at extending emergency unemployment benefits again, if Washington Democrats can come up with a plan that is fiscally responsible, and gets to the root of the problem by helping to create more private sector jobs," Boehner said.

But the Congressional Budget Office has repeatedly estimated that unemployment extensions add thousands and thousands of private sector jobs to the economy. In December, the CBO said a Democratic proposal to restore long-term benefits for a full year would increase employment by about 200,000 jobs by the end of 2014. (The Senate is currently considering a bill that would restore the benefits through May.)

While Boehner is just not that into what the budget office says about unemployment extensions, he loves their take on raising the federal minimum wage to $10.10 per hour, which the CBO figures could reduce employment by half a million jobs.

"What I’ve long said is that raising the minimum wage destroys jobs -- and that was confirmed last week by the Congressional Budget Office -- at least 500,000 jobs would be lost, maybe as many as a million," Boehner said last month.

Boehner spokesman Michael Steel suggested the speaker doesn't consider the CBO the ultimate arbiter of how legislation can affect the economy. “CBO analysis is a useful tool, but sometimes fails to include real-world factors, like the economic impact of pro-growth policies," Steel said in an email.

Of course, emphasizing one finding and ignoring another is common practice in Washington. Many Democrats denounced the CBO's minimum wage job-loss findings, citing research by other economists. If he felt like it, Speaker Boehner could point to conservative economists who dispute CBO's estimates for the jobs created by unemployment spending.

The budget office uses basic economic theory to explain how unemployment benefits boost the economy: "Recipients of the additional benefits would increase their spending on consumer goods and services," CBO says. "That increase in aggregate demand would encourage businesses to boost production and hire more workers than they otherwise would, particularly given the expected slack in the capital and labor markets."

Long-term unemployment insurance for people out of work six months or longer lapsed at the end of December, meaning the economy has missed out on $4.7 billion worth of federal spending, according to an analysis by Congressional Democrats. Since then, more than 2 million workers have missed out on compensation.

“Unemployment insurance has played a vital role in our economic recovery and the program’s expiration has drained billions of dollars from state economies during the last three months," Rep. Sandy Levin (D-Mich.) said in a statement. "Hundreds of thousands of jobs are at stake, as are the livelihoods of millions of Americans laid off through no fault of their own.”

Senate Majority Leader Harry Reid (D-Nev.) has said he expects the Senate to pass its unemployment bill this week. Whether the House votes on the bill will be up to Boehner.

This story has been updated to include comment from Boehner's office.

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