Should Democrats Let Republicans Kill Extended Unemployment Benefits?

Dave Johnson

Unemployment benefits run out at the end of December for 1.3 million long-term unemployed. President Obama’s Saturday address called for an extension of the benefits, but apparently some Congressional Democrats don’t think this is worth taking a stand that risks destroying the Republican Party.

House and Senate budget negotiators are currently working on a post-shutdown “deal” to keep the government operating. At issue are the sequester cuts – Democrats want spending levels returned to sanity, Republicans want the cuts kept in place, if not increased. The sequester slows the economy, costs hundreds of thousands (or more) of jobs, and seriously hurts the poor, disabled and elderly. All of this is a win-win for Republicans because it makes President Obama and Democrats look bad, undermines public trust in government and (bonus!) helps drive wages down and inequality up.

One thing Republicans want is to cut off long-term unemployment benefits by not renewing them, even though 1.3 million Americans are in this situation. Democrats should make this a deal-breaker and let Republicans shut down the government if they want to stop it.

Why Democrats Should Take A Stand

Why should Democrats hold out and demand a continuation of long-term unemployment benefits? There are solid economic and human reasons, but there is another really good reason: because if Republicans force another shutdown, it’s game over for them – and they know it.

Democrats and the media seem to have forgotten that Republicans shut down the government in October. The shutdown was incredibly unpopular and divided the Republican party. For example, an Oct. 21 CNN/ORC International poll found that, “Just over half the public says that it’s bad for the country that the GOP controls the House of Representatives … more than six in 10 Americans say that Speaker of the House John Boehner should be replaced.”

So another shutdown would possibly clinch the deal and end the Republicans as a national party. The public is sick of Republicans shutting down the government and harming the economy by doing so, and solidly supports helping the unemployed. The last shutdown was the last straw; one more time will be the end of them politically.

Theoretically this would give Democrats tremendous leverage, enabling them to demand all kinds of things that are badly needed by We the People, including restoration of taxes on the wealthy and an end to corporate loopholes; investment in maintaining our country’s infrastructure, which would provide jobs and make our economy more competitive; restoration of spending levels on important programs for the poor, disabled and elderly; and, of course, extending unemployment benefits for the long-term unemployed. Theoretically Democrats could (and should) ask for all of these, and dare Republicans to refuse and cause a shutdown.

But Democrats appear willing to give Republicans a pass. On ABC’s This Week (in case you aren’t familiar with it, it is one of those Sunday news-for-elderly-male-lobbyists shows the corporate networks put on) Sen. Richard Durbin (D-Ill.) said that keeping long-term unemployment benefits in place is not a deal-breaker for Democrats. (Apparently he doesn’t know very many Democrats outside of D.C.) Unfortunately, other reports that Democrats are not demanding an extension of unemployment benefits are leaking out as well.

Extended Unemployment Benefits Helps The Economy

Republicans like Kentucky Sen. Rand Paul say that providing long-term unemployment is a “disservice” to the unemployed because it keeps people from being desperate and hungry enough to take the nastiest, lowest-wage, most humiliating horrible, life-sucking, billionaire-enriching job that might be available. Except right now there is high unemployment, too few jobs – three unemployed for every job that is available. So this means these desperate people will just be taking someone else’s job.

And by the way, this was partly the point of unemployment benefits in the first place – to help unemployed workers hold out for fair wages because good wages are good for the economy. A pool of desperate, hungry, unemployed workers tempts employers to profit from laying off better-paid workers and hiring at rock-bottom wages. (Come to think of it, this might be exactly the Republican plan.)

Republicans and some Democrats also claim to worry about the “cost” (to high-income taxpayers) of providing unemployment benefits.

Providing long-term unemployment benefits is not a “cost.” Unemployment benefits increase employment because it enables people to continue to … eat and stuff … which means they shop at local stores, which increases the need for those stores to hire. The Congressional Budget Office estimates that cutting long-term unemployment benefits will cause a drop of up to 0.3 percent in GDP and increase unemployment by 300,000 jobs next year.

The New York Times’ Paul Krugman addressed this in his column this week, “The Punishment Cure“:

… the G.O.P. answer to the problem of long-term unemployment is to increase the pain of the long-term unemployed: Cut off their benefits, and they’ll go out and find jobs. How, exactly, will they find jobs when there are three times as many job-seekers as job vacancies? Details, details.

… Businesses aren’t failing to hire because they can’t find willing workers; they’re failing to hire because they can’t find enough customers. And slashing unemployment benefits — which would have the side effect of reducing incomes and hence consumer spending — would just make the situation worse.

But suppose paying out unemployment benefits was a “cost” instead of something that actually helps the economy – and therefore businesses and people? Exactly who is our government supposed to be for if not to assist people like the long-term unemployed (after putting in literally trillions to bail out the bankers that caused this mess we are in)? Isn’t this a cost that a government of a democracy should pay? (Remember, for comparison many of the bailed-out bankers used that bailout money to pay bonuses, not to help the economy.)

Bottom line: Democrats should hold out for this because it helps Americans and is good for the economy. Republicans won’t shut down the government again over this – and if they do it’s the end of them. That solves our country’s job-and-economy-obstruction problem.

What You Can Do

Call your member of Congress and your Senators and demand that OUR government start working for US instead of the 1 percent. Tell them that it is not acceptable to cut off help for the long-term unemployed.

AFL-CIO: Tell Congress: No Budget Deal that Punishes Federal Workers and the Unemployed,

“We demand that you oppose billions in cuts to federal workers’ retirement in a budget deal. We also call on you to make sure an extension of insurance for unemployed workers passes before it expires at the end of the month.”

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