No, Congress, You Shouldn’t “Pay For” Extending Unemployment Insurance

Richard Eskow

Despite record-high levels of unemployment – especially long-term unemployment – Republicans are refusing to permit any extension of unemployment insurance benefits unless it’s “paid for” with money taken from other government programs. They’ve never demanded that of Republican administrations.

The Republican argument against extending these benefits is disingenuous, mean-spirited, and insincere. But instead of calling them out on it, loudly and repeatedly, many Democrats are likewise lamenting that “we can’t find enough money,” as Senate Majority Leader Harry Reid said on Thursday afternoon. Added Reid: “I have been waiting here for more than 24 hours for a reasonable proposal by my Republican friends to pay for this.”

Even worse, Senate Democrats have proposed something Los Angeles Times business columnist Michael Hiltzik called a “flinthearted idea”: to pay for the extension by cutting Social Security benefits for the disabled. That sort of thing used to be considered too ruthless even for Republicans. Now it’s the “liberal” party’s proposal.

The Democrats’ offer perpetuates the misguided obsession with “pay-fors.” It also stigmatizes the recipients of government benefits, another preferred Republican theme, in this case by exaggerating the impact of “double dipping” between government programs.

The simple truth is, Democrats are still being outmaneuvered by Republicans on economic policy. They’re letting the GOP call the shots, rhetorically, even though Republicans lost two out of three seats of federal government (the Senate and White House). They even lost the total popular vote for the House of Representatives.

Here’s how Dems fumbled the economic debate. First, they seem to have accepted the Republicans’ insistence that there be no tax increases for corporations, which are reaping record profits, and the very wealthy, who are capturing a historically high percentage of our national income. Democrats have treated this as a fait accompli and barely even mention these tax hikes any more, even though they’re politically popular and urgently needed.

Then Democrats accepted the idea that any new initiatives, even those which address our ongoing economic crisis, must be “paid for.” Since new taxes on the wealthy are off the table, beleaguered poor and middle-class Americans are the only ones left to pick up the tab – either through reduced services or indirect tax hikes that leaves corporations and rich individuals alone.

Here’s a better idea: Don’t try to pay for extended unemployment benefits. Don’t boast, as Reid did last week, that the extension is “entirely paid for.” Sure, Democrats will eventually need to make a deal – if they can – in order to extend unemployment insurance benefits. But why aren’t they first making the case against “paying for” those benefits on the Republicans’ terms?

Why aren’t Democrats instead speaking up against the “pay for” logic that gives a free pass to the wealthy and corporations – especially when the total cost is a blip, a rounding error, on a $1 trillion 2014 federal budget?

Economically, “pay for” is a Catch-22: It means every job-creating proposal must be offset with job-killing cuts elsewhere.

Besides, it’s not as if Republicans actually mean what they say. Their concerns about deficit spending inevitably disappear when the subject is tax cuts for the wealthy or goodies for defense contractors. They don’t really care about “paying for” anything. That’s just a rhetorical device, a stalling tactic against a program which (like so many popular and useful programs) they simply hate.

If Republicans really wanted to “pay as they go” for deficit-increasing measures, they won’t keep extending “temporary” tax breaks for favored constituencies. Instead they’d adopt the proposal from Howard Gleckman of Forbes magazine, who suggested that Congress apply similar “pay-for” rules to the dozens of “temporary” tax extensions that it routinely renews every year. As Gleckman points out, the benefit of those deficit-increasing tax breaks go to groups that include “Manhattan real estate developers, auto racetrack owners, movie studios, distillers of Puerto Rican rum, multinational corporations” and other business interests.

When it comes time to renew these tax breaks, all the deficit fears and “pay-go” talk go right out the window.

As for the federal deficit, it’s been falling rapidly – too rapidly for the current economy, in fact, which urgently needs short-term government investment in economic growth. Why aren’t the Democrats talking about that? Why aren’t they telling voters that a Democratic Congress would be passing jobs bills, rebuilding our crumbling infrastructure, and getting the economy moving again?

Once again, it looks like Democrats are walking into a trap. Some Democratic commentators permitted themselves an indulgent chuckle last week at House Majority Leader Eric Cantor’s slightly Zen koan-like remark that “our focus is on employment, not unemployment.” But Cantor prefaced that comment with the much more specific (if not altogether grammatical) statement that “our focus is about wanting people to get a job.”

The Republican “jobs plan” is based on discredited economic voodoo. But at least they’re talking about jobs. How will Democrats do the same, if they’ve closed the door to anything that’s not “paid for” – and ordinary Americans are the ones who’ll have to pay?

Democrats will insist that there’s no point arguing for policies that can’t pass through the current Congress. But voters won’t change the composition of Congress unless they’re presented with a clear alternative before the compromising begins.

It’s a circular trap from which there is no escape – except for leaders with the guts to challenge discredited, austerity-based “pay for” mantras and call for investment in jobs, growth and fairness. Millions of unemployed and under-employed Americans are waiting for that kind of leadership.

Comments