A potential showdown could begin on Monday as Congress reconvenes and is expected to take up the issue of extending long-term unemployment benefits.
“Emergency UI has one of the largest economic bangs for the buck,” said Mark Zandi, chief economist at Moody’s Analytics. (Photo: khalilshah/cc/flickr) Roughly 1.3 million Americans were left in economic uncertainty on December 28 when Congress failed to extend long-term jobless benefits for those out of work for more than 26 weeks, an act John Nichols described as “cruelty for the sake of cruelty” and what Sen. Bernie Sanders (I-Vt.) said was also “bad economics.”
In his weekly address on Saturday, President Obama urged Republicans in Congress to extend unemployment insurance.
Senate Democrats are hoping to get the support of five Republicans needed in order to reach the 60 votes they required to advance the legislation, though even if it passes that chamber it will face a battle in the House
“Just a few days after Christmas, more than one million of our fellow Americans lost a vital economic lifeline — the temporary insurance that helps folks make ends meet while they look for a job. Republicans in Congress went home for the holidays and let that lifeline expire. And for many of their constituents who are unemployed through no fault of their own, that decision will leave them with no income at all,” Obama said in his address.
“What’s more, it actually slows down the economy for all of us. If folks can’t pay their bills or buy the basics, like food and clothes, local businesses take a hit and hire fewer workers. That’s why the independent Congressional Budget Office says that unless Congress restores this insurance, we’ll feel a drag on our economic growth this year. And after our businesses created more than two million new jobs last year, that’s a self-inflicted wound we don’t need.”
“So when Congress comes back to work this week, their first order of business should be making this right,” Obama added.
That provididng this “vital economic lifeline” helps all of us is something many others have sought to emphasize.
The Nation‘s George Zornick wrote last week:
According to a new analysis from the minority staff of the House Ways and Means Committee released Friday, $400 million was drained from state economies this week alone thanks to the lapse.
Unemployment benefits are one of the more effective forms of stimulus because the money is badly needed and thus spent right away. The Congressional Budget Office says 200,000 jobs will be lost this year if the benefits are not restored, and this week the damage began.
A statement from Sen. Sanders office added, “The CBO also projected a 0.2 percent drop in the nation’s gross domestic product unless the benefits are extended.”
“Nobody wins when we leave people looking for work out in the cold.”
–Amy Traub, Demos“Emergency UI has one of the largest economic bangs for the buck,” Mark Zandi, chief economist at Moody’s Analytics, told In Plain Sight, because by his calculations, for every dollar received in those benefits, $1.49 goes back into the economy.
“Nobody wins when we leave people looking for work out in the cold,” Amy Traub, a senior policy analyst at advocacy group Demos, also told In Plain Sight. “It hurts the economy when local businesses can’t rely on basic spending… It strains the private safety net when food banks and charities have to serve more people.”
“Individuals that are receiving unemployment benefits are sometimes just above the threshold to receive food stamps,” food bank director Ron Pringle told NPR, “so after those unemployment benefits were cut, then our local [Department of Social Services] officers … started seeing such an increase in individuals coming and applying for food stamps.”
Democracy Now!‘s Amy Goodman wrote in her most recent column:
“This is the wrong thing to happen at the wrong time for our economy,” Imara Jones told me. He is the economic justice contributor for Colorlines.com, and served in the Clinton White House, where he worked on international trade policy. “Jobless benefits are actually stimulative to the economy,” he said. “Every $1 we provide to someone of unemployment benefits yields $1.60 in economic activity. And that’s why the loss of these benefits is going to rob our economy of $41 billion.” People living on the edge financially spend what they have to get by. Those in the top echelons of our economy, the top 1 percent, can take their income and hold on to it, or stash it away into an offshore account.
But in contrast to those dealt austerity and forced to the economic brink, Robert Reich notes, “2013 marked one of the biggest redistributions in recent American history. It was a redistribution upward, from average working people to the owners of America.”
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Source: Common Dreams