S01E11: Unemployment Insurance Extension

One page summary below the fold…

S. 3706: Americans Want to Work Act
Introduced 8/4/2010
Sponsor: Sen. Debbie Stabenow (D-MI)
Key cosponsors: Sens. Harry Reid (D-NV), Dick Durbin (D-IL), Chuck Schumer (D-NY), Sheldon Whitehouse (D-RI)
Click here to download this summary (pdf)

Cosponsors: 11 (11 Democrats, 0 Republicans). Full list at http://thomas.loc.gov/cgi-bin/bdquery/z?d111:SN03706:@@@P

Status: Request for floor consideration filed on 9/29/10. Blocked by Sen. George LeMieux (R-FL) on behalf of Republicans, who oppose any bill that adds to the deficit. It is possible, though unlikely, that the measure will be revisited in the lame duck session.

Purpose: Normally, unemployment benefits last for 26 weeks and are mostly paid for by the states. Yet in periods of high unemployment, the federal government has traditionally stepped in with emergency measures to provide extra weeks. The Emergency Unemployment Compensation program, created in June 2008, currently structures these efforts with up to four new “tiers” of benefits.

As the anemic American economy drags on, the phenomenon of persistent long-term unemployment has reached levels not seen since the Great Depression. The Economic Policy Institute estimates that there are currently five unemployed workers for every job opening. As a result, those who have exhausted all available unemployment benefits, up to 99 weeks, with little hope of finding a job have become a politically salient group colloquially termed the “99ers”.

Over 100 prominent economists have signed onto a manifesto calling for further stimulative federal spending to “replace the lost purchasing power of the unemployed and their families.” Similarly, the CBO and outside economists such as Mark Zandi of Moody’s estimate UI benefit extension to be one of the most efficient ways to create new jobs.

Summary: The Americans Want to Work Act provides a means of helping those 99ers and creating jobs in the process. Specifically, it:

• Adds a new Tier 5 of emergency unemployment benefits for 99ers, adding 20 more weeks of support in states with 7.5% unemployment or higher.
• Includes retroactive eligibility for the new tier for those who have exhausted available benefits in recent months. It does not, however, pay benefits retroactively.
• Extends for one year the HIRE Act payroll tax credit for businesses hiring those unemployed for over 60 days.
• Doubles the credit amount to $2,000 for businesses hiring those who have exhausted their UI eligibility.
• Does not change existing unemployment benefit requirements such as job searches.

CBO Score: None provided.

Supporters: most Democrats, progressive economic think tanks, American 99ers Union, etc.

• Supporters, continuing their arguments throughout the economic downturn, believe emergency spending is necessary to reduce the unemployment rate, and this priority trumps legitimate concern over deficits and debt.

Opposition: most Republicans, conservative economic think tanks, etc.

• Opponents believe this bill specifically must be deficit-neutral, preferably paid for with unspent stimulus funds. More generally, they feel unemployment benefits cause recipients to become lazy and seek out work with less vigor, thus hurting the economy.

Further links
Full bill text: http://www.govtrack.us/congress/billtext.xpd?bill=s111-3706
Official CRS summary: http://thomas.loc.gov/cgi-bin/bdquery/z?d111:SN03706:@@@D&summ2=m&
Wikipedia on the 99ers: http://en.wikipedia.org/wiki/99ers
CBPP: How Many Weeks of Unemployment Compensation Are Available?: http://www.cbpp.org/cms/index.cfm?fa=view&id=3164
Sen. Stabenow overview of the bill: http://stabenow.senate.gov/infocus/AmericansWanttoWork.html
Economic Policy Institute brief supporting UI extension: http://www.epi.org/publications/entry/a_good_deal_for_all
Article on the bill’s failure to move: http://washingtonindependent.com/99112/americans-want-to-work-act-for-99ers-fails-in-senate
Wall Street Journal Article Opposing Extension of Benefits: http://online.wsj.com/article/SB10001424052748704862404575351301788376276.html
Huffington Post article on economic impact: http://www.huffingtonpost.com/2010/11/09/failure-to-reauthorize-un_n_781021.html

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