THE FIGHT ON UNEMPLOYMENT BENEFITS ISN’T OVER YET…. The deadline came and went on extended unemployment benefits, leaving millions of jobless Americans to go without much-needed aid, even in a struggling economy with high unemployment. A last-gasp effort in the Senate was killed Tuesday night by Sen. Scott Brown (R-Mass.).
But the issue hasn’t completely gone away, and the White House is still hoping to see action on extended benefits.
In a conference call with reporters Thursday, Council of Economic Advisers Chairman Austan Goolsbee and council member Cecilia Rouse urged Congress to extend unemployment insurance benefits for millions of Americans who are out of work, citing a new report that argues not doing so would have dire consequences for the U.S. economy.
The council’s report, which details how a failure to extend the aid would affect people on a state-by-state level, says nearly seven million Americans could lose coverage by the end of next year and that 600,000 jobs are at stake. Goolsbee contended the gross domestic product would be six-tenths of a percent point lower in December of next year if the benefits are not extended, slowing the nation’s recovery from the worst recession since the Great Depression.
According to an earlier report by the National Employment Law Project, some two million workers nationally could lose benefits in December if they are not extended, an estimate the CEA also uses. The U.S. Joint Economic Committee estimates failure to extend the benefits program “would drain the economy of $80 billion in purchasing power and result in the loss of over one million jobs over the next year.”
“The data is quite clear from many outside sources that people on unemployment insurance, when they lose the unemployment insurance, there’s a very significant drop off in the amount of consumption spending that they do,” Goolsbee said. “If you’re going to have millions of people just before the holidays losing their benefits and then multiple millions in the months that follow losing their benefits, the impact on consumer spending is significant.”
The report, including state-by-state numbers, is online here (pdf).
I certainly agree with the CEA’s sentiment here, and can only dream of Congress doing the right thing, but taking a step back, I’m encouraged by the fact that this is still the subject of discussion at all. My fear was that Tuesday at midnight was the end of the debate — benefits weren’t extended, and policymakers were prepared to move on.
Today’s efforts suggest the White House hasn’t given up. If there’s some kind of deal to be had on tax-cut capitulation, it’d be criminal not to include the unemployed in the mix.