White House officials are reportedly putting together a series of measures, all of which have traditionally enjoyed bipartisan support, intended to help make a modest difference in creating jobs. Near the top of the list: extending unemployment benefits that are set to expire in December.
As Tanya Somanader reports, House Majority Leader Eric Cantor (R-Va.) is already against the idea. Indeed, CNBC host Jim Kramer interviewed Cantor this morning, and the host assumed that Cantor support extending unemployment benefits “given the chaotic situation.” The far-right Virginian set him straight.
“Jim, the most important thing we can do for somebody who’s unemployed is to see if we can get them a job. I mean, that’s what needs to be the focus. For too long in Washington now we’ve been worried about pumping up the stimulus moneys and pumping up unemployment benefits and to a certain extent you have states for which you can get unemployment for almost two years and I think those people on unemployment benefits would rather have a job. So that’s where our focus needs to be.”
Cantor didn’t definitely rule out the idea, which suggests to me congressional Republicans will — you guessed it — hold an extension hostage until Democrats make some kind of major concession in order to help those struggling most.
Paul Krugman had a column a while back that Cantor may want to consider (that is, if he were really interested in the best policy outcome).
When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.
Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.
Krugman wrote that a year ago, and fortunately, benefits were extended a few months later. With Cantor and his cohorts now in the House majority, the jobless probably won’t be as fortunate this time.
The basic concept here is quite simple: unemployment benefits are good for the economy. People who receive the aid aren’t sticking it in some money-market fund; they’re spending it and doing so immediately because it’s their main source of income. This injects demand and capital into the economy quickly, helping the beneficiaries and the rest of us.
It’s hard to say whether Cantor can’t understand this or chooses not to. Either way, if this basic part of the Obama agenda can’t even get GOP support, the rest of the White House ideas don’t stand much of a chance.