The other economic policy set to expire

There’s been quite a bit of talk lately about Congress debating an extension of the payroll tax break, which is set to expire in just a month, and for good reason. An increase would undermine the economy at a delicate time. But as Laura Clawson noted yesterday, “The payroll tax isn’t the only thing that needs extending to help families keep making ends meet. Congress also needs to extend emergency unemployment benefits.”

Quite right. It’s a policy many leading congressional Democrats are eager to fight for.

Senate Health, Education, Labor and Pensions Chairman Tom Harkin vowed today to prohibit Congress from adjourning for the holidays unless it passes an extension of unemployment benefits for the long-term jobless.

Flanked at a press conference by House and Senate Democratic colleagues, Secretary of Labor Hilda Solis and scores of unemployed workers who traveled to the Capitol, the Iowa Democrat guaranteed that Congress will remain in Washington, D.C., through Christmas if the benefits are not extended.

“Let me just put it this way: There will be no Christmas for Congress unless there is an extension of the unemployment insurance benefits,” Harkin said. “Believe me, we have a number of us on the Senate side. We’re not going home. We’re not going to have Christmas for Congress until you get an extension of unemployment benefits.”

House Democrats are thinking along the same lines, with House Minority Whip Steny Hoyer (D-Md.) and House Ways and Means ranking member Sandy Levin (D-Mich.) saying Congress shouldn’t adjourn until jobless aid is approved. “We’ll see if Congress has the heart and soul to act,” Hoyer said.

The White House, for the record, strongly supports an extension of both the payroll tax break and unemployment benefits.

And in case anyone’s forgotten, when it comes to bang for the buck, jobless aid is an excellent stimulus. In case Republicans have forgotten, Paul Krugman had a column a while back that GOP lawmakers might find helpful.

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.

The odds appear to be against an extension — Republicans seem to have an almost-personal disdain for the unemployed — but it’s a fight worth having.