UI: More Than Just An Extension

The package of “extenders” that was just enacted by Congress and that will soon be happily forgotten by most observers actually represented a bit more than the act of legislative throat-clearing it seemed to be. Yes, the extension of the payroll tax cut, of Unemployment Insurance (UI) benefits, and the Medicare provider reimbursement rate “doc fix” were thrown together as must-pass items that neither party in Congress wanted the blame for obstructing. There was not a lot of public talk about substance, beyond conservative grumbling about the “dependency” involved in UI and the need for bigger changes in Medicare.

But as Annie Lowery of the New York Times usefully explains, the UI provisions of the package actually include some interesting reforms in a very old system:

The bill, which passed Congress on Friday and President Obama has said he will sign, allows states to use unemployment insurance money for programs that help move the jobless back into the work force. Such programs, like Georgia Works, often offer employers wage subsidies for taking on and retraining jobless workers.

The bill also requires states to reassess the eligibility of workers for their unemployment insurance — confirming, for instance, that a person receiving long-term benefits is actively searching for a job. That reassessment provides an opportunity to tailor career counseling and other re-employment services to the long-term jobless.

The bill additionally expands “work sharing” programs that can help reduce layoffs at big businesses. In effect, businesses would have the option of cutting the hours of five workers by 20 percent each, say, rather than laying off one worker. The business could then use unemployment insurance money to help supplement the workers’ wages to make up for the lost hours.

Though it seems a bit like a return to the policy debates of the late 1990s, when the economy was strong enough to make it useful to dwell on adjustments of skill levels to a fast-changing opportunities rather than simply maintaining a minimal safety net, the UI reforms in the extender package sound sensible. UI has not in any significant way operated as a “reemployment services” program, and it should. And wrinkles like “work sharing,” which is common in other countries, could have prevented unemployment from reaching and remaining at its current levels.

It’s obvious why none of us expect significant legislative activity, much less policy innovations, much less policy innovations supported by people in both parties, in the current climate in Washington. But the UI changes represent a small ripple of hope in a sea indifference, cynicism and obstruction. Pretty much anything beyond that will require big changes in the political configuration of forces.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.