Gov't Incapable of Scrounging $6 Billion in Offsets to Extend Unemployment Benefits

So the Senate is talking about spending $6.4 billion to extend long-term unemployment benefits for people somehow left out of the recovery (which if it were true, would of course negate the need for the extension in question). This extension would cover about three months of the program, which would give folks up to a total of about 50 weeks of pay of up to $300 per week.

The problem? Republicans don't want to go along with this unless the same amount of dough is cut from somewhere else in the federal budget for fiscal 2014, which will be in the neighborhood of $4 trillion (it's a pricey part of town). Senate Majority Leader Harry Reid (D-Nev.) said that's a mistake because “Each dollar that we spend on unemployment insurance benefits increases gross domestic product by $1.50.” If that were true, shouldn't Reid and others be pushing for much more such spending? Hell, if I could get that sort of return on my investments, I'd be all in.

You may recall that not so very long ago, Dems and Reps got together to toss sequestration cuts out the window and agree on spending an extra $45 billion in 2014 plus another extra $20 on top of that in 2015. Because, you know, nobody can get by spending the same amount of money one year after another.

The latest drama reminds me of the time in 2010 when basically the only Republican in the Senate willing to insist on offsetting cuts as a precondition for extending unemployment benefits was crazy old Jim Bunning (R-Ky.), the Hall of Fame baseball pitcher whose long-overdue retirement allowed Sen. Rand Paul to join the World's Greatest Deliberative Body. In 2010, Bunning's insistence that the government find savings elsewhere was seen as just one more reason the old coot had to hang up his cleats and go to that big dugout in the sky (or wherever retired ballplayers and senators go).

But you know what? Bunning was right then and the Republicans are right to insist on offsets now too. The idea that unemployment benefits are really a super-efficient stimulus plan, a la Reid, is a joke, and everyone knows it. ON NPR this morning, I heard Reid channel Nancy Pelosi and claim that there's nothing left to cut.

If you're going to make a humanitarian case in favor of continually extending unemployment benefits, then make that argument, for god's sake. And recognize, too, that there are legitimate reasons to be wary of infinitely extending long-term unemployment benefits (which have been extended almost a dozen times since 2008). First and foremost is a concern for displaced workers. Many economists believe that to the extent that extended benefits dissuade people from quickly taking jobs, they erode skills and future earnings of the unemployed.

And if you're the Republicans and are serious about hunting for offsets, come up with ideas less byzantine than New Hampshire Republican Sen. Kelly Ayotte's underwhelming plan to pay for the extension by stopping illegal immigrants from claiming the additional child tax credit on their income tax returns. You're supposed to be the party of small government. If that's the best you can come up with in a $4 trillion budget, just follow Jim Bunning's lead and retire now.

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  • cw||

    Gov't Incapable of Scrounging $6 Billion in Offsets to Extend Unemployment Benefits

    Didn't you hear? NOTHING. LEFT. TO. CUT.

  • Fist of Etiquette||

    Plenty to add.

  • cw||

    Although I beat you, so there's that.

  • ATXChappy||

    Nothing left to cut indeed!

    http://reason.com/24-7/2014/01.....employment

    I know my math sills are a little weak. But, isn't 7.7 billion 6 billion?

  • ATXChappy||

    Dang! The system removed my less than sign. That should read 7.7 is less than 6.

  • Calidissident||

    No, 6 billion is less than 7.7 billion

  • Mr Whipple||

    Didn't you hear? NOTHING. LEFT. TO. CUT.

    Except Congresscritters' salaries.

  • ||

    Why would they scrounge when they can just borrow and steal more? Do you understand how government operates now? There is no "reverse" gear in their gearbox.

  • cw||

    I keep wondering why there's even a fight over taxes, when both parties know that the Fed and the dollar's reserve currency status allow them to borrow practically indefinitely, giving their voters "something for nothing." Stupid talking point, I guess.

  • ||

    Because politics is not about reality.

  • Paul.||

    There's no brake either. In fact, the gas pedal is a kind of ratchet system, once you press a certain distance, it won't back off even if you take your foot off.

  • ||

    Yes, that's a better engineering metaphor, Paul. You nerd.

  • Paul.||

    I've been called worse.

  • Paul.||

    But enough about my mother.

  • creech||

    “Each dollar that we spend on unemployment insurance benefits increases gross domestic product by $1.50.”

    What sort of heartless bastard is Harry Reid? If he believes this, then he should be advocating for $600 per week for ten years. While he's at it, he could give us all a, say, $50,000 check and really goose this stagnant economy.

  • Sevo||

    “Each dollar that we spend on unemployment insurance benefits increases gross domestic product by $1.50.”

    See, you just put it in here, and then stuff and then YOU'RE RICH!

  • ||

    STOP USING LOGIC IT'S NOT FAIR

  • Mr Whipple||

    Well, I say, draw 1,000,000 names at random every week, and send them all a check for $5,000. That's what, $20 billion/month? Chop that off of QE.

    What could possibly go wrong?

  • Gilbert Martin||

    "The idea that unemployment benefits are really a super-efficient stimulus plan, a la Reid, is a joke, and everyone knows it. "

    Everyone except Paul Krugman and his Keynsian Kool-Aid gang.

  • cw||

    Where's the empirical evidence that the so-called multiplier even exists? It seems like its advocates just assume it into existence.

  • Mr Whipple||

    Muh feels.

  • The Original Jason||

    Lord Keynes has spoken. The matter has been settled.

  • Killaz||

    It exists. 0.8 is a multiplier. That happens to be the number Robert Higgs found most accurately reflecting reality in his study of the Great Depression under the best case scenario.

  • ||

    Other than because it is perfectly aligned with progtard wishful thinking, who is giving the whole multiplier bullshit real substance? The Fed? OMB? CBO?

  • Sevo||

    ..."who is giving the whole multiplier bullshit real substance?"...

    Voters getting "free shit".
    They don't realize the gov't is picking their pockets with the left hand and handing them the money (minus the vig) with the right.

  • cw||

    Our brain waves must be parallel, because I was wondering about the multiplier's existence, too.

  • Paul.||

    who is giving the whole multiplier bullshit real substance?

    The voters that re-elect him every few years.

  • Mumu Bobby||

    It's simple math. You print $100 and give it to Joe, then you print $100 and give it to Sal. You just multiplied the $100 you gave to Joe by 2. Keep on multiplying and soon everyone's rich and you got a robot wiping your ass.

  • NotAnotherSkippy||

    The GOP needs to go after the eco-pork. Why do we need $7500 tax credits for $100k Tesla's? Look at those heartless Democrats. They would rather give some rich guy a tax break to buy a sports car than extend unemployment benefits.

    Populism is a bitch.

  • Mr Whipple||

    But, but, but, teh arktik syclone.

  • Austrian Anarchy||

    Unemployment is supposed to be something already paid for by the people who might receive it later. What the hell did they spend the pre-paid UI premiums on already? And before anybody pipes up with that "business pay for it" nonsense, it is the incidence of taxation at work here, not the statutory incidence at play here.

  • NotAnotherSkippy||

    Extended benefits were never paid for by UI taxation. All of that spending has been above and beyond and came from the general fund. And even if it weren't, to say that the premiums cover this is to actually argue in favor of Reid, i.e. we don't need any offsets. You sure you want to do that?

  • Austrian Anarchy||

    UI is not supposed to be going into the general fund and it never was.
    Whenever States had a bumper crop of UI premiums, they and the feds kept dreaming up new ways to blow the overage. Remember the Clinton era idea for spousal paternity leave paid for with UI?

    So where the hell is all the money that was never paid back out in unemployment payments? And I could not give a care what Reid has to say about it even if it is accidentally right, which he isn't unless he is talking about recovering lost UI from past misspending.

  • NotAnotherSkippy||

    I didn't say it was supposed to be going into the general fund. What I said was that the extended benefits were never paid for by UI premiums. They were always additional spending that came just out of the general fund.

    By saying that the UI premium DID/DO cover the extended benefits, you're saying that no offsetting cuts are required. But they don't and they are.

  • Cytotoxic||

    I thought the extended UI was already expired. Is this just desperation on Reid's part?

  • Byte Me||

    "You're supposed to be the party of small government. If that's the best you can come up with in a $4 trillion budget, just follow Jim Bunning's lead and retire now."

    They can't really be the party of small gov't when they were founded as the party of big mercantile gov't. Also, both parties (with few exceptions) have only every increased spending.

  • RishJoMo||

    This makes a lot of sense dude.

    www.Planet-Anon.tk

  • Tony||

    If it's so easy to find $6 billion, then it must not be that big of a deal either. How about Republicans have to explain the actual, comparable threat posed by additional spending before they get to make such demands and put people into hardship?

  • TANSTaaFL||

    In Tony's world, it is a moral imperative that I must explain to the thief why robbing me is bad and a threat to everyone before I am allowed to resist.

  • Invisible Finger||

    I see no reason why these unemployable people can't apply for good ol' welfare.

    Or are we now creating welfare castes? One welfare system for your standard always-been-poor, and another higher-paying welfare system for the never-been-poor-before? Just so we can pretend we still have only X% of people below "poverty"?

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