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.