D.C.’s Trading Games Leave Jobless Workers Out

While jobless workers wait for relief, the White House compromises away any hopes.

By Seth Freed Wessler Dec 01, 2010

Congress cut a vital lifeline for the unemployed Tuesday night when it failed to pass a recession-time jobless benefit extension. About two million jobless workers could be severed from the program by New Years.

Now attention will turn to devising some way to extend the program and possibly retroactively restore the lost benefits. All signs point to the a trading game in which an unemployment insurance extension is coupled with some bi-partisan deal to extend the Bush-era tax cuts. If Congress does not reach a deal in the next three weeks, there’s a good chance people who’ve already faced long stretches of unemployment will suffer years of continued economic slump with no income safety net to help them through.

Unemployment insurance usually lasts for just 26 weeks, but in periods of high unemployment Congress has historically extended the program. Since the recession began, lawmakers have voted to extend the benefits four times and it now lasts 99 weeks in many states with high unemployment. An untold number of people, known as the 99ers, have already fallen off the end of their benefits, still unable to find jobs. If jobless benefits are not extended, a million more people will join those already cut off the program each month. There are 15 million unemployed people in the U.S.; 42 percent of them have been unemployed for longer than 26 weeks. People of color, single moms and young people are all more likely to be unemployed and underemployed for long periods of time.

On Monday, Sen. Max Baucus introduced a measure to reauthorize the extensions until the end of next year, but Republicans refused to support the measure, saying it would add too much to the deficit. Then on Tuesday, Senate Democrats again tried to pass an extension but ran up against predictable Republicans obstruction. Meanwhile, many Republicans insist on fully extending the Bush era tax cuts, which would add hundreds of billions more to the deficit.

In June, Congress let unemployment insurance expire for almost two months and about 2.5 million people lost the benefit. It was eventually restored and retroactively paid to those who’d been cut off. This time, there’s not much time to pass a restorative extension.

On a Tuesday morning conference call with reporters, Pennsylvania Sen. Bob Casey said he’d try to pass an extender by unanimous consent later that afternoon. But he agreed that the likelihood of getting Republican support was slim.

In response to a reporter’s question about how Congress might extend the program after it failed yesterday, Casey said, "we’ll have to think of another way to get it done. Not just this week and this month, but if it takes longer than that we’ll have to stay at it. You know how long it took us to get unemployment insurance as part of a bigger bill on tax extenders [last summer]." But with Republicans poised to take control of the House and gain strength in the Senate in January, the next three weeks may be the only window left.

So, what now?

The way forward looks to be a deal tying unemployment insurance to a compromise over the Bush tax cuts. Following a closed door meeting with Republicans Congressional leaders on Tuesday, President Obama tapped a team to work on a deal. The group, which apparently includes the Treasury Secretary, the White House budget director and a two members of Congress from each party, will be tasked with coming to an agreement about the controversial Bush-era tax cuts. The most likely scenario, reports the Huffington Post’s Arthur Delaney, is that the deal includes a temporary extension of some of the cuts (in question are cuts for  families making over $250,000 a year) coupled with other issues, which the president suggested could include unemployment insurance.

"We discussed working together to keep the government running this year — and running in a fiscally responsible way," Obama told reporters this week. "And we discussed unemployment insurance, which expires today. I’ve asked that Congress act to extend this emergency relief without delay to folks who are facing tough times by no fault of their own."

It’s not the only questionable compromise the president’s offered this week.

In an attempt to assuage Republican deficit hawks, Obama announced a plan on Monday to freeze salaries for all civilian federal employees for two years. The plan raised objections from workers and unions who said working people were being thrown under the bus. The president likely hopes the announcement will make clear his willingness to compromise on deficit issues in order to secure agreements on things like unemployment insurance. But for the purposes of jobless benefits, the move may have been in vain because conservatives have repeatedly said that their concern about extending the program is as much about the deficit as it is about an unfounded belief that unemployment insurance discourages people from working.

Tell that to the millions who started to see their jobless benefits terminated last night. In 2009, the program kept 3.3 million people from falling below the poverty line. The cut off will cast many into free fall.