Democrats this week put the issue of economic inequality squarely in the GOP court by pushing an emergency measure in the Senate that would extend expired jobless benefits for more than a million Americans for three months. To the lawmakers’ surprise, enough Republican senators played along Tuesday to clear the 60-vote hurdle needed to debate the measure, which had one Republican co-sponsor. A vote on the bill is possible later this week.
Democrats are united behind the extension for 1.3 million people who lost unemployment insurance when it expired on Dec. 28. But this is a tricky issue for Republicans. Why is that, and is there is room for compromise?
Q. Why the Republican hesitant to extend unemployment benefits?
A. The chief reason is that the short-term extension, which would cost the federal government $6.4 billion, is not paid for. That may have been acceptable under President George W. Bush in 2008, when the program was started to help Americans after their state jobless benefits had run out. But now “we have a debt crisis,” explained Senate minority leader Mitch McConnell (R) of Kentucky to reporters Tuesday. Even if the six Senate Republicans who sided with Democrats Tuesday eventually vote for the bill, House Speaker John Boehner (R) of Ohio vows not to take it up unless the extension is paid for.
Other reasons also come into play. Republicans worry that a temporary safety net is becoming a permanent hammock. Unemployment is slowly coming down and job growth is continuing – a trend that points to a brighter outlook for the jobless. Republican leaders emphasize the need to get at the root of the problem by creating more jobs, faster. For instance, they’re challenging President Obama to approve the Keystone XL pipeline that would transport oil from Canada through the United States, and to roll back environmental regulations that adversely affect jobs related to coal-power.
Democrats counter that the federal jobless benefits are truly emergency funds for people in desperate need. They argue that extensions were renewed as a matter of course by both Democrats and Republicans during periods of high unemployment. And they cite today’s persistently high jobless rate (7 percent vs. 5.6 percent when the program started); the stiff competition for openings, especially for middle-aged people who have lost their work; and the economic payback from extending the benefits. For every $1 spent on the program, $1.55 is returned to the economy through spending by recipients, according to one estimate.
Q. Would blocking jobless benefits be smart politics for the GOP?
A. Part of the answer depends on each state’s jobless rate. Not surprisingly, the GOP senator who co-sponsored the three-month extension, Dean Heller of Nevada, comes from a state that has led the nation in unemployment for the past three years.
“I know many economists point to a national unemployment rate that is improving, but at home we do not feel it,” he said on the Senate floor on Monday. Then he cited his experience over Thanksgiving in Reno, serving up meals with his daughter to people in need. Every year, he said, the number of people who show up increases. “This year the venue was absolutely packed,” he said, describing a line that stretched for four blocks.
While controlling the debt plays well with the Republican base, the majority of Americans support extending emergency unemployment insurance (55 percent approve, according to a recent Hart poll). Republicans, too, must consider their party’s image as sometimes insensitive to the poor. Senator Heller suggests that Republicans and Democrats work out a “fiscally responsible” way to pay for the extended benefits and create more jobs during the three months that the bill would take effect.
His co-sponsor, Sen. Jack Reed (D) of Rhode Island, agrees. The three months is designed to give the Senate and House time “to think through this program in an orderly way and to look for appropriate offsets” if necessary, he said on Monday. [Editor's note: An earlier version misstated Sen. Reed's state.]
Q. Is it possible that Republicans and Democrats can compromise on unemployment insurance?
A. Yes. But it won’t be easy. The starting positions on both sides follow partisan themes that rankle. Senator McConnell Tuesday proposed paying for an extension by putting the Obamacare individual mandate on hold for a year. That’s a nonstarter for Democrats, and Senator Reid quickly squashed the proposed amendment. Democrats suggest paying for it by closing corporate tax loopholes. Similarly, Republicans disapprove.
Still, Reid says he’s open to a “serious” proposal for a “pay-for,” and individual lawmakers are discussing options, including ways to better connect the jobless with jobs.