CQ TODAY ONLINE NEWS
Sept. 22, 2011 – 11:13 p.m.
Talks on Jobless Aid Include Broader Rewrite
By Joseph J. Schatz and David Harrison, CQ Staff
The difficult nature of long-term joblessness, in combination with President Obama’s proposal to change the unemployment-insurance system, may pave the way to continue paying benefits to those who have been out of work for more than a half-year.
Since mid-2008, the federal government has picked up the tab for an expanded unemployment-insurance program that supplements the 26 weeks of assistance provided by almost all states — and many conservatives are ready for the federal program to end.
Obama won a 13-month extension of it late last year, before Republicans took control of the House, but only in return for his agreement to renew for two years the tax cuts enacted in 2001 and 2003.
Obama’s latest $49 billion proposal to further extend, and to overhaul, the supplemental federal program — a less-discussed part of his jobs legislation — has drawn fire from some conservatives. Yet with the national jobless rate at 9.1 percent and unlikely to fall much in the near term, neither party wants to seem indifferent to the needs of the long-term unemployed.
That is why some top Republican lawmakers and aides say another benefits extension may be in the cards — and an overhaul of the underlying system may be the price. The route to enactment remains unclear, however, and conservatives may require that extended jobless benefits be offset with spending cuts elsewhere.
Still, House Majority Leader
“Most people in America are sympathetic to helping those that cannot find a job because unemployment is so high. I also think most people in America think that you can’t continue unemployment benefits forever,” Cantor told reporters Sept. 12.
Allowing Flexibility
In proposing a one-year extension of the supplemental federal program, Obama suggested giving states and employers the flexibility to protect existing jobs and to find new jobs for the unemployed.
Included in his proposal is a work-sharing plan that would make it possible for companies to keep workers on reduced hours instead of laying them off. The plan also includes a wage insurance provision for workers age 50 and older who lose their jobs and are forced to take positions that pay less. The program would cover half the difference in wages, provided the new job pays less than $50,000 a year. There would also be money to help startup companies and allowances for state-designed pilot programs to reduce joblessness.
One of the most controversial features of the plan is modeled on programs in Georgia and North Carolina that allow unemployed workers to take volunteer work-training positions at businesses while collecting benefits. These programs have proved popular in the states, but critics object that they provide free labor to employers by relying on jobless benefits to compensate employees.
Some labor movement officials also question the effectiveness of these flexible state programs. North Carolina’s unemployment rate was 10.4 percent in August and Georgia’s was 10.2 percent, both higher than the national average.
In a letter to Labor Secretary
Talks on Jobless Aid Include Broader Rewrite
Obama also included provisions that would grant people who take part in the work-training programs the same rights and protections as regular employees.
Bill Samuel, legislative director at the AFL-CIO, said the union is making a strong lobbying push for Obama’s plan to be enacted. “This has to get done,” he said.
Other advocates remain uneasy about the work-training program, however. The Bridge to Work program “would divert unemployment benefits to subsidize employment in low-wage, low-skill jobs,” said George Wentworth, senior attorney at the National Employment Law Project. “There are much more effective and proven models for re-employing the long-term unemployed that promote a greater employer investment in producing good, permanent jobs.”
GOP Proposals
Republicans have indicated that they are open to overhauling the unemployment compensation system. Cantor and House Speaker
“The president’s continued extension of this begs for a response which includes some type of reform of the system to instill some possibility that the beneficiaries of this program can get back to work,” Cantor told reporters. “I am supportive of reforming the system, making sure that we tie any extension to a program that holds more promise for people to get back to work.”
How the Program Works
Under current law, some jobless workers can receive benefits for up to 99 weeks if they remain unemployed for that long, according to an analysis by the Center for Budget and Policy Priorities, a liberal think tank. But the coverage depends on the unemployment rate in a given state and, in some cases, state law.
In almost every state, people who lose their jobs are eligible for up to 26 weeks of “regular” unemployment benefits, although for new claimants the total is 20 weeks in Missouri and South Carolina, and 25 weeks in Arkansas.
If unemployed workers still have not found a job after that time, they can get an additional 34 weeks through a federal emergency program created in 2008, rising as high as 53 extra weeks in states with unemployment rates topping 8.5 percent.
Beyond that, up to 20 additional weeks of benefits are available under a separate “extended benefits” program.”
After supporting supplemental unemployment benefits during the recession, conservatives began demanding during the 111th Congress that continued spending be offset with spending cuts elsewhere. Disputes over such offsets caused supplemental benefits to expire several times in 2009 and 2010 before Congress renewed them. In late 2010, Democrats were able to use the issue as leverage in the fight over extending the 2001 and 2003 tax cuts (PL 107-16, PL 108-27).
With the extra benefits now scheduled to expire Jan. 1, House Republican leaders are faced with their first decision on the program since taking control of the House.
Talks on Jobless Aid Include Broader Rewrite
There have been some regional differences over financing jobless benefits. In some cases, lawmakers who represent states and districts with better job markets have been less willing to foot the bill for the nation’s unemployed. On a more philosophical level, some conservatives oppose further extensions of federal jobless benefits on the ground that the program discourages people from seeking work.
Hatch, whose views reflect those of many conservatives, is up for re-election next year in a state with a jobless rate of 7.6 percent in August — below the national average — and a passionate tea party movement. “Sooner or later, there has to be something that gets people to look for jobs,” Hatch said.
Even so, the persistently high national unemployment rate may mitigate the conservative opposition. Economists and the Congressional Budget Office say unemployment benefits funnel money into the economy more quickly than many other government programs because the recipients spend it immediately on necessities.
And advocates may also find a supporting argument in recent Census data showing that the number of Americans living in poverty is on the rise.
“Unemployment benefits keep people out of poverty and they stabilize the economy by increasing the demand for goods and services,” said a recent memo from the Center for American Progress, a Democratic think tank. “Republican- and Democratic-led Congresses have both provided emergency unemployment benefits when unemployment was high, and extending them has not historically been a partisan issue.”
And while an extension of benefits might run into problems with some conservatives, such a bill would probably garner 60 votes in the Senate, said one Senate GOP aide. It would need only 50 votes if the joint deficit reduction committee included the program in its filibuster-proof package due by Nov. 23.