The failure of the Super Committee last week has tripped a deadline for unemployment benefits. The benefits are set to expire in 32 days on December 31st unless Congress extends them. If the benefits are not extended, 2.2 million Americans will lose their assistance in February 2012.
Though President Obama is challenging Congressional Republicans to renew the payroll tax cut which is also set to expire on the last day of the year, he has not yet mentioned unemployment insurance. Here we go again: The President’s deal with Congressional Republicans led by Sens. Mitch McConnell (R-KY) and Jon Kyl (R-AZ) in December 2010 extended unemployment and the Bush tax cuts.
President Obama is scheduled to speak on the payroll tax cut on Wednesday in Scranton, PA. Whether he will mention unemployment benefits is unknown. The Senate is due to take up the payroll tax cut this week.
The unemployment rate is 9%. An estimated 14 million Americans are unemployed. The Black unemployment rate reached a 27 year high of 16.7% in August. It is now 15.1%.
The Bush tax cuts were extended for two years and the unemployment benefits were extended for one. The Bush tax cuts cost $800 billion for two years and was unpaid for. Another unemployment extension would cost $50 billion.
In what may shape the debate to come, GOP Presidential candidate Herman Cain came out against extending unemployment benefits asking, “No, where do we stop?”
“Extending unemployment benefits, extending the cut in the payroll tax are just distractions from the bigger problem, which is lack of economic growth which has not been there. Secondly, we’re spending money we do not have,” Cain added.
Cain’s views are similar to those expressed by Sen. Jim DeMint (R-SC) on September 4. DeMint said, “we have to realize we have a lot of people gaming the system” regarding unemployment benefits. DeMint, a Tea Party favorite, also said, “We have to have unemployment but the longer you make it the more perverse incentives you create. I’ve talked to a lot of businesses in South Carolina who can’t get employees to come back to work because they’re getting unemployment and they’re getting food stamps and they say call me when the unemployment runs out.”
Democratic Reps. Barbara Lee (D-CA) and Sander Levin (D-MI) promise a fight for unemployment benefits when Congress returns. Levin has already offered legislation, H.R. 3346, to extend unemployment through 2012. A rally on Capitol Hill is planned for this week.
Lee’s legislation, H.R. 589, would extend unemployment to those who have exhausted it by 14 weeks. This group, known as the “99ers” have already run out of benefits which, in most states, is 99 weeks. Lee has been in conversations with the White House on the issue through Gene Sperling, who is Assistant to President Obama on Economic Policy. Her legislation costs $16 billion.
In October, the number of long-term unemployed who’ve been out of work for 27 weeks+ was 5.9 million, or 42% of total unemployment.
“When you run out of unemployment benefits after 99 weeks that’s it,” Rep. Barbara Lee said on the House floor on November 17. “The number of job seekers have run out of unemployment benefits than those receiving them,” Lee said. “Extending benefits for the 99ers is the right thing to do for millions of Americans who were laid off through no fault of their own. They watched as corporations took over their government and ran the economy into the ground. They watched as the banks raided the nation’s treasury as millions of Americans lost their jobs,” Lee said.