Saturday, December 28, 2013

GOP Just Lost their Last Hostage

Military personnel and those on food stamps have already been screwed. Whereas, the retirees and the disabled have been temporarily spared for two more years in the last budget deal. So with the long-term unemployed being screwed (starting today), the GOP has lost the last of their hostages.

At its peak, the federal extended unemployment program offered up to 99 weeks of coverage to the long-term unemployed (known as the 99ers).

Republicans have insisted that additional unemployment benefits be paid for out of existing funds. This is a departure from how unemployment benefits have been funded in the past. But yet, in December 2010 the Republicans had agreed to extend the program for one year, but only in exchange for also extending the Bush Tax Cuts for the wealthy (like the tax rates on capital gains) for two more years. As usual, just like now, it had been called a "compromise" (jobless benefits for the poor in exchange for tax cuts for the rich.)

But the federal extended unemployment program has been gradually scaled down ever since September 2011. Over the past two years, the average maximum weeks of available benefits has dropped from 85 to 54, or 36 percent, according to Congressional Research Service data.

Now the program is being eliminated altogether. According to a report from the White House Council of Economic Advisors and the Labor Department: "In no prior case has Congress allowed special extended benefits to expire when the unemployment rate was as high as it is today."

All federal extended unemployment benefits expire today, so anyone who is out of work (in all states) will only receive up to 26 weeks of regular State benefits (the exception being, 20 weeks in North Carolina).

Republicans have advanced arguments for not extending UI benefits:

  1. Extended unemployment benefits was only supposed to be temporary and because unemployment has dropped to 7%, it's time to go back to 26 weeks (even though the true measure of unemployment is much higher).
  2. Extending benefits for an additional year would cost roughly $25 billion which would add to the federal deficit (but they will continue to subsidize corporations like big oil and not eliminate any corporate tax loopholes).
  3. Extended unemployment benefits provide a crutch that discourages people from looking for work (which has been proven to be false by the Fed and other economists).

Democrats, on the other hand, have advanced arguments for extending UI benefits:

  1. Of the still counted, long-term unemployment still remains as bad today as it was at the peak of long-term unemployment in any previous recession since the end of World War II.
  2. Jobs still remain hard to find (using the broader measure of unemployment, counting all the previous "discouraged workers", the US has one job opening for every 6 out of work who want a job.)
  3. There's evidence that companies discriminate against people who have been out of work for longer than 6 months, or over 50 years old.
  4. By injecting money into the economy, unemployment benefits spur growth as recipients buy goods and services.

Currently Nevada, Illinois, California, Pennsylvania, Connecticut, New York, New Jersey and Massachusetts are among the states with significantly higher-than-average percentages of long-term unemployed people.

The L.A. Times reports that two of these states with the highest unemployment (Illinois and Nevada) had once offered 73 weeks of benefits and California had offered 63 weeks. Most of the other states offered 43 to 63 weeks --- whereas, states like Virginia, Vermont, New Hampshire and a group of Great Plains and Mountain states (several of which have relatively low unemployment because of the boom in oil and natural gas production) had offered 40 to 42 weeks of extended unemployment benefits.

Republicans have said that in the event of "man-made" human disasters (like high unemployment) any extension of unemployment benefits should be paid for so that they don’t add to the federal deficit --- but when a "natural" disaster hits their state, they are the first ones in line for a government hand out.

Senator Jack Reed (D-R.I.) has written up a three-month extension with Republican Sen. Dean Heller of Nevada, which Senate Majority Leader Harry Reid has said will get a vote as soon as the Senate returns in early January.

On The Last Word with Lawrence O'Donnell, Roosevelt Institute Fellow Dorian Warren decries the political viewpoint that casts the unemployed as too lazy and undeserving of aid. He notes that ending long-term unemployment insurance will put government support for the unemployed at its lowest level since 1950.

Too many politicians in Washington have abandoned the long-term unemployed, and worse, they've justified doing so in callous and empirically indefensible terms. Example one? Rand Paul.

Senator Rand Paul says that, "The longer they're unemployed, the less likely they are to ever get a job again." --- which is true --- but it sounded as if he said, "They're already screwed, so why bother?"

Ezra Klein (at the Washington Post) suggests that the long-term unemployed have grounds to complain, because Washington isn't doing enough to help them find work. There just aren't enough jobs to go around, so cutting off benefits isn't going to solve anything, despite what Senator Paul says.

Rand Paul: "There was a study that came out a few months ago, and it said, if you have a worker that's been unemployed for four weeks and on unemployment insurance and one that's on 99 weeks, which would you hire? Every employer, nearly 100 percent, said they will always hire the person who's been out of work four weeks."

Ezra Klein: "Imagine a study that asked doctors whether they thought a patient who'd been under treatment for a serious illness for four weeks was more or less likely to survive than a patient under treatment for a serious illness for 99 weeks. Of course the doctors would say the patient under treatment for 99 weeks was less likely to survive. Paul would look at that study and argue for removing the treatment from the patient who'd been sick for 99 weeks. After all, doctors thought it made the patient less likely to survive!"

And Rand Paul never went on to explain why those who never qualified for unemployment benefits (about 2/3 of the unemployed) are also not finding work.

Klein goes on to say that, the reality is that most people who've been unemployed for more than 26 weeks live in areas where there are four, five, six, seven and even eight job seekers for each open job. They're not being held back by their unemployment checks. They're being held back by mass unemployment.

Last month, D.C.'s two new Walmarts began accepting applications. More than 23,000 people applied for fewer than 600 jobs. This is the reality of life for the unemployed: They can't get jobs because there aren't enough jobs.

The study Paul mentioned points toward the real problem: Unemployment is self-perpetuating. Employers discriminate against the long-term unemployed. And so a cycle begins: Someone doesn't get hired because they're unemployed. That extends the length of their unemployment. That makes the next potential employer that much less likely to hire them. That further extends the time they've been unemployed. And so the cycle continues.

According to Klein, Rand Ghayad, a scholar for the Federal Reserve Bank of Boston, says the callback rate for the long-term unemployed [over 6 months] was just 1 to 3 percent. For the newly unemployed [less than 6 months] it was 9 to 16 percent. And as I noted in an earlier post, even for those who are still working, only about 10 percent of people who are currently employed can get a job interview.

The vast majority of almost 24 million long-term unemployed Americans (who received extended unemployment benefits over the past 6 years) have already exhausted all their benefits --- and most have not only remained unemployed, but are also no longer counted in any measure of the unemployment rate either (about 48 million, not 11 million as has been reported.)

Several polls show that the majority of American voters believe that unemployment benefits should be extended, and would be less likely to support their member of Congress for re-election if the lawmaker opposed extending benefits. But members of Congress don't pay attention to polls like they do their campaign contributors and corporate lobbyists.

We can now say good bye to any more "shared sacrifices", because with the long-term unemployed, the GOP has lost the last of their hostages (unless you count the entire government when it's time to pay the bills again). Otherwise, who's left? Oh yeah ---- single moms with little children on welfare. They will be the GOP's next target.

Oops! Did I say "hostages" for the GOP? Maybe I should have said they were "Martyrs" for the Democrats.


  1. House Speaker John Boehner, R-Ohio:

    “I said we would clearly consider it, as long as it was paid for and as long as there are other efforts that will help get our economy going once again. I have not seen a plan from the White House that meets those standards," he said before Congress left town earlier this month.

    How many jobs bills has the GOP passed in the House since...

  2. Saint Ayn Rand visits the day after Christmas!

    'Twas the day after Christmas, through the Senate and House.
    Salvation was coming, for every jobless louse.

    The cuts were all hung, by the chimney with care,
    In hopes that Saint Ayn soon would be there.

    The jobless were nestled, all snug in their beds,
    While visions of moochers danced in their heads.

    Rand Paul in his bootstraps and Cruz in his cap,
    Had settled the matter, it's really a snap.

    See the poor have too much, the jobless are lazy!
    If we give them much less, they'll get hired like crazy!

    Food stamps as well, we'll chop them right up!
    And if they really must eat, let them pee in a cup!

    Paul Ryan'll boot them, four million strong.
    Sure, Sequester was eased, 'til the next cliff comes along!

    But why stop with food stamps and checks unemployment?
    We'll cut down the moochers for our own enjoyment!

    As long as we leave defense and farm payouts,
    We'll cut it all else, damn lazy lay'bouts!

    With a little old lady, scowling so fine,
    I knew in a moment it must be Saint Ayn.

    And we all called together, our thoughts as they came.
    More cuts, chops and clips, and we called them by name!

    Now Social Security! Now Medicare! And that Socialist brew!

    On Head Start! On Science! On Obamacare, too!

    To the top of the porch, to the top of the wall!
    Now chop away! Chop away! Chop away, all!


    Animated video here:

  3. I consider Rand Paul a congressional circus clown, but in no way do I want to insult real, hard working circus clowns!