Unemployment benefits paid to the unemployed have to end sometime — or do they?
A disappointing jobs report for December has helped frame the debate on Capitol Hill about whether Congress should, again, extend unemployment benefits to 1.3 million long-term unemployed.
The U.S. Labor Department reported that just 74,000 jobs were created in December, a dramatic decline from the average of 214,000 jobs created during the previous four months.
Ironically, in the face of that surprisingly low December number, the national unemployment rate declined from 7 percent to 6.7 percent. But that number is misleading because the labor department does not count the millions of people who have become so discouraged that they have stopped looking for work. If it did, the national unemployment rate would exceed 10 percent.
It is in the context of the painfully slow economic recovery that Democrats and Republicans are at odds over another three-month extension of federal unemployment benefits to the estimated 1.3 million people whose state unemployment benefits have expired.
Democrats want to appropriate $6.4 billion to cover the extension without making commensurate cuts in other spending to balance out the cost. What they are effectively proposing is more borrowing to pay for the unemployment extension. Republicans are prepared to extend the unemployment benefits, but prefer to cut spending elsewhere to pay for it. Eventually, they will work out their differences.
But the debate has a political subtext in which the Democrats are characterizing their Republican counterparts as heartless for raising questions about how the extension should be funded and whether it should be funded at all.
Many people probably agree that the benefits should be extended — no questions asked — based on humanitarian concerns.
But how many people would agree that unemployment benefits should have no limit? How many people would agree that terminating unemployment benefits at up to 73 weeks (26 weeks in the states and up to another 47 at the federal level) is heartless and cruel?
There's more involved here than just the issue of extending unemployment benefits.
Should the U.S. follow the European example of placing people permanently on the dole, essentially making a permanent welfare program out of what was initially intended to be a limited period of assistance to help tide people over between jobs? Is that even affordable in an era when the federal government has to add to the budget deficit or cut elsewhere to continue to pay benefits to the unemployed?
Of course, we wouldn't need to have this conversation if the slow economic recovery would gain the speed of Reagan and Clinton recoveries in the early 1980s and early 1990s. Hope springs eternal, and there are signs that things are picking up. But until they do, this debate will continue.