Extending Unemployment Benefits?

Yesterday the Senate moved to debate the extension of emergency unemployment benefits with the help of six Senate Republicans.

Six Republican Senators voted with the Democrats to move the Senate bill that extends so-called emergency unemployment benefits to the floor for debate. Of the six, at least one has said that she won’t vote for cloture on the floor of the Senate so the bill can move beyond debate unless the benefits are paid for with cuts elsewhere.

The unemployment benefits are federal benefits that take the states typical 26 weeks of benefits to 99 weeks. This program is an extension of the state programs and was put in place at the start of the recession, which the administration insists has been over for almost four years.

If the bill gets out of the Senate, there’s a real question whether the bill will see the light of day in the House. The problem in the House is John Boehner who may be willing to vote on the bill if they can cob together some sort of “savings” or “job creation” to offset the $25 billion cost of this bill. As you surely know, spending always seems to happen now and the savings that offset the spending happen in five years. In Washington anything that extends beyond “now” for savings will never happen.

The bigger question is whether the bill should pass because the extended benefits actually work against putting people back to work, the ability to collect for two years keeps people on the couch and out of the workforce.

Unemployment insurance extensions in the past five years have kept at least 600,000 people out of the labor force, because people tend to ride a gravy train. That’s the conclusion of analyses by the Federal Reserve Bank of San Francisco and the National Bureau of Economic Research, respectively. The evidence is clear: Another extension of unemployment insurance would do more harm than good.

Even the recently departed chairman of the White House Council of Economic Advisers, Alan Krueger, once understood the perverse incentives at play. Before working for the Obama administration, two of Krueger’s own analyses revealed that paying people not to work actually increases the incentive not to work. And that means more time spent unemployed.

The Federal Reserve thinks that unemployment benefits should not be extended because they understand the perverse logic of paying people not to work. Even people on Obama’s team – appropriately enough “departed” team members – can understand that.

On the other side, you’ve got Democrats like Harry Reid who are insisting the benefits be extended and that the extension shouldn’t have to be “paid for” in any way. Keep in mind that he supported, and the President signed without a discouraging word, the budget bill that stopped the benefit program.

What’s really going on here is that the President, and Democrats up for reelection are desperate to get ObamaCare out of the news cycle and they’re ramping up class warfare to make that happen.

You can expect to see a steady stream of class warfare topics, from universal pre-K programs that are proven not to work to daily arguments about the evils of income inequality. No one seems to be willing to call out the guy who just spent $4 million plus on a 17 day Hawaiian vacation – and then extended it for his wife’s birthday present – for extreme hypocrisy about the argument, but we will.

This isn’t about the “unemployed”. Democrats don’t give a damn about them. If they did, they’d have been pursuing real programs that produce private sector jobs over the last five years. Instead, they’ve been producing tens of thousands of pages of new job killing regulations and buying off their indolent base with 99 weeks of paltry unemployment benefits.

Speaker Boehner, just say no. And say it in stronger terms that we’re going to publish right now.

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