Obama wants jobless benefit extension
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Kai Ryssdal: And about the easiest way to describe the economic news from the White House today is like this: President Obama is sick and tired and he is not going to take it anymore. Mr. Obama used the Rose Garden to full political advantage this morning, taking on Republicans in the Senate, who are against extending unemployment benefits.
President Barack Obama: After years of championing policies that turned a record surplus into a massive deficit, the same people who didn’t have any problem spending hundreds of billions of dollars on tax breaks for the wealthiest Americans are now saying we shouldn’t offer relief to middle-class Americans who really need help.
Republicans have their own take on the debate, of course — that it’s not about extending those benefits but rather finding a way to pay for it. About the only thing the two parties agree on, publicly anyway, is that they’d like the economy to get better.
We asked Marketplace’s Jeff Tyler how effective unemployment benefits are as a kind of mini-stimulus.
Jeff Tyler: In terms of stimulating the economy, unemployment benefits are about as good as it gets, so says Silvia Allegretto, an economist with the Institute for Research on Labor and Employment at UC Berkeley.
Silvia Allegretto: As far as a bang-for-the-buck measure, extending unemployment benefits is one of the most efficient spending increases that the government could pass.
Most economists agree, including Josh Bivens at the Economic Policy Institute.
Josh Bivens: It’s money that gets spent right back in the economy, right away. It is going, by definition, to very cash-strapped people and that’s what makes for effective fiscal stimulus — money that is put back in the economy right away.
Some states need the money more than others. In Nevada, for example, the unemployment rate is now above 14 percent. Silvia Allegretto says states like California and Ohio would also benefit.
Allegretto: It’s targeted to unemployed people. So in states and cities where you have higher rates of unemployment, more monies go to those areas.
Republicans argue against anything that will add to the federal deficit. But economist Bivens says extending unemployment benefits is a short-term liability.
Bivens: It’s temporary. These things go away when the economy improves.
He says tax cuts, and especially corporate tax breaks, have proven less useful in stimulating the economy. The Senate will vote on an extension for unemployment benefits tomorrow.
I’m Jeff Tyler for Marketplace.
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