Unemployment benefits and the budget deal
Share Now on:
The question of whether to renew unemployment benefits for more than one million Americans has surfaced as part of federal budget negotiations.
The benefits, meant to be temporary, have been extended repeatedly, most recently through Dec. 28.
“If we allow these extensions to expire, it’s going to cause a lot more pain for Americans,” says Elise Gould, an economist at the Economic Policy Institute. She says the whole economy would take a hit if the unemployment benefits aren’t extended because unemployment checks are spent right away.
A former head of the Congressional Budget Office, Robert Reischauer agrees.
“The money comes in and it goes out very rapidly for food, clothing, gas for the car and so on,” he says.
That money ripples through the economy, and the White House argues that without that spending, 240,000 jobs will be lost next year.
It adds up to make a tough vote in Congress, says Douglas Holtz-Eakin, another former Congressional Budget Office director and an economic adviser for Senator John McCain’s 2008 presidential campaign.
“When push comes to shove, saying I’m not willing to fund the unemployment insurance for those who have been out of work for two years — pretty tough vote to take,” he says.
Or, as Reischauer puts it: “They certainly don’t want to be Scrooge in the middle of the holiday season.”
Because tales of the hardships of those denied benefits could haunt re-election campaigns like the ghost of Christmas past.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.