Raising the Debt Ceiling

Unemployment benefits and the budget deal

Nancy Marshall-Genzer Dec 6, 2013
HTML EMBED:
COPY
Raising the Debt Ceiling

Unemployment benefits and the budget deal

Nancy Marshall-Genzer Dec 6, 2013
HTML EMBED:
COPY

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.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.