Dems Pressuring GOP to Extend Unemployment Insurance Again

Rep. Sander Levin (D-Mich.), ranking member on the House Ways and Means Committee, called the proposed extension “a jobs issue, plain and simple.”

“The Great Recession was deeper and longer than any economic downturn in the last 70 years and millions of Americans rely on federal unemployment insurance to stay afloat as they continue to look for work,” Levin said. “While our economy has made enormous progress, the severity of the recession continues to ripple throughout our nation and we must maintain this vital insurance for the long-term unemployed.”

The proposed extension through 2014 carries the support of the White House. Gene Sperling, director of the National Economic Council and assistant to President Obama for economic policy, told those attending the Washington Ideas Forum recently that "with an unemployment rate of 7.3 percent we need to raise the emergency unemployment insurance and push for extensions to 2014."

But conservatives who control the House and can block legislation in the Senate have traditionally proved less enthusiastic about extending federal benefits. A 2008 report from the Heritage Foundation determined that very few studies support the idea that extending unemployment benefits significantly stimulates the economy. The report also found that the system encourages unemployed workers to stay out of work longer, leads employers to wait longer to rehire laid-off workers and does little to increase consumption.

That finding conflicts somewhat with the Economic Policy Institute, which determined that if unemployment benefits aren't extended through 2014 the economy will lose 310,000 jobs that would have otherwise been generated through spending.

Sarah Ayres, an analyst in the economic policy department at the Center for American Progress, said federal cuts have already dramatically reduced the amount of unemployment benefits available to workers.

In 2012, Ayres said, Congress cut the number of weeks of federal unemployment benefits available to all states and raised the unemployment-rate threshold at which states can receive maximum benefits. Now, federal unemployment benefits in every state are significantly less generous than in the recent past.

Only one-third of the nation’s long-term unemployed workers are receiving federal benefits. Should Congress allow emergency unemployment compensation to expire, that number would drop to one-fourth. In addition, sequestration has resulted in a decrease in the weekly benefit amount. The average worker now collects just $269 per week, compared to $296 last year.