Bipartisan Miracle? Senate Republicans Open to Unemployment Extension

Senate Finance Committee Ranking Member Orrin Hatch (R-UT) speaks during a hearing on health insurance exchanges on November 6, 2013 in the Dirksen Senate Office on Capitol Hill in Washington, DC. 
National Journal
Fawn Johnson
See more stories about...
Fawn Johnson
Dec. 17, 2013, 2:40 p.m.

Sen­ate Re­pub­lic­ans are will­ing to dis­cuss an ex­ten­sion of long-term un­em­ploy­ment be­ne­fits early next year, as long as it is paid for, sev­er­al of them told Na­tion­al Journ­al on Tues­day.

Their will­ing­ness to en­gage on the top­ic sig­nals that un­em­ploy­ment be­ne­fits could be­come a do­mest­ic policy rar­ity — a safety-net is­sue that isn’t auto­mat­ic­ally mired in a polit­ic­al shout­ing match. But any ser­i­ous ne­go­ti­ations would re­quire law­makers on both sides of the aisle to cal­cu­late the pluses and minuses of un­em­ploy­ment be­ne­fits for the eco­nomy and wheth­er it’s ap­pro­pri­ate to off­set the cost.

That con­ver­sa­tion has yet to hap­pen. Some Sen­ate Re­pub­lic­ans seem will­ing, even eager, to have it.

“I don’t want to leave people hurt­ing,” said Sen. Or­rin Hatch, R-Utah, who ad­ded that Sen­ate Re­pub­lic­ans didn’t even have a chance to con­sider un­em­ploy­ment as part of the budget deal that passed the House last week. That deal is ex­pec­ted to pass the Sen­ate as early as Wed­nes­day.

Sen. Bob Cork­er, R-Tenn., echoed Hatch’s frus­tra­tion. Un­em­ploy­ment be­ne­fits “wer­en’t a part of this le­gis­la­tion, so it’s kind of hard to say what we would do,” he said. “What is it coupled with? How is it paid for? Are there re­forms in how it’s be­ing ad­min­istered?”

Without con­gres­sion­al ac­tion, un­em­ploy­ment be­ne­fits for long-term un­em­ployed people will ex­pire on Dec. 28. Sen­ate Ma­jor­ity Lead­er Harry Re­id, D-Nev., has pledged to bring a ret­ro­act­ive un­em­ploy­ment ex­ten­sion to the Sen­ate floor as one of the first or­ders of busi­ness when mem­bers re­turn in early Janu­ary. He wants the be­ne­fits to con­tin­ue for an­oth­er year, at a cost of $25 bil­lion over 10 years.

Re­id’s pro­pos­al, which has no off­set, will not fly among Re­pub­lic­ans.

“I can’t jus­ti­fy adding $25 bil­lion more to the de­fi­cit,” said Sen­ate Minor­ity Whip John Cornyn, R-Texas.

But that doesn’t mean oth­er op­tions aren’t avail­able. What if the ex­ten­sion is fully paid for? “That would be a start,” Cornyn said. “The way I un­der­stand the eco­nom­ics of this is, you can raise wages on some work­ers, and you can put oth­er people out of work.”

Cornyn is hint­ing at a school of thought among some eco­nom­ists that says em­ploy­ers are less likely to cre­ate job open­ings when they know that eli­gible work­ers have ac­cess to un­em­ploy­ment. First, they have to pay those work­ers con­sid­er­ably more than their weekly un­em­ploy­ment rate. Second, if they have to lay them off, their tax rates go up.

Demo­crats will have to con­tend with these ar­gu­ments when they pro­pose ex­tend­ing be­ne­fits for the long-term un­em­ployed next year. They can say that the Con­gres­sion­al Budget Of­fice pro­jects a net boon for the eco­nomy, even with the neg­at­ive im­pact of some people re­main­ing un­em­ployed for longer.

But CBO num­bers are cold com­fort for most Demo­crats. They plan, ini­tially, to go with the more emo­tion­al ar­gu­ments about the hu­man side of the story, de­scrib­ing in de­tail the 1.3 mil­lion people who are out of work and will sud­denly have no safety net, to make Re­pub­lic­ans squirm.

“When the real­ity of what the fail­ure to ex­tend means, we’ll have more of a fo­cus on it than we do now,” said Sen. Ben Cardin, D-Md., a long­time cham­pi­on of un­em­ploy­ment be­ne­fits.

Re­pub­lic­ans may in fact squirm about the plight of the un­em­ployed, par­tic­u­larly from their own con­stitu­ents. But they won’t be­gin any talks about be­ne­fits un­less Demo­crats show that they are will­ing to find a way to pay for the ex­ten­sion. That’s a high open­ing bid, and Demo­crat­ic lead­ers fear the de­mand for off­sets could sink the ne­go­ti­ations be­fore they even be­gin.

“That al­most makes it im­possible,” said Sen­ate Ma­jor­ity Whip Dick Durbin, D-Ill. “It’s so much money. Twenty-five bil­lion. And when I look at what we just went through with this budget agree­ment, it was not an easy lift.”¦ They won’t go to tax loop­holes.”¦ They say, ‘Let’s go to the en­ti­tle­ments,’ and we’re not go­ing to do that.”

Non­ethe­less, Durbin in­dic­ated that Demo­crats would be will­ing to off­set the un­em­ploy­ment ex­ten­sion if they knew Re­pub­lic­ans would ac­cept the deal.

Oth­er Demo­crats, such as Cardin, are wary of set­ting that pre­ced­ent. Al­most all of the long-term un­em­ploy­ment be­ne­fits that passed by Con­gress in the last 10 years have not been off­set be­cause they were con­sidered a net be­ne­fit to the eco­nomy. The ex­cep­tion was in 2009, when the eco­nom­ic-stim­u­lus pack­age in­cluded ex­ten­ded be­ne­fits for the long-term un­em­ployed that were fully paid for. The same ex­ten­sion was re­upped in 2011 and in 2012.

Cardin said those off­sets were a mis­take. “It should not be off­set,” he said. “It’s plug­ging in to the eco­nomy.”

What We're Following See More »
‘PRESUMPTIVE NOMINEE’
Priebus Asks Party to Unite Behind Trump
7 hours ago
THE LATEST
FEELING THE MIDWESTERN BERN
Sanders Upsets Clinton in Indiana
8 hours ago
THE LATEST

Despite trailing Hillary Clinton by a significant margin, Bernie Sanders wasn't going the way of Ted Cruz tonight. The Vermont senator upset Clinton in Indiana, with MSNBC calling the race at 9pm. Sanders appears poised to win by a five- or six-point spread.

Source:
TRUMP IS PRESUMPTIVE NOMINEE
Ted Cruz Bows Out, Effectively Ceding the Contest to Trump
9 hours ago
THE LATEST

And just like that, it's over. Ted Cruz will suspend his presidential campaign after losing badly to Donald Trump in Indiana tonight. "While Cruz had always hedged when asked whether he would quit if he lost Indiana; his campaign had laid a huge bet on the state." John Kasich's campaign has pledged to carry on. “From the beginning, I’ve said that I would continue on as long as there was a viable path to victory,” said Cruz. “Tonight, I’m sorry to say it appears that path has been foreclosed."

Source:
TAKES AT LEAST 45 DELEGATES
Trump Wins Indiana, All but Seals the Nomination
9 hours ago
THE LATEST

The Republican establishment's last remaining hope—a contested convention this summer—may have just ended in Indiana, as Donald Trump won a decisive victory over Ted Cruz. Nothing Cruz seemed to have in his corner seemed to help—not a presumptive VP pick in Carly Fiorina, not a midwestern state where he's done well in the past, and not the state's legions of conservatives. Though Trump "won't secure the 1,237 delegates he needs to formally claim the nomination until June, his Indiana triumph makes it almost impossible to stop him. Following his decisive wins in New York and other East Coast states, the Indiana victory could put Trump within 200 delegates of the magic number he needs to clinch the nomination." Cruz, meanwhile, "now faces the agonizing choice of whether to remain in the race, with his attempt to force the party into a contested convention in tatters, or to bow out and cede the party nomination to his political nemesis." The Associated Press, which called the race at 7pm, predicts Trump will win at least 45 delegates.

Source:
THE QUESTION
What’s the Average Household Income of a Trump Voter?
14 hours ago
THE ANSWER

Seventy-two thousand dollars, according to FiveThirtyEight. That's higher than the national average, as well as the average Clinton or Sanders voter, but lower than the average Kasich voter.

Source:
×