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
Add to Briefcase
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 »
PLANS TO CURB ITS POWER
Pruitt Confirmed As EPA Head
2 days ago
BREAKING
WOULD HAVE REPLACED FLYNN
Harward Turns Down NSC Job
2 days ago
THE LATEST

"Ret. Vice Adm. Bob Harward turned down President Donald Trump's offer to be national security adviser Thursday, depriving the administration of a top candidate for a critical foreign policy post days after Trump fired Michael Flynn." Among the potential reasons: his family, his lack of assurances that he could build his own team, and that "the White House seems so chaotic."

Source:
REVERSES OBAMA RULE
House Votes to Let States Block Planned Parenthood Funds
3 days ago
THE LATEST

"The House passed a resolution Thursday re-opening the door for states to block Planned Parenthood from receiving some federal funds. The measure, which passed 230-188, would reverse a last-minute rule from the Obama administration that said conservative states can't block the women's health and abortion provider from receiving family planning dollars under the Title X program."

Source:
FORMER PROSECUTOR
Alexander Acosta to Get Nod for Labor
3 days ago
THE LATEST
12:30 PRESS CONFERENCE
New Labor Secretary Announcement Coming
3 days ago
BREAKING
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login