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Extend jobless benefits

Published November 25, 2012 5:41 pm

L.A. Times • From Tuesday
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Washington's focus on the "fiscal cliff" — a potentially disastrous combination of tax hikes and spending cuts scheduled to go into effect Jan. 1 — has shifted attention away from the biggest problem in the economy, which is the more than 12 million Americans still unemployed.

More than 5 million of them have been sidelined for more than half a year, which means they're no longer receiving unemployment insurance benefits from their state. Instead, many are receiving extended unemployment benefits paid for by the federal government. Unless Congress agrees to renew the program, however, that support will end as well, even before the country reaches the fiscal cliff.

It would be tragic if Congress abandoned the unemployed in order to clip a relative smidgen off the deficit — about $30 billion of a deficit of $1 trillion. According to the most recent federal survey of job vacancies, there were about seven applicants for every two openings. That's an improvement over the worst days of the recession, when the ratio of applicants to openings was more than 10 to 2. But it still means that there aren't nearly enough jobs available to put everyone back to work, especially when you consider the more than 9 million Americans who are either stuck in part-time jobs when they want full-time work, or who've become so discouraged they've dropped out of the workforce.

Nevertheless, Republicans and Democrats have battled for more than two years over how to offset the cost of the benefits, and more recently whether to continue funding them at all.

There's a legitimate debate to be had over whether the country should continue borrowing money to pay for unemployment benefits, considering that we're three years into the economic recovery. But the usual argument for cutting off benefits — that it will give unemployed workers more incentive just to take a job rather than waiting to find one that matches their skills — is risible when there aren't enough jobs to take.

Acknowledging that the economy is improving, albeit slowly, Congress has already slashed the duration of federal benefits by 30 percent for the average state, cutting the cost of the program roughly in half. Lawmakers also created tiers of benefits, allowing job-seekers in states with higher unemployment rates to remain eligible for longer periods. That's a sensible approach that gradually steps down the aid as the employment situation improves.

On Dec. 29, however, there will be no phase-out. The federal Emergency Unemployment Compensation program will simply end, immediately cutting off benefits to more than 2 million Americans, the Labor Department estimates. By economist Mark Zandi's projections, the failure to renew the program will cost almost twice as much in lost economic growth due to the reduction in consumer spending. It's a mistake that's both cruel and unaffordable, and Congress shouldn't make it.




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