In The News: GOP Threatens Extended Unemployment Insurance—Again, and More Intensely

clee February 14, 2012 0

GOP Threatens Extended Unemployment Insurance—Again, and More Intensely

But at least cruel proposed measures are consistent


Despite the recent good news—the unemployment rate and new jobless claims are down, economic and job growth are up, the nation’s 12.8 million unemployed people face two threats from Congress in the next couple of weeks.

First, the House-Senate conference committee may simply fail to reach agreement on full-year renewal of federal extensions of unemployment insurance—along with a continuation of payroll tax deductions, provisions to avoid a cut in doctors’ reimbursement under Medicare, and a means of offsetting the costs of those policies.

If there is no agreement by the end of the month, roughly 4.5 million long-term unemployed people could lose their modest partial income replacement between March and June. And the still fragile but budding economic recovery would lose one of its most effective supports. “If we don’t renew this extension, nearly 5 million people in this country will lose their last lifeline,” says Rep. Sander Levin (D-Mich.). “We have to act.”

The second threat—almost as bad—is that Congress could approve renewal of extended unemployment with many of the provisions in the House Republican bill, a package of punitive restraints and barriers that the nonprofit National Employment Law Project (NELP) calls “ill-advised and cruel.”

To head off both threats, NELP, USAction and allies are protesting at key Republican politicians’ home offices Friday against their attempt to use unemployment insurance to “blame the unemployed,” USAction strategy director Alan Charney said, not help the jobless or the economy. The protestors will carry shoes (asking politicians to walk in the shoes of the unemployed), red tape (objecting to the new barriers to aid), and hula hoops (symbolizing the hoops Republican policies would force the jobless to jump through).

Overall, says NELP director Christine Owens, Republican plans “would slash benefits in half, hitting hardest the states with the highest unemployment.” Currently, depending on the state unemployment rate, the long-term unemployed—now about 43 percent of all those officially unemployed—can receive benefits up to 99 weeks. Republicans would cut that to 59 weeks; Obama had proposed 79 weeks, and Congressional Democrats offered Thursday to cut the maximum to 93 weeks.

But the “reforms” pushed by Republicans would undermine the foundation of the nation’s wage insurance program for the unemployed, chipping away at policies that now work well, creating “solutions” for problems that don’t exist, and greatly exacerbating existing weaknesses (such as low rates of wage replacement and coverage of only about 40 percent of the jobless in normal times).

For example, Republicans would subject all workers who involuntarily lose their jobs to drug tests. As NELP reports, this measure—like many other Republican proposals—sets new, restrictive conditions for a statutory universal insurance program. It would unjustifiably stigmatize all unemployed workers, possibly hurting their chances for re-employment (especially since many employers already discriminate against the unemployed in hiring), cost state governments mightily, and offer redundant, irrelevant barriers (many states already restrict benefits for workers who lose jobs because of drug use, and many employers test new hires for drugs—even though those policies are deeply flawed).

Republicans would bar unemployment insurance to anyone without a high school or GED equivalent diploma unless he or she is actively pursuing such certification. Beyond violating the program’s role as social insurance, harming roughly 14 percent of UI applicants who are mainly very low-wage, vulnerable and relatively old (about half of UI claimants without a high school diploma are over 45), this unfunded mandate for adult education would add to state financial problems.

Republicans also want to grant states waivers to use UI funds for purposes other than paying UI benefits, supposedly to speed re-employment (though research shows workers receiving benefits are more active in searching for jobs than those who don’t). Beyond undermining and providing states a means to “raid” the insurance system, NELP says, the provision is not needed—states have considerable flexibility already, and many state programs of active assistance speed re-hiring of the unemployed.

The congressional action simply feeds into state-level “ongoing attacks on UI” and promotion of “abusive and ineffective so-called ‘reemployment’ programs,” according to NELP.

In the guise of preventing millionaires from receiving unemployment insurance, Republicans open the door to means-testing of insurance recipients. But millionaires are hardly a drain on UI funds. They received 0.015 percent of UI payouts in 2009. But leave it to Republicans to kick a guy when he’s down: They refuse to consider taxing millionaires when they’re making money and only want to take something away when hardship hits.

And in a related move, Republicans say they want to provide expanded employment services—but the cost would be deducted from people’s meager unemployment checks (averaging $296 a week now).

Finally, unlike past recessions, Republicans insist on offsetting the cost of extended UI, thus undercutting its stimulative effect. Worse, they want to finance the program by continuing to freeze federal workers’ pay. They adamantly reject Democrats’ plan for a small surtax on millionaires. The Republican funding alternative may be cruelly unfair and economically stupid, but at least when viewed in the context of the party’s overall unemployment proposal, it is consistent.–again_and_moreso/

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