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Congress Has Really Dropped The Ball On Its Most Pressing Concern (P.S. Not Healthcare)
There are currently over 4.5 million people on Emergency Unemployment Compensation, the program that was formed (and repeatedly extended) because of our historical downturn and joblessness. That act is set to expire on January 1, 2010.
Unemployment insurance is complex at this point. The first 26 weeks goes under the traditional state unemployment, after that there are various emergency Federal programs that have different tiers that last different amounts of time. Some programs are available in some states and not others, based on the unemployment rate.
Once the program expires, people that are locked into a tier will receive benefits but no one can move on to the next tier. This will create a weird situation where there will be many people that have been out of work relatively briefly (26 weeks if it ends after the new year) that will get cut off, while some people will have received benefits for nearly two years and continue. In either case, joblessness is still systemic and even in a best case scenario there will be several more years before the bulk of the unemployed can find work. In addition, we’re going to see another large spike in layoffs in the first month of the year, over 3.5 million to be precise, and I’m not optimistic that most of those people will get picked up again for a while; plus they will be competing with the 9.5+ million that are currently on the unemployment insurance rolls.
The end result is that close to one million people are projected to have their uninsurance run out during January, with three million by March. The House put an extension into the recently passed jobs bill, but that bill has so many different parts that it will be challenging to get it through the Senate quickly. The Senate wrangled for weeks on the last extension, which was only won because they also extended the housing credit which cost 10x more than the unemployment extension and was roundly criticized by economists.
I wouldn’t be surprised if it takes months this time — if at all — and the Senate won’t even start until next year, at which point people will be falling off the rolls.
From the very beginning I said my worst fear was that once we got a quarter or two of growth that politicians would declare the recession over and cut off the millions of people that are on their last leg. Thus far there has been no attempt to treat the situation as systemic and if the job market doesn’t improve quickly to record levels then we are almost guaranteed to see another recession and huge political and increasing social strife if there is no extension.
I would be grateful if people have ideas on the best way to help that may not have received traditional attention.
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13 Responses to “Congress Has Really Dropped The Ball On Its Most Pressing Concern (P.S. Not Healthcare)”
Welcome to Democratic Socialism, folks! If you can't get the attention of the ones giving out the doles, or they decide you are not worthy of their care or the best sacrificial lamb they have available in a time of *their* need, you are basically screwed down flat and violated with a hot poker up the butt! That it is this bad with unemployement, which basically every American pays into as an Insruance Policy managed by the Government, is truely shameful, but not really surprising. You have to learn to “game the system” if you want to get by. Forget about doing the right thing. That will get you nothing. And we wonder why the Moral Fabric of this Country is going down the toilet? Really? If you stand on morals of *any* type, your are setting yourself up for an automatic shaft job from the Government. They are the ones who really set and enforce the standards! Welcome to the Obama-Nation!!! All Praise the Messiah! All Praise Allah!!!
To Melford:
Obama nation? Really? I seem to recall that this situation was well underway when we voted this last lame-duck president out of office. We are saddled with the worst economy since the great depression thanks to 8 years of Bush and his cronies. Even last year, when his term was ending, when the economy was showing signs of a downturn, this poor excuse ignored it and left a mess for the next president to clean up. He was so focused on the war, he ignored what was happening at home. Even now the Republicans try to stall last minute help for millions who are about to lose their benefits. Get a grip.
Thank you for bringing more attention to this issue!!
didn't congress git a 2.5 raise on there checks a month ago??
I don't know what the solution is but clearly it would be better if jobs could be created rather than just focusing on relief payments In the short term, of course, more of the latter is needed and it's completely unfair for some people to now get cut off after a short term while others continue getting the benefits up to 99 weeks (the only way this could be rationalized at all is if there were longer terms for people in states that have the highest unemployment rates, or whose employment was in some of the hardest hit sectors where jobs aren't returning any time soon if at all.)
As for job creation, the best out of the box thought I can come up with on the fly would be to use ideas from right and left of the ideological spectrum to spur small business job creation. That would involve wisely targeted tax relief for small businesses along with some sort of WPA type program that worked through existing small companies to increase hiring.
This issue is really the only one where I support a “continue throw money at it at all costs” approach. I agree with you that there are systemic issues that need to be addressed in order to create jobs, but those are going to be very hard to do in any short time frame, and millions of people completely cut off will make the economy crash really hard. Moreover the payments have low marginal cost to society because the money is spent so quickly. Even the hardcore libertarian financial people I read support unemployment insurance payments.
I can't believe that they let this slip through.
I don't disagree, but I feel the job creation needs to get off the ground in a serious way. I feel that almost a year has already been wasted because the stimulus package wasn't focused on job creation.
“I feel that almost a year has already been wasted because the stimulus package wasn't focused on job creation.”
Which we both were saying at the time, along with several prominent economists…none of whom are in any policy positions. The most depressing thing to me (and something that is causing a mild crisis of faith) is that there seems to be almost zero correlation between having understanding/foresight of core issues and getting credit for it. As someone pointed out a few months ago, our society seems to define “leadership” as waiting until a problem is so bad that it is unavoidable and then having a strong response that may or may not make sense, as opposed to having a systemic approach the tries to head off issues far in advance.
Yeah, well, I'd say that's pretty much human nature where people hear what they want to hear and tune out from what they might need to hear- and lately it's all wrapped up in the rabid hyperpartisanship that locks people into a preconception that they seek to have validated by their preferred 'experts'.
I do think that a bit of a shift is beginning to occur now that it's getting harder and harder to deny that certain people were way off base in their predictions while others were more on target.
yup.
With all the attention and energy being wasted on an overreaching HCR, there simply was a lack of concentration on nitty-gritty problems. Shame on all of the Dems and Reps, they all are dropping this and other balls in their sand box wars.
Mark Zandi was the most noteworthy of those who listed the value of various stimulus measures according to the “bang for the buck,” the net effect each of them was believed to have. Zandi is the best example; people like him and his list (identified months ago, MONTHS ago, by me and by others) could and should have been employed to direct the stimulus in a learned as well as obviously logical fashion. Leave it to the Dems to have screwed up the stimulus, trying simply to benefit themselves instead by more of the same nonsense, and buying the cheap votes of the cheap voters. That Obama tried playing with a new “jobs summit” not too long ago (was that stupid stunt of any actual value?), which was an open admission of failure to date. Way to go, chumps. What will you be attempting for an encore soon?
Why ask about the Dems' ability to multi-task and juggle priorities? They can't even concentrate on and do a single thing correctly these days?
Meanwhile, once again, here's the related remedial reading. [scowl]
[July 24, 2008]
http://www.economy.com/mark-zandi/documents/Sma…
[January, 2009]
http://www.economy.com/mark-zandi/documents/Hou…