The bipartisan budget agreement crafted by U.S. Sen. Patty Murray and U.S. Rep. Paul Ryan included $22 billion devoted to further reducing the countryís budget deficit. That is on top of what Congress and the Obama White House already have achieved through the sequester and other steps. The amount deserves particular attention in view of the 1.3 million Americans, 36,000 in Ohio, losing their unemployment compensation starting on Saturday.
Congress could have included an extension of jobless benefits in the budget deal. The cost runs an estimated $25 billion for the year, or roughly equal to the sum aimed at further deficit-reduction. Unemployment compensation makes for better use of the money, providing a cushion for many facing a severe jobs crisis, plus a timely boost to the still weakened economy.
Those receiving benefits are certain to spend and generate economic activity, each dollar in benefits triggering $1.55 in return.
One argument made by U.S. Sen. Rand Paul and others goes that extended unemployment compensation ill serves workers, inviting them into a perpetual cycle of joblessness. This analysis fails to account sufficiently for the dire job market, especially for the long-term unemployed, or those out of work for 26 weeks or more. In Ohio, federal benefits cover up to 63 weeks of unemployment. Over the weekend, the weeks will shrink back to 26, even with the long-term jobless rate at an extraordinary level.
Today, the rate stands at 2.6 percent. Consider that in the previous three recessions, extended unemployment compensation wasnít cut off until the rate was half that level. Another measure of the difficult landscape is that the federal Bureau of Labor Statistics calculates there are three unemployed workers for every job opening.
Neither are the monthly checks excessive, an average $300. The money does provide an incentive to keep engaged in the job market, the benefits lost if a worker ceases looking for a position. Know, too, that the extended compensation kept 2.5 million people out of poverty last year.
The hope is that Congress will return to work in January and move quickly to extend unemployment benefits. The Center on Budget and Policy Priorities projects that by the end of next year, 4.9 million people will lose jobless assistance, 130,000 in Ohio, many seeing their first 26 weeks of benefits expiring and no emergency federal aid available to help them cover necessities. These workers arenít responsible for the countryís long-term deficit problem. They are down on their luck and deserve assistance.