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Levin wants unemployment extension be added to tax extenders or highway bills

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Rep. Sander Levin, D-MI the Ranking Democratic Member of the powerful Ways and Means Committee in the House of Representatives has taken to Congressional Quarterly's Roll Call writing a commentary piece urging Congress especially the Republican majority in the House to pass an extension Emergency Unemployment Compensation (EUC) program. In the opinion piece published on June 8, 2014 Levin urged President Barack Obama, speaker of the House John Boehner, R-OH and Congress to work to find a way to extend unemployment benefits for America's long-term jobless. Levin indicated that there were three options, pass a standalone unemployment benefits extension bill, are adding it as an amendment to the either the must pass business tax cuts extenders or highway bills.

Over 2.9 million long-term jobless Americans, unemployed for 27 weeks or more lost benefits over five months ago on Dec. 28, 2013 when the EUC program expired. In the five months there were two potential times time to renew the program the first bipartisan bill in the Senate failed in February when Republicans balked at it not providing revenue to pay for the Emergency Unemployment Compensation Extension Act of 2014. The second bipartisan deal co-authored and sponsored by Senators Jack Reed, D-RI and Dean Heller, R-NV reached in March included revenue to cover the costs, extended the program retroactively, lasting for five months with a new end date of June 1, 2014. The bill passed in the Senate on Monday, April 7 after a series of procedural votes, and has languished at the committee stage in the House since.

Speaker Boehner refuses to put bill to a vote without job creation measures included, and he has continually asked the White House to provide him with a list if acceptable provisions. Boehner requests went with no actual response. The White House, President Obama, and Senate Majority Leader Reid consistently refuse to allow any provisions to be added to the bill that would have made it more attractive to the Republican House. The only direct response the speaker received from the Obama administration was from Secretary of Labor Perez, who sent a letter to Boehner on Wednesday, May 7, 2014. Perez provided Boehner with a list of possible job creation provisions, which were all Obama and Democrat legislative priorities, and most would not appeal to Republicans. Although there was one exception, the jobs training bill.

Adding the unemployment benefits extension to the Senate's jobs training bill "the reauthorization of the Workforce Investment Act (PL 105-220)," would have been acceptable to Republicans, but the sponsors already refused to add it as an amendment. Some House Republican supported adding the extension to the House passed jobs training bill, HR 803 the "Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act" sponsored by Rep. Virginia Foxx, R-N.C., but that never amounted to anything.

Boehner also considered the original bill "unworkable" because of the retroactive element. At the time of the Senate bill deal the EUC program had already been expired for nearly three months. The speaker had reservations about the states implementing retroactive benefits, believing they have not kept up verified the long-term jobless' eligibility. Despite assurances from Secretary of Labor Perez implementation remained a road black. The obstacles have prevented the bill from ever reaching a vote in the House. The long-term jobless have been left hopeless since the Emergency Unemployment Compensation Extension Act of 2014, technically expired on May 31, 2014, and the House of Representative did not put it to a vote before they went on a recess from May 30 until June 9. Technically they can still vote on the bill, but will probably not.

The Michigan representative has long been an advocate for extending benefits. Previously on Tuesday, April 29, 2014 Levin personally pressured Boehner to pass the Heller-Reed bill by sending him a letter that featured over 50 personal anecdotes submitted and chosen to be included "describe how getting cut off of benefits has affected them." The letter put a personal face on the Americans the House would be helping if they would pass the unemployment benefits extension.

In his new article Levin emphasized that the "long-term unemployment crisis" has been "made worse by the five-month expiration of federal unemployment benefits." Levin argued that the long-term unemployment rate is still high enough to warrant the extended benefits, explaining that; "Our government has never terminated unemployment benefits when a full 35 percent of the unemployed have been out of work for six months or more."

Nearly three million long-term jobless Americans, unemployed for more than 27 weeks desperately need the benefits to survive, and each week over keep 70,000 losing benefits. Although the total unemployment rate keeps falling each month, the long-term jobless rate in May remains high at 3.4 million or 34.6 percent of all unemployed Americans, just slightly lower than in April. The number is much lower than the April 2010 "peak" of 45.5 percent, but not as low as the short-term unemployed rate. The EUC program usually has been renewed as long as the long-term jobless rate is above 1.3 percent.

Rep. Levin is calling on President Obama, Speaker Boehner and Congress to pass a benefits extension for the "three million unemployed workers and their families," "the economy," and "the future of the workforce." Levin went on to elaborate the effect not extending benefits will have on all three elements. Levin called the House not extending the program and putting the bill to a vote "cruel" to "hardworking Americans." He then listed the ways the long-term jobless have been financially destroyed by the program expiring. Rep. Levin explained that they have "exhausted their savings, seen their homes foreclosed on, let bills go unpaid, and run out of money needed to just put gas in their cars to go on an interview."

According to Levin the House Republicans' spite in not passing the bill is "short-sighted" considering the long term affects and harm to the economy not extending benefits is causing. Levin recounted that "nearly $5 billion was pulled out of our economy during the first quarter of 2014 - money that would have been spent on food, clothes, gas and other essentials by the long-term unemployed."

Levin also used the recent Congressional Budget Office (CBO) study to back up his claims on the economic ramifications, saying not extending the benefits "will cost our economy 200,000 jobs this year." The CBO study determined that if the benefits would be extended for a year it would provide 0.2 growth to the economy, and even the five-month Senate extension would serve beneficial to the economy. If extended for a full year the CBO study concludes extending benefits would add 200,000 jobs and the program would cost $26 billion.

The problem remains that mostly older workers are the ones facing the long-term joblessness or as Levin describes "bearing the biggest burden." Employers prefer younger workers with more technological skills, leaving older workers to the wayside. So while the economy has rebounded for the short-term unemployed the long-term are still facing unemployment. The longer a worker is unemployed the more difficult it is for them to find employment.

Levin indicated older workers already feel conscious because of their age, pointing out that "Older unemployed workers already tend to leave age related information off their resumes." Levin found his data from the American Association of Retired Persons (AARP), which determined that "unemployed individuals 55 and over have been out of work for nearly a year." Actually the situation became worst even as the economy was supposedly improving and unemployment rates falling.

Thirdly, Levin discussed the "future of the workforce" worried that the lack of benefits will discourage workers and they will drop out from the workforce, and stop actively looking for work. Levin believes that would be one of the "greatest threats our fragile economic recovery." Levin believes that the long-term unemployed "will permanently leave the labor force," without benefits "hurting the economy for years to come."

Rep. Levin based this conclusion on a study conducted by Princeton University economics Professor Alan Krueger entitled "Are the Long-Term Unemployed on the Margins of the Labor Market?" Krueger previously was the "Chairman of President Barack Obama's Council of Economic Advisers and a Member of his Cabinet from November 2011 to August 2013." According to the study "Even in good times, the long-term unemployed are on the margins of the labor market, with diminished job prospects and high labor force withdrawal rates, and as a result they exert little pressure on wage growth or inflation." The study conducted with two other Princeton professors Judd Cramer, and David Cho for the Brookings Institute.

According to the study the make-up on the long-term unemployed consist of workers in minimum wage or near minimum wage jobs; "sales and service jobs (36 percent) and blue collar jobs (28 percent)." Additionally there are differences with educational background Krueger explains that the "unemployed are younger, less likely to be married, and less well-educated (about one third of employed workers have a bachelor's degree, while less than 20 percent of the unemployed have one; nearly 20 percent of the unemployed lack a high school diploma - twice the rate for the employed)." Contradicting, Levin's and most Democrats arguments, Krueger does not find the long-term jobless to be old-workers.

The Great Recession hit this particular group the hardest and a long-term unemployment grew the most "reaching 4.5 times its historical average, suggesting that long-term unemployment will be a lingering problem even if the unemployment rate returns to normal." Levin uses Krueger's point that the long-term jobless" become discouraged more quickly than the short-term unemployed and stop looking for work" as the main point for his argument in favor extending benefits. Levin explains "That's why Dr. Krueger concludes that an underappreciated, but vital reason to extend unemployment benefits in the current economic environment is that it helps keep long-term unemployed workers actively looking for a job. Keeping them in the labor force can - in the long run - boost employment and the size of the economy."

There is a fourth problem long-term unemployment is causing that Levin did not mention; it is that it also causes depression. According to a new Gallup poll published on Monday, June 10, 2014 20 percent of the long-term jobless Americans unemployed for a year "currently have or are being treated for depression." In general 12.4 percent of the unemployed Americans are depressed while only 5.6 percent of working Americans are suffering and being treated for depressed, that number "jumps" up to 18 percent for the long-term jobless. According to Gallup "This marked drop in optimism may affect job seekers' motivation, increasing the risk that they will drop out of the labor force altogether." Gallup concludes that "Record-high rates of long-term unemployment remain one of the most devastating effects of the Great Recession in the U.S. The economic cost is huge -- but just as tragic are signs of poor mental health among unemployed Americans."

Michigan Rep. Levin believes that the unemployment benefits extension bill can be made to satisfy Speaker Boehner's requirements. Levin asserted "Taking the speaker at his word, he made three prerequisites to supporting an extension of unemployment insurance. From this point forward, we can easily satisfy his demands." Responding to Boehner's first demand that "the extension to be paid for," Levin argues that although "most economists agree that unemployment insurance is a stimulus because money flows right back into the economy" the Senate bill "included offsets." As for the second demand the "states' ability to implement the program retroactively," Levin thinks that benefits can extended "through the end of the year" the retroactive element can be eliminated all the while "maintaining an individual's weeks of eligibility." The third element in Speaker Boehner's demand is having the "unemployment benefits tied to job creation."

Although the unemployment benefits extension bill's authors Reed and Heller are currently working on a new stand-alone bill that will fits Boehner's demands, they still do not believe it is possible for the Senate to add job creation methods. They consider that is something the House would have to do, and then resolved in conference negotiations with the Senate. Presently a new bill will cost $2 billion a week bill will be paid for by revenue, with a possible year extension or at least until the end of 2014, but would not be retroactive. They are currently looking to for enough Republicans supporters to sponsor it, to ensure passage in a new Senate vote. While Senate Majority Leader Reid already promised to put the completed bill to a Senate vote this summer.

The easiest way to ensure the bill's passage however, would be adding it as an amendment to a popular bipartisan bill that Republicans in the Senate and the House usually support and vote for. The leading candidates are the business tax extenders bill "S.2260 - EXPIRE Act of 2014" and the Highway Trust Fund bill "S.2322: MAP-21 Reauthorization Act," both which have always been renewed. Sen. Reed has already proposed adding a one year benefits extension as an amendment to the tax extenders bill. Rep. Levin also tends to agree believing tying the benefits extension to those two bills would satisfy the job creation element Boehner has looking for. To conclude Levin called passing the unemployment benefits extension with either popular and must-pass bill "a win-win solution" for Americans and Congress.

RELATED LINKS

  • S.2260 - EXPIRE Act of 2014, Sen. Wyden, Ron [D-OR] (Introduced 04/28/2014), 05/07/2014 Motion to proceed to consideration of measure made in Senate. S. Rept. 113-154

Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University, and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. She covers US, Canadian & Israeli politics, with a particular focus on the Obama presidency, Congress, domestic policy, and elections.

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