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Long-term unemployment benefits will be extended, but will they be paid for?

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Despite the Senate passing a three-month extension on Tuesday, the rhetoric from both sides of the aisle over a full year extension of long-term unemployment benefits is sure to increase in coming weeks. The reality is that Democrats and Republicans alike want to see the recently expired 99-week emergency benefit continued. Whether or not the cost should be paid for by off-setting cuts in other programs or added to the debt is what is driving the debate. Neither party can risk being seen as the ones responsible for cutting off the benefit, but both are in tough positions with their base.

Republicans want offsetting cuts elsewhere, but how hard will they fight the Democrats and risk being seen as uncaring heading into an election year? As poorly as the GOP is at getting their message out about WHY they take the position they do, there is little doubt which side would shoulder the blame. However, Democratic leaders in the Senate, including Charles Schumer, have indicated they would be open to cuts but have not identified where they would want the cuts. The Senator from New York made it clear that many Democrats believe the best action would be to pass the extension with “no strings”, political speak for no offsetting cuts, but would look at the second best choice-offsetting cuts- if the “best step” failed.

Government numbers add validity to the argument that the Republicans are making. According to the CBO, the federal government has spent $550 billion over the last six years on unemployment benefits alone. Combine that with an increase of 19 million (28 million to 47 million) in those receiving food stamps since 2008, as well as an increase of five million to the Medicaid rolls during the same time and the cost is clearly unsustainable. Those are staggering numbers during an economic recovery.

Factor in continued sluggish job creation that has led to a work force participation rate that is hovering near a four-decade low of 63%, and there doesn’t seem to be relief in the near future.

Look for a deal that will include most, if not all, of the cost being paid. That is a deal both sides can accept and sell to their base. It is also the only way an extension would get out of the Republican controlled House.

Passing the unemployment extension must be done, and paying for it is the responsible thing to do. Those elected to lead us must do their job and that means prioritize spending.

The CBO report has been linked below. Please take the time to read it and decide for yourself which position you support.

December, 2013 CBO Report

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