Secretary of Labor Thomas E. Perez sent a letter to Speaker of House of Representatives John Boehner, R-OH on Wednesday, May 7, 2014 urging the speaker to put the unemployment benefits extension bill to a vote. The secretary looked to allay concerns and reservations Boehner has mentioned he has regarding passing and implementing the unemployment benefits extension bill. Additionally, the labor secretary included a list of suggested job creation measures that could be added to the bill, just as Boehner had been requesting from the White House. However, the list includes elements that have support primarily from Democrats. Perez has interjected himself a number of times urging the passage and extension of the Federal Emergency Unemployment Compensation (EUC) Program, however, has been ignored by Congress in the negotiation and debate process.
Secretary Perez addressed a number of issues from the unemployment benefits extension debate that have not been mentioned as much recently, since the main argument now seems to be on adding job creation measures. Perez especially emphasized the long-term jobless statistics in Ohio, trying to point out how the situation is particularly for Boehner's constituents. The Labor Secretary however, took a much less confrontation and accommodating tone in his letter towards the speaker and the rest of the dissenting among the House Republicans.
The rest of the Democrats and especially President Barack Obama have taken a combative approach as if more concerned in the midterm election battle with the GOP, treating unemployment benefits a specific battlefield, rather just expressing humanitarian concern for the well being of the long-term jobless. Perez as an appointed cabinet member does not have to worry that the outcome of the midterms will affect his position, and he can take a more diplomatic tone and is in a better position to actually negotiate with the Republicans over this bill.
Secretary Perez began his letter emphasizing that the Senate passed unemployment benefits extension bill, S. 2148, the Emergency Unemployment Compensation (EUC) Act of 2014 was a bipartisan bill. He offered Boehner to personally negotiate the bill with the house as he did with the Senate writing; "We worked closely with a bipartisan group of Senators, and remain willing to do the same with you and others in the House."
Perez recounted the statistics that are now well known, that since EUC program expired on Dec. 28, 2013 nearly 3 million Americans lost access to benefits, and each week 70,000 Americans have lost benefits, by the end of the year it is projected that 1.6 million more Americans will lose benefits. The labor secretary described the facts to Boehner, trying to add a more personal touch to the statistics pointing out that 70,000 in Ohio are without benefits, and describing the problems and decisions the affected long-term jobless are living through. Perez explained that the Americans affected "have been stripped of unemployment benefits that help them keep the lights on, rent paid, and family fed. All too many long-term unemployed are making painful choices between these critical necessities."
The secretary of labor addressed Republicans' main opposition to the extension; they believe it does not motivate the unemployed to find a job as long as they have access to benefits. Perez recounted meeting with long-term jobless Americans, including those in the speaker's home state; "In the months before and after the expiration of EUC benefits, I have met with numerous people struggling to get back into the workforce after a long period of unemployment. Their determination inspires me. Their full time job is to look for a job.... I travelled to Ohio recently and met with a group of determined people seeking employment."
Secretary Perez wanted to indicate that these are hard working Americans who want to work, not just collect government money. He pointed out that; "These people embody the spirit and resilience of the long-term unemployed, who are working tirelessly to get back into the workforce." Since the EUC program was instituted and all throughout the financial crisis and recession Republicans voted with Democrats to extend the benefits. Now with the worst of the crisis over, and unemployment levels at pre-recession levels Republicans think the long-term jobless need to find jobs rather than receive benefits.
Democrats have been using to persuade Republicans a recent Congressional Budget Office (CBO) study to argue that not only will the unemployment benefits extension help the long-term jobless it would also contribute to economic growth. Perez also used cited the CBO study arguing that the mere fact that extending the benefits helps the economy, means the "EUC is itself an effective job creation tool." Continuing, Perez used the study's statistics; "Estimates from outside economists and the Congressional Budget Office (CBO) suggest that without an extension of EUC, GOP growth will diminish by 0.2 to 0.4 percent. Failing to extend UI benefits puts a dent in job-seekers' incomes, reduces demand and will cost an estimated 240,000 jobs in 2014." The CBO study determined a full year extension 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 labor secretary cited additional studies, including from the Council of Economic Advisors (CEA) and an earlier CBO study, relating; "Of that, the Council of Economic Advisors (CEA) estimates we have already incurred a loss of roughly 80,000 jobs so far this year. In a 2011 study, the CBO found that assistance to the unemployed is among the policies with the largest employment impacts per dollar spent." Perez also described that the benefits give Americans money that they use and put back into the economy to rationalize how the extensions helps the economy. Perez wrote that "unemployment benefits tend to flow to people who need the dollars for necessary expenses and will spend benefits quickly at businesses in their communities, spurring local growth and local job creation." Concluding that argument the secretary pointed out there are two benefits from the unemployment extension; "In short, extending EUC benefits is the right thing to do and the smart thing to do for job seekers and the economy."
Speaker Boehner has been looking for the White House to list what kinds of job creations provisions would be acceptable to them to add the bill. The White House, President Obama, and Senate Majority Leader Harry Reid, D-NV consistently refused to allow any provisions to be added. Now with the long-term jobless, Democrats and White House desperate, Secretary Perez has offered an olive branch, saying he would be open to negotiation on job creation measures. Perez offered that "In addition to the large job creation impacts of unemployment insurance, the Administration would welcome the opportunity to work with you on several job creation measures that Congress could pass together with the EUC extension."
The job creation provisions Perez suggested were almost entirely Democratic initiatives that are not Republican priorities. Peres suggested; "For example, we are eager to work on bipartisan legislation to fix our immigration system, simplify the tax code for businesses, support transportation reauthorization, and modernize our skills and job training programs." Republicans have expressed interest in one of Perez's suggestions on job training programs. There were negotiations to include as a provision the "Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act" (HR 803) sponsored by Rep. Virginia Foxx, R-N.C. and passed by the House in March 2013. Senator Dean Heller, R-NV, one of the Senate co-sponsors and authors of the unemployment benefits extension bill thought that combining job training would be good a fit and he supported that idea. Most recently Heller has been considering combining the business tax cut extenders bill with the unemployment benefits extension bill, because of its bipartisan support.
The secretary also brought up the Tuesday April, 15, 2014 letter Nevada Republican Gov. Brian Sandoval and Rhode Island's Democratic Gov. Lincoln Chafee sent to House Minority Leader Nancy Pelosi, D-CA and Speaker of the House Boehner asking them to put the bill to a vote, because of the high unemployment rates in their states. Perez recounted; "I would note that Governors Sandoval and Chafee of Nevada and Rhode Island, respectively, have publicly indicated that they are ready and able to implement the Senate bill. This is noteworthy in that Rhode Island and Nevada have two of the highest rates of unemployment in the nation."
Secretary Perez delved into the issue that Boehner has not publicly discussed since his late March GOP leadership press conference, implementing the benefits retroactively. Perez stated; "You have also expressed concerns that it would be difficult for states to administer the EUC program." Prior to the Senate passing the unemployment benefits extension bill, at the end of March Boehner expressed concern that Senate bill was "not implementable," and not "workable." Since the bill retroactively pays benefits for five months from Dec. 28, 2013 and last until June 1, 2014 Boehner also said that he is concerned about backing dating the benefit checks from the time the unemployed benefits were cut off until implementation. He believes in that time there are some unemployed that found work, and it is difficult to determine who deserves the checks, and until when they actually went back to work.
The secretary promised that there is nothing to worry about in implementing the extension, giving his personal reassurance that the he can help as well as the Department of Labor. Perez stated; "As a former state Labor Secretary, I have considerable experience implementing these programs…. Throughout this recovery, the Department of Labor has worked closely and collaboratively with states to ensure effective implementation of EUC programs, and we will continue to do so. I am confident that we can address any concerns and work with states to enable successful implementation of S. 2148."
After the unemployment benefits extension program lapsed for so many months, some states stopped verifying the long-term jobless that had been receiving benefits to see if they continued to qualify. Without that information, it becomes difficult to track who actually still deserves to receive the retroactive benefits. This is one of the problems Boehner and the House GOP have with the Senate bill. In fact many states have been keeping track of who is eligible for the benefits should they be extended. The House Ways and Means Committee issued a statement about also being worried about having the same concern about implementing the extension after it expired so many months before.
Speaker Boehner based his concern about implementing the Senate retroactive unemployment benefits on a letter written by the National Association of State Work Force Agencies (NASWA) that had been sent to Senate Majority Leader Harry Reid, D-NV and Senate Minority Leader Mitch McConnell, R-KY in March. The NASWA letter stated the Senate's bill "would cause considerable delays in the implementation of the program and increased administrative issues and costs," and that "Some states have indicated they might decide such changes are not feasible in the short time available, and therefore would consider not signing the U.S. Department of Labor's agreement to operate the program."
The speaker had his aides distribute the letter to reporters and posted it online. That time too Secretary of Labor Perez sent a letter to the Senate's leaders promising that there would be a smooth implementation and dismissing the NASWA letter. To Secretary Perez helping the three million Americans in need outweighs any potential challenges in implementing the retroactive payments. Perez explained; "I would respectfully submit that the implementation challenges for slates pale in comparison to the day-to-day-struggles confronting the long-term unemployed."
Secretary Perez also tried to convince Speaker Boehner to put the bill to a vote by plugging the improving economy. Perez touted that "The economy continues to grow at a steady pace. Last week's April jobs report marked the 50 consecutive month of private sector job growth. Over nine million jobs have been created in the last 50 months." The April jobs report released on May 2, 2014 showed that 288,000 jobs were added, the most for one month in two years, while the unemployment rate plummeted from 6.7 percent down to 6.3 percent, the lowest since September 2008, just before the economic crisis. The Democrats and Obama administration seem to not realize that is the most counterproductive argument they can use to convince the GOP to vote for a program meant to help the unemployed during the depth of the economic crisis. Citing economic and jobs growth only gives the Republicans the perfect response if the economy is that good it the long-term jobless should be able to go out and get one of those jobs.
Secretary Perez tried to argue the reason behind the necessity to extend the EUC program is that the long-term jobless rate remains high. Perez indicated that "At the same time, too many Americans remain out of work through no fault of their own. Until last December, it was unprecedented for Congress to fail to extend EUC benefits when long term unemployment remained so high." The long-term unemployment rate however, also fell in April there are 287,000 less Americans unemployed for longer than six months. Now the total stands at 3.5 million Americans or 35.5 percent all unemployed Americans. It will be even more difficult to convince reluctant Republicans to extend unemployment benefits with those numbers. The results gives reluctant Republicans an argument that the economy is improving and no longer under the recession where emergency measures needed to be in place, especially since the unemployment rate is actually better than it was when the EUC program was first implemented.
To conclude his letter Secretary Perez used themes and priorities of the administration, including using President Obama's mission and rational for his economic opportunity program, working to get Americans comfortably in the middle class. The secretary explained; "People from all walks of life and all across America desperately need our help. They want to punch their ticket once again to the middle class." Perez also at the same time tried in his letter's second attempt to portray that the long-term jobless do not just want the benefits, they do want to work, debunking one of the GOP's main arguments against the extension. Secretary Perez pointing out that "they are working tirelessly to find a job. As the Ohio job seeker told me, the long term unemployed 'have no quit in them.'" Perez finished his letter with a final push urging Speaker Boehner to put the unemployment benefits bill to vote, again trying to be accommodating offering to work with the House on the bill, writing; "President Obama and I are not quitting on them; the Senate has not quit on them. I would urge you to bring S. 2148 to a vote immediately, and I am more than willing to meet with you to discuss any questions or concerns you may have."
Apparently Speaker Boehner was not too convinced by Secretary Perez's letter. Michael Steel, the speaker's spokesman responded for Boehner after receiving the letter. In his response Steel reiterated Boehner's position that it is important that any bill the House would vote on needs to include job creation measures. Steel wrote in a statement; "Secretary Perez, and the entire Obama administration, have been aware of House Republicans' position on this issue since December of last year: We need a fiscally responsible package that also helps to create more private-sector jobs. This letter - once again - does not include such a plan."
It is already a month since the Senate finally passed the bipartisan compromise bill to extend the EUC program on April 7, 2014. The retroactive five-month extension laid out in the Senate bill starts from Dec. 28, 2013 and lasts until June 1, 2014. The Senate bill expires in the end of May, the House of Representatives has until then to pass the unemployment benefits extension. Senators Dean Heller and Jack Reed, D-RI, the bill's co-authors and sponsors have promised to go back write another bill should the House not pass this one by the deadline. As time goes further away from the program's expiration and closer to the midterm elections, the probability of passing the bill lowers. If the House does not move on the unemployment extension bill until the end of the month the chances of the EUC program being extended diminishes leaving three million Americans with the help they need to survive until they finally find a job.
H.R. 4550: Emergency Unemployment Compensation Extension Act of 2014, May 1, 2014, Referred to Committee
- S. 2148: Emergency Unemployment Compensation Extension Act of 2014, March 13, 2014, Reported by Committee
S. 2149: Emergency Unemployment Compensation Extension Act of 2014, March 24, 2014, Reported by Committee
- H.R. 3979: Emergency Unemployment Compensation Extension Act of 2014, Jan 31, 2014, Passed Senate with Changes
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. Her specializations are US, Canadian & Israeli politics.