by Curt Guyette
In this week’s News Hits column, we reported that the Snyder administration and the Michigan Legislature failed to capitalize on an opportunity to obtain an additional $137 million in federal funds that could have gone toward helping the state’s unemployed workers.
That comes on top of the successful effort by Michigan Republicans earlier this year to cut the eligibility period for state unemployment funds from 26 to 20 weeks. After that, a specially enacted federal program kicks in. Known as Emergency Unemployment Compensation, or EUC; approval for this funding was first passed in June 2008 as the impact of the Great Recession began to be felt in a big way, and has been amended by Congress eight times since then, according to info provided by the nonprofit National Employment Law Project in New York City.
Conservatives didn’t sign on to the last extension willingly, however. Their support came only as a compromise that involved the Obama administration agreeing to keep the Bush-era tax cuts in place. The EUC funding is set to expire at the end of this year. And the prospect for it being renewed does not appear great says reporter Andrew Leonard in an article posted on Salon.com yesterday ("The war against the unemployed").
“With another recession looming, extending unemployment benefits again shouldn’t even be on the bargaining table,” writes Leonard. “But even as winter threatens, you can be your last dollar that Republicans will be even more unwilling, this time around, to extend a helping hand to the millions who lost their jobs through no fault of their own, and who are struggling to feed their families and keep a roof over their heads.”
George Wentworth, a senior staff attorney with the NELP, agrees that there is likely to be “pushback” from congressional Republicans when it again comes time to extend the EUC.
With their focus on cutting deficits without raising taxes, the one thing the GOP seems more than ready to do is keep swinging the budget axe. No matter who gets chopped down in the process.
In regards to this particular issue, as many as 3 million Americans could lose their economic lifeline beginning in 2012, reports Leonard. The stated reasoning, he explains, is the belief that unemployment benefits only serve to encourage lazy-ass Americans to continue sitting around instead of getting off their duffs to go out and find a job. The problem is that there is only about one job for every five job seekers.
Never mind that unemployment rates continue to be distressingly high — 9.3 percent in Michigan, according to the most recent reports — and that the prospects for immediate improvement are pretty slim. Even if we manage to avoid a “double-dip” recession, and that’s a big if, no one seems to predicting much economic growth over the next few years.
Furthermore, letting the EUC expire increases the threat to an already fragile economy. It’s not just the unemployed and their families that will suffer if their unemployment checks disappear.
Its not like that money is laying around doing nothing. Just the opposite: It is pumped directly back into the economy.
As a study by the Congressional Budget Office noted last year, extending unemployment benefits during prolonged economic downturns such as the one we are experiencing is a cost-effective way to “spur economic activity and unemployment.”
Take away the funds and these people have no money to spend, which adds to the downward economic spiral instead of reversing it.
Among other things — and we continue to see this in Michigan — people are unable to make their mortgage payments, causing continued foreclosures. The result of that is a lowering of property values and, consequently, reduced tax revenues.
The bottom line is that it’s not just a matter of compassion for families struggling to deal with unemployment. It is in the best interests of all of us to keep priming the economic pump.
Only the completely shortsighted — or those so well off that the continuing collapse around them makes no difference (and their legislative minions) — can fail to see that.