January 1, 2014
Extending Unemployment Benefits: Obama's Urgent Political Priority
By Jeffrey Folks
When a temporary program of long-term unemployment benefits expired on Saturday, the media was chock-a-block with whiners. Those losing the temporary benefits were whining, liberals were whining, and the chair of the Democratic National Committee was whining. And the biggest whiner of all was the president.
What all of these unhappy souls were moaning about was the expiration of temporary long-term unemployment benefits, an emergency program that began five years ago. Like all "emergency" programs in Washington, this one hung around long past its prime. If the president's party has its way, the program will live on forever.
What a great idea! Paying millions of Americans not to work, forever. With a straight face, DNC Chair Wassermann Schultz claimed that doing so would spur economic growth. Democratic Senator Jack Reed, co-sponsor of a bill to extend benefits for three months, warned that long-term unemployed must not be "thrown off a cliff." Extending benefits, he said, was "the right thing to do for the economy."
It's the right thing, according to liberals, not just because we don't want a lot of unemployed people thrown off a cliff along with Grandma and the disabled, but because it will increase job growth. That was the argument by Annie Lowrey of the New York Times, who claims that failure to extend benefits would reduce jobs by 300,000 in 2014. Others assert that the cuts will staunch the fledging economic recovery and set the nation back into recession.
The actual effect on the overall economy would be closer to a 0.1% reduction in GDP. And how is it that paying 1.3 million Americans not to work creates jobs? That one has never been explained. Every respectable economist I've consulted states that when unemployment benefits run out, a greater number of workers return to the labor force.
Obama, of course, is squarely behind the extension bill. He calls it an "urgent economic priority." How is it that a bill that might prevent a 0.1% reduction in GDP is an "urgent economic priority" while approval of the Keystone XL pipeline, which would increase GDP by $30 billion over three years and $7.7 billion indefinitely thereafter, is not?
In reality, the benefits bill is an urgent political priority because it distracts attention from the massive failure of ObamaCare. It is the bill that sets the stage for a full year of fevered income inequality rhetoric ahead of the midterm elections.
The Reed bill extends the current 47-week federal benefit program for another three months. It may be difficult for House Republicans to oppose such a proposal if a funding trade-off can be found -- or, one should say, when a trade-off is found, however bogus. But what happens in March, when the three-month extension runs out? Most of the same 1.3 million unemployed and others like them will still be relying on long-term unemployment benefits for their last crust of bread, if we are to believe the liberal press. So another three-month extension will be an "urgent economic priority," and another thereafter, at least up to the November election -- at an annualized cost of $24 billion.
With the 2014 election looming and Democrats on the ropes over ObamaCare, income inequality is about all the president has. That is why we will hear a lot about the expiration of temporary unemployment benefits in the weeks to come. Is it fair that that the 1% are shopping at Georgio Armani while those who have been out of work for more than a year are losing their benefits? Is it fair that some are driving new Maseratis and vacationing on Musha Cay while others get their SUVs repossessed?
Well, yes. It is fair, but that is beside the point. By injecting the 1% into the argument, the left has once again stooped to the level of class warfare. In truth, it is not just the 1% who did well this Christmas -- it is the 93% who are employed and participating in an economy that is growing in spite of all the president can do to stop it.
Are there jobs available for the other 7%? With the U.S. economy expanding at a rate of 4%, willing workers should be able to find employment. In every city I have visited, I have observed "Help Wanted" signs posted at grocery stores, restaurants, and retail establishments. A recent check of Craigslist for the Dallas-Ft. Worth area listed some 800 jobs for the date of Dec. 27. For Atlanta, there were about 400 job postings. For San Francisco, there were approximately 900 for the same date.
There would be more jobs, of course, if the president would get behind economic growth -- something he has failed to do for five years now. That would mean cutting corporate and individual taxes instead of raising them, cutting regulation instead of increasing it, and standing up to union bosses and trial lawyers instead of groveling before them.
Instead of asking for an extension of benefits, the unemployed need to ask why they have failed to obtain work. The main reason is because the president and his party are determined to keep them subservient to government. Having lost their unemployment benefits, there's a good chance that most of these workers will return to the labor force -- perhaps not at the wage they would like, but at some level. Returning to work is the best outcome in almost every case. It is far better than remaining dependent on unemployment benefits and losing the work skills they still possess.
This is not the outcome liberals would like. They see those 1.3 million who are losing benefits as useful pawns ahead of the midterm election. They see the fight over extension of unemployment benefits as a political winner, and they will be heard from in the weeks ahead.
In response, conservatives should point out that it is better to earn one's living than receive a pittance from government. It is better to work than to sell one's liberty for an unemployment check, a housing assistance voucher, a SNAP card, a free phone, or anything else the president wants you to have. Ultimately, the dignity of the individual is contingent on employment and self-reliance, and government has no right to rob anyone of that benefit.