Federal jobless benefits have become a political football – and it's the workers losing them who are getting kicked. Congress has once again left town, as it did for Christmas, with more than one million unemployed workers prematurely cut off from Emergency Unemployment Compensation benefits and with the ultimate fate of these benefits still hanging in the balance.
We shouldn't be here. Earlier this month, six Republican senators joined Senate Democrats in voting to let the Senate debate a proposal to restore emergency federal unemployment benefits. Senate Majority Leader Harry Reid thought he had a compromise in hand with enough Republicans to restore the program through November, save money by reducing the total weeks of benefits and address a concern of some Senators about a possible overlap between the receipt of unemployment insurance benefits and Social Security disability benefits – all without adding to the budget deficit.
That all came crashing down as debate degenerated into a spat over Senate rules. On policy matters, lawmakers elevated questions about how the proposal was financed and whose proposal to address the benefit overlap was better over the bill's main purpose, which was to restore emergency benefits to more than one million people (and counting). In the end, they left without taking any action.
Holding up benefits that cost $25 billion or less on budgetary grounds misses the forest for the trees. Emergency Unemployment Compensation is a temporary program that will expire once the economy is stronger. It performs a valuable counter-cyclical role by injecting purchasing power into the struggling economy. Because it has a negligible effect on future deficits and debt, an extension, even if not paid for, does not seriously compromise longer-term deficit-cutting efforts.
As my CBPP colleague Chuck Marr points out, Congress would do far better to focus its deficit-reduction efforts on the several dozen tax breaks that expired at year-end (mostly for corporations) and that lawmakers of both parties are pushing to extend with little or no concern about whether they are financed. Because supporters of these tax breaks consider them anything but temporary, they tend to become permanent fixtures of the tax code – at a cost of roughly $500 billion over the next decade. As Marr says, policymakers have it backwards if they insist that emergency benefits be paid for while insisting on no such thing for those tax breaks year after year.
The other major policy issue that derailed the emergency benefits program was a proposal to curtail the joint receipt of unemployment insurance and disability benefits. Reid included a proposal from President Obama's budget to do that. Sen. Rob Portman, R-Ohio, had his own proposal, which he said would merely "[end] double-dipping between unemployment and disability benefits," and that it's "in the president's budget." As my CBPP colleague Paul Van de Water points out, however, the Portman proposal would go well beyond merely ending "double-dipping" and is far different from the president's proposal.
To receive disability benefits, an applicant must have a severe impairment that has prevented him or her from engaging in "substantial gainful activity," defined as earning more than $1,070 a month, for at least five months. In other words, it allows a recipient to work a modest amount, and thus be exposed to a job loss that would legitimately qualify the recipient for unemployment insurance.
The Portman proposal would define receiving unemployment insurance as a substantial gainful activity that, as Van de Water explains, would not only prevent people from receiving both benefits simultaneously – what Portman calls "double-dipping" – but would also delay eligibility for both disability and Medicare for some people with serious disabilities and hasten benefit losses for others.
The Reid/Obama proposal is quite different from Portman's – and far preferable. It would eliminate "double-dipping" by reducing disability benefits dollar-for-dollar by the amount a person receives in unemployment benefits. In effect, a person who was legitimately eligible for both sets of benefits could receive the higher of the two – but not both.
If Republicans sincerely want to restore emergency jobless benefits, it's time that they do so. At a minimum, they should be willing to simply extend them for three months and continue to work out a compromise for the rest of the year.
Chad Stone is chief economist at the Center on Budget and Policy Priorities.