WASHINGTON– On Wednesday night, a bare-bones measure to keep federally funded unemployment insurance checks headed to the long-term unemployed failed in the Senate. Moderate Republican Sens. Olympia Snowe and Susan Collins of Maine had signed on to vote for cloture on the $34 billion bill. But without Sen. Robert Byrd (D-W.Va.), who passed away earlier in the week, Sen. Harry Reid (D-Nev.) — the majority leader who hails from the state with the worst unemployment rate in the country — once again found himself stuck at 59 votes. By the time Byrd’s replacement is in place, in mid-July, two million Americans will have lost their benefits, and the bill extending them will have languished for some 11 weeks.
Economists insist it should not be like this. Benefits for the jobless remain one of the most effective forms of stimulus. Mark Zandi, chief economist at Moodys.com, estimates that they generate $1.61 of stimulus for every dollar spent. Moreover, expanding unemployment insurance is wildly popular, even among conservatives. Poll after poll shows that a vast majority of Americans support giving aid to the laid-off. And on Capitol Hill, even the most stringent deficit hawks do not object to the unemployment benefits themselves. They object to expanding the deficit to pay for them.
Democrats insist that the benefits expand the deficit, to put new dollars and fresh demand into the economy. Deficit reduction will have to happen, they say, but later. Having the government give with one hand and take with the other makes little sense. In this, they received support on Wednesday from Doug Elmendorf, director of the Congressional Budget Office, who said that “[cutting the deficit] while economic activity and employment remain well below their potential levels would probably slow the economic recovery.” Republicans, however, have not been convinced.
So, the debate has dragged on. Yesterday evening’s failed cloture vote is just the latest in a long line of disappointments and failures around unemployment insurance, known as UI. For the past nine months, the Senate has devoted hours of floor time and hundreds of hours of behind-the-scenes negotiations to ensuring that the government continues to support those left unemployed by the worst labor-market recession since the Great Depression. And for the past nine months, every bill — every extension, every jobs package — has faced staunch opposition from Republicans. Repeatedly, the Senate has had to turn to short-term stopgap measures rather than more permanent extensions. In the words of one aide, “it is beyond frustrating,” particularly since the measures are so noncontroversial. “Frustrating” has become the touchword for advocates of UI — and particularly for the unemployed.
It was last fall that Democrats in the White House and on the Hill started worrying that the extended unemployment benefits created by the American Reinvestment and Recovery Act — the $787 billion stimulus bill passed in February 2009 — were running out before any sign of a labor-market recovery. The stimulus bill both lengthened the number of weeks of benefits by 13 or 20 and made some more generous, by $25 a week — enough to keep 800,000 people out of poverty, the Center on Budget and Policy Priorities has estimated.
But by the summer of 2009, the economy had not turned around. The September jobs report showed that the unemployment rate had edged up to 9.8 percent, a 26-year high. Joblessness had officially become a crisis in and of itself. And the stimulus’ expansion of unemployment benefits was due to expire on Dec. 31. President Barack Obama told the nation in a radio address, “[The] report on September job losses was a sobering reminder that progress comes in fits and starts, and that we will need to grind out this recovery step by step. That’s why I’m working closely with my economic team to explore additional options to promote job creation.” Democrats decided they needed to renew the benefits, and to expand them further.
ROUND ONE
Having decided to re-up the federal unemployment insurance benefits, House Democrats originated a bill and passed it with relative ease. The Senate created a stronger version — extending UI benefits for 14 weeks in all states, and 20 weeks in states with unemployment rates higher than 8.5 percent. The maximum number of weeks reached 99.
Senate Democrats anticipated some difficulty moving the measure. They were in the midst of the health care fight, and the bill was not offset with reductions in spending elsewhere; Republicans, they knew, might not come on board instantly. Still, given the horrific condition of the labor market, they expected nothing like the fight they got. On Oct. 8, Reid asked for unanimous consent to move the motion forward. Sen. Jon Kyl (R-Ariz.) objected. Five days later, Senate Democrats tried again. Sen. Orrin Hatch (R-Utah) objected. Thus started a month-long battle over help for the jobless while the unemployment rate flirted with double digits.
The Senate quickly became embroiled in debates over amendments — with Sen. Mitch McConnell (R-Ky.), the minority leader, insisting that Reid allow consideration of a provision to ensure that the community-organizing group and Republican bugbear ACORN would receive no federal funding and another provision to filter illegal immigrants out of the workforce. The amendments enraged Democrats, who saw them as pointless, and a tool for time-wasting. “The other amendments are vexatious,” Reid fumed. “They are argumentative. We don’t want them. They are not germane. They are not relevant to this legislation.” Sen. Debbie Stabenow (D-Mich.) echoed his thoughts. “This [Republican obstruction] has become a tactic,” Stabenow told TWI at the time. “We could have [moved this bill] three weeks ago.”
After weeks of debate, the bill passed a cloture vote to move to consideration, 87 to 13. Democrats expected the legislation to race to passage, but Republicans continued to bring up objections, requiring a number of procedural votes and hours of floor time. “Maybe [Republicans] needed another ACORN amendment,” Reid said. “Maybe that would be something that would please them.” (The amendments did not make it in.) On Oct. 4 — 27 days and four votes since the bill’s initial introduction — it passed unanimously, 98-0. It became law in early November, adding two new tiers of unemployment benefits. The bill was a success — but the struggle for it was a portent of the difficulties to come for Democrats trying to extend benefits for the jobless.
ROUND TWO
That same month, the Senate Democratic leadership admitted problems with the extension. For one, the unemployment rate had drifted above 10 percent, seemingly necessitating a further expansion of the safety net. Additionally, there was a serious glitch in the bill: A Dec. 31 filing deadline meant that many jobless Americans would not get the full 20 weeks of benefits. The National Employment Law Project estimated that 475,000 people would exhaust state-funded benefits after Dec. 31, missing the deadline and losing federal help; a further 580,000 would exhaust one tier of federally funded benefits just after the deadline, missing out on additional federal benefits. Congress needed to extend the deadline. And it needed a better underlying unemployment bill to boot.
In December, Democrats managed to get the patch into the Defense Appropriations Bill after some wrangling — but only a two-month extension, to the end of February. Still, it gave them time to focus on an ambitious new bill aiding the unemployed and others hurt by the recessionary economy: pushing back the deadlines for the federal unemployment benefits, authorizing more Medicaid and COBRA funding and stalling a 21 percent cut to payments to doctors under Medicare, among numerous other measures under consideration. In December, the House passed those measures as part of the Tax Extenders Act of 2009 — later known as the American Jobs and Closing Tax Loopholes Act of 2010 and commonly referred to by its House resolution number, 4213.
Before the Senate could get to it, again, benefits started expiring. On Feb. 25, Senate Democrats asked for unanimous consent for a House-passed 30-day extension of COBRA and unemployment benefits — just enough time to let the Senate get a more permanent fix in place. But Sen. Jim Bunning (R-Ky.) objected. “Everybody in this chamber wants to extend unemployment benefits,” he said. “[But] if we can’t find $10 billion somewhere for a bill that everybody in this body supports, we will never pay for anything.” Reid kept on pushing for unanimous consent. Bunning kept on objecting — stopping the Senate from moving forward a total of eleven times.
After a five-day standoff that threatened to stop all congressional work, and after Senate Republican leadership expressed their anger with Bunning, he eventually gave up. The vote passed, 78 to 19.
ROUND THREE
With the temporary extension signed into law, Senate Democrats moved on to a more permanent fix for unemployment insurance and serious consideration of 4213. Reid hoped to extend federal unemployment benefits through the end of 2010, rather than a few months at a time. The Senate included the provision in its amendment to the bill, and the motion passed on March 10, 62 to 36, with six Republicans joining the Democrats and only Sen. Ben Nelson (D-Neb.) breaking against them.
The problem? Some argued portions of the bill violated new paygo rules: Democrats could deficit-spend only in “emergencies,” and did the unemployment situation really qualify? Most Democrats insist they do, and have pushed back against whittling down the stimulus to pay for the benefits. “[UI extensions are] done in a way that we have always done it,” Stabenow told TWI. “[Those are] always categorized as an emergency. And, frankly, if 15 million people without jobs is not an emergency, I don’t know what is.”
Either way, the bill needed to go back to the House for approval. And House deficit hawks were not looking kindly on it anymore. Without the bill signed into law, the expiry of unemployment benefits — an albatross following Democrats for months by that time — returned again.
Procedurally, maneuvering to get another patch proved remarkably difficult. The Senate chose to take up a House-passed one-month extension, then to move to a more permanent solution. “We should not let these programs expire,” Sen. Max Baucus (D-Mont.) argued on the Senate floor. But Republicans insisted they would not vote for anything not paid for.
They prevented unanimous consent — meaning Democrats needed to file cloture on the motion, and needed to give it time to “ripen” before a vote. It came down to the Friday before a two-week vacation started at the end of March. The long-term unemployed would start falling off of the federal government’s rolls on April 5. Congress would not be in session until April 12. The Senate failed to move, and hundreds of thousands of jobless Americans — around 200,000 a week — stopped getting their unemployment checks over Easter.
It took until April 15 for the Senate to get to passage of the patch; Republicans Olympia Snowe (Maine), Susan Collins (Maine) and George Voinovich (Ohio) crossed the aisle to support the measure. The bill extended the filing deadline for federal unemployment benefits to June 2, extended COBRA health subsidies and delayed the 21 percent cut to Medicare reimbursements for doctors. It cost $18 billion, with no offsets. On April 15, Obama signed it into law.
ROUND FOUR
And so, Congress turned again to 4213 — the extenders package, passed by the House, modified by the Senate and returned again to the House. There, deficit-hawk Democrats insisted on whittling the portions of the hundred-provision bill down. Compromises took a $140 billion bill down to $54 billion — shortening the extension of UI through November, trimming the Medicare doc fix and the COBRA extension and dropping the additional $25 a week on jobless checks. It passed, but barely.
The modified bill returned to the Senate just before — again — the extensions of UI and other provisions would start to end over the Memorial Day holiday. This brings us to the present, where the bill got stuck in the Senate for a month, dropping extended benefits for 1.2 million Americans before eventually dying.
The death wasn’t quick. On June 18, it lost a cloture vote, 56-40 — shy of the 60 votes needed — with Sens. Joe Lieberman (I-Conn.), Ben Nelson (D-Neb.), Olympia Snowe (R-Maine), Susan Collins (R-Maine) and Scott Brown (R-Mass.) all voting no. A week later, a pared-down bill lost another cloture vote, 57 to 41. The responses ranged from depression to rage. Sen. John Kerry (D-Mass.) said, “This is one of the worst moments I’ve seen in 25 years in the United States Senate. … Even cutting our original proposal nearly in half wasn’t enough to secure even one Republican vote today.”
Reid broke the bill up, moving just the unemployment extension portion, along with a House-passed change to the filing deadline for the homebuyer tax credit. On Wednesday night, that last stopgap bill died, 58 to 38. Senate staffers say that this is not the end. They will wait for Byrd’s replacement, expected to be appointed within two weeks or so, and then move the bill with Snowe and Collins’ support. They will make the UI checks retroactive for the two million Americans who have been denied them in recent weeks.
But the anger is palpable after nine months of delays. “It’s not just Harry Reid or any other Democrat who needs brave Republicans to step up, for once, for what’s right and what’s needed. It’s the people we serve. We have Republicans ready to protect banks while sticking it to the working men and women of this country while opposing efforts to extend unemployment benefits,” Jim Manley, Reid’s spokesman, told TWI. “This is yet one in another series of cynical and brazen attempts by Republicans to position themselves as the party of ‘hell no’ in November.”
And the unemployed? They are confused and enraged. Yesterday evening, I spoke with Deb Martin, a 49-year-old Ohioan on the verge of losing her federally extended benefits. “I have kids,” she said. “I have a mortgage. It’s been years of this [garbage] and I don’t know what I’m going to do without those checks. Even if they make them retroactive, we might be living in the car by the time they do.”
The economic establishment stresses that the unemployment checks continue to be not only beneficial, but necessary. Testifying before the National Commission on Fiscal Responsibility and Reform, John Irons, the research and policy director of the Economic Policy Institute argued, “Unemployment should reach 6 percent or lower, and be trending downward, before any fiscal contraction should be seriously considered. In fact, with unemployment hovering near 10 percent and with projections putting unemployment at elevated levels for at least the next couple of years, further job creation is indeed necessary.”
But privately, Senate staffers whisper that if this unemployment extension makes it through, it will be the last one. There will be no more torturous attempts to grant unemployment benefits to the 15 million unemployed. There will be no bills to add a Tier V for the million who have exhausted all benefits and still cannot find work. The benefits will end in November.
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