TOPICS > Economy

Jobless Benefits Face Another Vote: Weighing Benefits vs. Deficit

July 19, 2010 at 12:00 AM EDT
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After two failed attempts, an extension of unemployment benefits is up for yet another vote Tuesday in the Senate. Jeffery Brown speaks with Norm Ornstein of the American Enterprise Institute and NewsHour Political Editor David Chalian for more.

JEFFREY BROWN: And we turn to the policy and politics of the jobs problem.

BARACK OBAMA, President of the United States: It’s time to do what’s right, not for the next election, but for the middle class.

JEFFREY BROWN: Standing beside three out-of-work Americans, the president accused Republicans of political gamesmanship and hypocrisy in blocking a $34 billion extension of unemployment benefits.

BARACK OBAMA: And I have to say, after years of championing policies that turned a record surplus into a massive deficit, the same people who didn’t have any problems spending hundreds of billions of dollars on tax breaks for the wealthiest Americans are now saying we shouldn’t offer relief to middle-class Americans like Jim or Leslie (ph) or Denise (ph) who really need help.

JEFFREY BROWN: Since the previous extension expired in June, nearly 2.5 million Americans have lost their jobless benefits, and thousands more are losing their checks each week.

In May, the House voted to allow the long-term unemployed to hold on to those benefits through the remainder of the year. But Senate Republicans have held up the measure for two months, saying Democrats need to find a way to pay for it.

Republican Senate leader Mitch McConnell made that case on CNN yesterday.

SEN. MITCH MCCONNELL, R-Ky, Minority Leader: We’re all for extending unemployment insurance. The question is, when are we going get serious, Candy, about the debt? We recently passed a $13 trillion dollar cumulative deficit threshold. When are we going to get serious about this? This administration has been on an incredible spending spree.

JEFFREY BROWN: Tomorrow, the Senate will swear in its newest member, Carte Goodwin of West Virginia, before taking up the measure once again. He will replace the late Robert Byrd and will likely give Democrats the 60 votes needed to break a Republican filibuster.

And for more on how we got here and the politics at play, we’re joined by veteran Congress-watcher Norm Ornstein of the American Enterprise Institute and the NewsHour’s political editor, David Chalian.

Norm, I will start with you.

And you start with the Democrats. They are saying this is a moral argument, but, also, by the way, there is an economic argument.

NORMAN ORNSTEIN, resident scholar, American Enterprise Institute: There is. And it is in part that we have never before, in extending unemployment benefits, paid for them, because they almost always happen at times of difficult economies and a need to spur the economy, and that unemployment benefits are one of the best ways to provide stimulus in the economy, that about $1.60 in benefits to the economy accrue for every $1 in unemployment benefits.

The net cost to the federal government is about 60 cents on the dollar. So, they say this is a good and necessary investment at a time of a sagging economy.

JEFFREY BROWN: And, at the same time, we see the president with Americans standing next to them, saying we have got to do something for these people.

NORMAN ORNSTEIN: And for people with an unemployment rate that has remained stubbornly near 10 percent, and the people that the president pointed to today are not those who have taken the benefits and sat back and enjoyed them. They are all actively seeking jobs, and, in these cases, have not been able to find even an interview.

JEFFREY BROWN: And, David, the Republicans — we just saw it again — the argument is budgetary. We need to be able to pay for this.

DAVID CHALIAN: Right. They don’t want to be on the side of the argument that is the economic argument you are referring to.

The politicians don’t want to say, oh, these people are just using the benefits and they’re not looking for work. They purely want to hang their hat on the deficit issue that they have been running on all year long, the Republicans.

And they were not so comfortable back in February — when Jim Bunning was alone, the senator from Kentucky, making this case, all the Republicans were not so comfortable joining. Now they are, because they have gotten very comfortable on this issue of the deficit, don’t add to the deficit.


JEFFREY BROWN: What happened? Because this started as a kind of lonely quest by Jim Bunning. He was alone for a bit. It stretched on for several months.

DAVID CHALIAN: Mitch McConnell, his fellow Kentuckian, the leader, was trying to wrangle Jim Bunning around so that they can get this done.

But what has happened is that poll after poll shows that the American electorate has somewhat bought into the Republican concern of debt and deficit. It is their main calling card this election season. And so they’re willing to have this argument with the president about the issue of — again, they don’t want to say they are opposed to extending unemployment benefits, but they are saying the president should have to pay for it. And they think that resonates with voters.

JEFFREY BROWN: Have they said how it should be paid for?

NORMAN ORNSTEIN: They’re not even interested — they have offered some options. And it includes taking money unspent from the stimulus package, is mostly what they want to do.

But there is another element to this. And there’s a backstory as well. Even if we go back to the time when Jim Bunning stood out there alone and Republicans got angry when it began to turn against them politically, this had gone on for several cloture votes and offering of multiple amendments that were not terribly relevant.

It’s part of a larger approach as well by Republicans to kind of clog the pipes of the process so that other things don’t get done. And if it turns against them politically, as it did back when Jim Bunning did this, they will back off.

But now, as David said, they’re more comfortable with the deficit argument. One real question is whether the other side of that deficit argument, as Republicans are now ramping up to take on the tax cuts, the Bush tax cuts that expire at the end of the year, and will add several trillion dollars to deficits down the road, they are opposed to ending those tax cuts, which, of course, will add deeply to deficits. But, in this case…

JEFFREY BROWN: Well, and there we heard the president today pointing right to that, right, saying, hey, hypocrisy, right?


DAVID CHALIAN: It was just last week that we heard Jon Kyl, the number-two Republican in Senate, say, when pressed, well, how are you going to pay for the extension of those Bush tax cuts? And the administration is happy to point out that Jon Kyl didn’t have an answer.

He — that $680 billion over 10 years I think is what they estimate those tax cuts on the wealthy, to extend them, that is what it would cost, the Republicans don’t have a plan to pay for that. That would just be added to the deficit. And so they’re trying to draw the contrast. Bush tax cuts to the wealthy can be extended and added to the deficit, according to the Obama administration, how they paint the Republicans, but this $34 billion extension of unemployment insurance, emergency spending that, as Norm pointed out, has really been on a bipartisan basis in the past, been passed, that is no — that is no good for the Republicans.

JEFFREY BROWN: Now, we did, in fact, hear a stronger tone from the president Saturday in his videoconference and then today. He’s decided to make an issue.

NORMAN ORNSTEIN: And what’s interesting about this, Jeff, is that he has decided to make it an issue when they have the votes.


NORMAN ORNSTEIN: They already have the votes. He didn’t go on national television or on radio to push this case back when they were stuck at 58 or 59, and particularly — while they got two Republican, the lonely two senators from Maine, when Robert Byrd died, they didn’t have the votes.

Now he feels as if, not only will he get a victory out of it — and it’s nice to urge something and then have it happen — but Democrats are feeling more comfortable that they have got some traction on this issue. And one reason is that while this only affects two million to 2.5 million people directly, we have polls suggesting that one-third of Americans have somebody in their family who has been unemployed. And so it may have more traction. It will be interesting to see.

DAVID CHALIAN: And when asked specifically about extending unemployment benefits, last week, we saw two polls, CBS News and the ABC News/Washington Post poll, both with majority support for passing the unemployment insurance, even though, in the question, the poll respondent knew that it would be adding to the deficit.

JEFFREY BROWN: Now, all of this is — I mean, the larger issue here, of course, is an economy and particularly a jobs market that seems to be stuck. Both sides are trying to figure out how to play that, in a sense, or how to — what kind of policies are even possible in this environment?

DAVID CHALIAN: Well, I think when you — you get to the larger economic debate that will go on now throughout the election season of, overall — forget just the unemployment insurance — spending to stimulate the economy vs. being a budget hawk and reining in this deficit, that is the crux of the two parties’ economic debate going forward into this fall.

NORMAN ORNSTEIN: Yes. And this, it must be remembered, has now been broken out to simply provide an extension through November of unemployment benefits. And it will be very difficult to do it beyond that.

But it was part of a larger and more ambitious bill that included extending COBRA coverage, so that the unemployed could have health benefits. It included a substantial sum of money for the states, which can’t employ countercyclical economic policies. They have to balance their budgets. And they’re going to lay off teachers and police and others.

All of those things have been taken out. And it’s not clear that Democrats have the votes to overcome a filibuster to do more spending to stimulate the economy, when this deficit issue looms out there, even if, as an awful lot of economists would say, we could teeter into deflation, and we may well need a massive additional stimulus.

JEFFREY BROWN: But they have both decided this is the issue they have to address, economy and the jobs?

DAVID CHALIAN: No doubt about it.

And you will see this next measure that the administration will push on is small business loans, any little slice. But as Norm is getting at, they’re not politically in a position — they cannot sell anything that is a second stimulus, which is what actually a lot of economists…


DAVID CHALIAN: … that may be necessary.

JEFFREY BROWN: Even though there’s a lot of pressure from their left.

DAVID CHALIAN: Without a doubt. Without a doubt.


NORMAN ORNSTEIN: And it’s because, of course, the initial stimulus simply has not, in this sluggish economy, partly just because of underlying economic conditions, provided the punch that they had hoped for, that they had promised. And voters are a little bit more skeptical or cynical.

So, they don’t have the political traction to do it. But I expect to see a bunch of small-bore jobs bills moving forward over the course of the next couple of months.

JEFFREY BROWN: All right, Norm Ornstein, David Chalian, thanks a lot.