Cutting Unemployment Benefits, Immoral and Bad Economics

By Sen. Bernie Sanders, Reader Supported News

28 December 13

.S. Sen. Bernie Sanders (I-Vt.) said today that Congress must restore unemployment benefits that expire Saturday for 1.3 million Americans, including some 600 Vermonters, who have been out of work for longer than 26 weeks.

Unless Congress acts, jobless benefits will lapse during the first half of 2014 for an additional 1.9 million people, including another 2,300 Vermonters.

"It is not only immoral to cut off help for workers struggling to find jobs, it is also bad economics," Sanders said. "At a time when long-term unemployment is near a record level, cutting benefits will hurt the rest of the economy and cause even more jobs to disappear."

Failure to extend benefits would be a $25 billion blow to the economy during the coming year and result in the loss of more than 200,000 additional jobs, according to the conservative estimate by the Congressional Budget Office. The CBO also projected a 0.2 percent drop in the nation's gross domestic product unless the benefits are extended.

Senate Majority Leader Harry Reid (D-Nev.) has said that a measure to restore long-term jobless benefits will be the first bill that the Senate takes up when it reconvenes on Jan. 6. Sanders is one of 21 cosponsors of the bill, but only one Republican senator, Dean Heller of Nevada, has signed on as a supporter. "The critical question is how many Republicans are prepared to stand with unemployed workers," Sanders said.

While the jobless rate has declined in recent months, it is still far worse than it was in 2008 when President George W. Bush signed the Emergency Unemployment Compensation program into law. Back then the unemployment rate was 5.6 percent and the average length of unemployment was 17.1 weeks. Today, the official unemployment rate in November was 7 percent and the average length of unemployment is more than 36 weeks.

Moreover, the official unemployment figure masks the reality that total unemployment stood last month at 13.2 percent, according to the Bureau of Labor Statistics. That number counts workers forced to settle for part-time jobs and those who gave up looking for jobs.

The number of long-term unemployed has been among the lingering effects of the severe recession that began in 2008. Today, there are three job applicants for every one job opening. There simply aren't enough jobs out there for the 11 million Americans who are actively seeking work. As a result, 37 percent of all unemployed Americans have been out of work for more than six months.

Because the recession has continued to hurt job prospects, Congress reauthorized the extended unemployment benefits program 11 times since the recession began in 2008.

Altogether, nearly 24 million Americans (including more than 33,000 Vermonters) have received the emergency unemployment benefits since 2008. Unemployment benefits, typically $300 a week, lifted 2.5 million Americans out of poverty last year, according to the Census Bureau.

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