What the Senate’s failure to pass unemployment benefits means for Florida

By | 07.07.10 | 3:54 pm

Last week, Annie Lowrey reported on the Senate’s failure to extend unemployment benefits, which are now expiring for millions of Americans:

By the time the Senate does pass the bill — on July 12 at the very earliest — at least 2.14 million Americans will have lost their benefits. The good news? Those benefits are retroactive; the unemployed will be able to apply for the benefits they lost out on, and will eventually get checks. The bad news? Many of those 2.14 million Americans will have to make do with very little in the meantime.

Even if Congress extends the benefits, the lapse is unprecedented — and the hurt it causes is palpable. Never before has Congress let unemployment benefits expire with joblessness still so prevalent, according to an analysis from the Center of American Progress and National Employment Law project.

The Orlando Sentinel explains the consequences for Florida:

More than 147,000 Floridians will run out of unemployment benefits this week because the U.S. Senate, before leaving on a weeklong summer vacation, was unable to reach an agreement on how to keep payments flowing.

By the end of next week, the number will rise to 175,000 unless lawmakers reauthorize the federal legislation that has provided emergency payments to the long-term unemployed.

Lowrey reported that most Senators agree the extension is necessary; they’re just bickering over how to fund it. Republicans want to dip into “unspent” stimulus funds (which have already been allocated to agencies, but not used), so they can pay for the benefits without increasing the deficit.

Democrats aren’t willing to do that because, in their eyes, it would defeat the purpose of the stimulus.

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.”

Ezra Klein echoes Elmendorf’s point in more human terms:

Taking the money for a bridge that was to be built next month in order to fund unemployment benefits for next week is like bailing water from one part of the boat into another part. Republicans, conversely, have coalesced around a form of deficit-driven economics that they didn’t hold to in the Bush years but have reconsidered now.

It turns out that unemployment benefits may actually help decrease the deficit. Either way, they’re one of the most powerful forms of economic stimulus. Because they’re only available to people who recently lost their jobs and are looking for work, recipients tend to start spending them relatively quickly to meet basic needs, like paying rent and buying groceries.

The extension failed by a single vote. Florida’s delegation was split: Bill Nelson voted for it, and George LeMieux joined all but two Republicans in voting against it.

One of two things will need to happen for the extension to now pass. Either a replacement for the recently deceased Sen. Robert Byrd will have to be sworn in, or one senator will have to change his mind. Until then, hundreds of thousands of Floridians will have to make do without jobs or jobless benefits.

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