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EconomicPolicyInstitute February 8, 2008

This week, EPI maintained its focus on the economic stimulus package moving through Congress. In particular, our research and writings highlighted the importance of extending jobless benefits for the long-term unemployed, widely recognized as one of the most effective tools to prevent or soften a recession.

This has been a contentious topic in Washington, not only between the White House and Congressional Democrats, but among Democrats themselves. A $140 billion bipartisan plan passed by the House of Representatives, built around rebate checks to low- and middle-income families, failed to include unemployment benefit extensions (also left out was the infrastructure repair spending recommended by EPI).

Senate majority leader Harry Reid led an effort to redress this by expanding the package to about $158 billion, including targeted aid to seniors and veterans and $14 billion to extend payments by 13 weeks for the long-term uninsured. Benefits usually run out after 6 months, and they have been extended during several previous recessions, most recently six years ago.

Opponents characterized the Senate effort as “piling on pork” and said unemployment wasn’t bad enough yet to merit an extension of benefits. The measure required a supermajority to overcome a filibuster, but failed by a single vote on Wednesday night. Sen. Reid has said he will try again in the next few days.

EPI research showed that, although the overall unemployment rate is lower now, there are actually more long-term unemployed than the last time benefits were extended in 2002. We also projected that the number of people out of work for more than six months will climb to 1.9 million by the end of this year, half a million more than today. This Snapshot posted on Monday captured the numbers in graphic detail.

The theme was picked up in editorials by the New York Times and a range of smaller newspapers, from the Bangor Daily News in Maine to the Cleveland Plain Dealer, which cited EPI’s research and concluded that “extending unemployment insurance when the economy slows down is good economics.”

Nancy Cleeland and Ross Eisenbrey wrote in the Huffington Post on Feb.5 that extending benefits was a “no-brainer” because of the economic activity it would promote (far more per dollar than rebates).

Jared Bernstein explained the jobless numbers in a Feb. 2 post for TPM Café, writing “This is no time for complacency on the jobless front. The Senate did the right thing by including extended unemployment insurance benefits as part of their stimulus package, but word is that the White House is stonewalling against the extension, based exclusively on the low overall jobless rate. The numbers, especially the high share of long-term job seekers and the upward trend in the unemployment rate, underscore that this is precisely the wrong position. For once, let’s be ready for the storm before it arrives in earnest.”

Looking ahead
Remember manufacturing? For a moment, while Republican candidates campaigned in Michigan, lost jobs in the manufacturing sector made headlines again, but the subject was quickly forgotten as the campaigns moved on. EPI is taking a longer view, as part of its Agenda for Shared Prosperity—an ambitious effort to map out a new economy that provides security, stability, and quality services such as health care and education.

On Wednesday, Feb. 13, our offices in Washington will host “Remaking Manufacturing,” a morning event that features the release of three new reports that highlight the importance of a strong manufacturing sector and outline ways to get there. The keynote address will be given by Senator Sherrod Brown, followed by a panel discussion moderated by New York Times reporter Louis Uchitelle.

From the EPI Blog
Lawrence Mishel and Will Kimball
The Top 1 Percent of Wage Earners Falters in 2013—Was it a Temporary Event?
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Myths and Facts About Corporate Taxes, Part 2: Will Congress’s Idea of “Base-Broadening, Rate-Lowering Tax Reform” Fix What’s Wrong With Our Corporate Tax Code?
Ross Eisenbrey
Corporations Are Stealing Your Constitutional Rights: Forced Arbitration Clauses
Lawrence Mishel
Chair Yellen Is Right: Income and Wealth Inequality Hurts Economic Mobility
Ross Eisenbrey
Businesses Agree—It’s Time To Raise the Minimum Wage
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