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“Are there no prisons? Are there no workhouses?”

November 30th, 2010  |  Matt Pavich

If Congress does not act by midnight, November 30, 2010 almost 800,000 unemployed workers will lose their emergency unemployment insurance (UI) benefits; overall, two million workers stand to lose their benefits in December.

Senator Max Baucus introduced legislation yesterday that would extend the program for one year, saying that the benefits are the “only lifeline many workers… across the country have left in this tough economy.” Baucus also pointed to a report by the US Department of Labor showing that, for every dollar spent on the UI program, two dollars are reinvested in the economy. The bill, which would cost $54.6 billion, has not received significant support, primarily because of concerns that its price-tag would add to the national debt.

The distaste for extending the bill extends across party lines. According to published reports, Senator Ben Nelson (D-Neb), while indicating that he thought the program should be extended, suggested that the program can’t be extended forever. That’s a common refrain from most Republican lawmakers, including those who suggest that Congress should extend the Bush tax-cuts for individuals making more than $250,000 a year. In fact, this morning, retiring Republican congressman Jon Shadegg (R-AZ) said on the MSNBC program, Morning Joe, that the only way the program should be extended is if it’s fully paid for and if the tax cuts for the top earners are extended. Shadegg said that the benefits don’t help the economy because “Unemployed people hire people? Really, I didn’t know that.”

And there, neatly encapsulated, is the problem with the idea that we should kick the UI program to the curb, while extending the Bush tax cuts. According to most analysts, the program does stimulate the economy because, while the recipients may want, as Shadegg sneered, to keep their money, there are still things like food, shoes and shelter to pay for. And, in paying for those basic necessities, the UI program recipients compensate the providers of the aforementioned food, shoes and shelter, who in turn compensate their suppliers, who in turn… you get the idea.

In fact, it’s the Shadegg-supported, trickle-down idea that seems to have been widely discredited. The Bush tax cuts were implemented on the theory that making the wealthy wealthier would encourage them to buy more stuff, hire more people and, in general, stimulate the economy. Instead, as we now know, job creation was largely flat during the Bush presidency. Until the end, when it fell into a ravine after the economy collapsed.

There is little question but that the ever-growing national debt is a problem that will have to be dealt with soon. President Obama’s Commission on Deficit Reduction is expected to recommend heavy cuts in government spending and entitlement programs like Social Security and Medicare and tax hikes. And if folks like Shadegg and his fellow Republican legislators were genuinely serious about slashing that debt, they wouldn’t oppose letting the Bush tax cuts for the top earners expire because doing so, according to most analysts, would pump approximately $700 billion into the national coffers.

So, as the Senate attempts to debate whether or not to extend the program, those are the numbers that should jump out. Cost of extending the UI program? $55 billion. Value of letting those tax cuts expire? $700 billion. The hypocrisy inherent in allowing millions of Americans to lose their homes so that a select few can keep more of their millions?


One supposes that folks like Shadegg must be fans of Charles Dickens, or at least one of his most famous character, who intoned, “Are there no prisons? Are there no workhouses?”

But Ebeneezer Scrooge woke up in time to make it a happy Christmas for his fellow men. The hope here is that Congress will do the same.