by Mike Hall, Feb 1, 2008

The economic stimulus package is stalled in the U.S. Senate. Senate Republican leaders—backed by the Bush White House—threatened a filibuster against efforts by Senate Democrats to extend unemployment insurance (UI) benefits for the millions of jobless workers who will run out of benefits in the next several months.

The bill, approved Wednesday by the Senate Finance Committee, improves on the House-passed stimulus package by adding the UI extension and also providing tax rebates to more than 20 million low-income senior citizens and veterans.

In a letter to the Senate, Bill Samuel, AFL-CIO legislative director, urged lawmakers to maintain the UI extension.

We believe the economy is at risk of sliding into a very serious recession, and Congress must act immediately and decisively to head off the worst. There is a general consensus among economists that providing unemployment benefits is one of the most efficient ways to stimulate the economy, since jobless workers are most likely to spend their benefits immediately and pump more money back into the economy, generating more economic activity.

(Click here for the latest news on job loss.)

The U.S. House bill ignores the growing number of workers running out of UI benefits and instead concentrates on one-time tax rebates for individuals and families, plus big tax breaks for businesses.

In a column in the Detroit News, UAW President Ron Gettelfinger notes that 200,000 workers a week run out of unemployment benefits before finding a job.

Unemployed workers—whether or not they qualify for a one-time rebate—will face a financial emergency when they run out of benefits. They’ll have no way to pay their bills and no capability to help the economy with enhanced spending power.

 

There is near universal agreement that extending unemployment insurance and enhanced food stamp benefits is the fastest, most effective way to stimulate the economy. These benefits put money directly in the hands of those who need it—and who will spend it directly into our struggling economy.

Along with the UI extension, the AFL-CIO has called for  the stimulus bill to include a temporary increase in food-stamp benefits as one of the most efficient ways to pump money quickly into the economy. The Bush administration and Republican leaders strongly oppose both the UI and food-stamp measures. Says Sen. Majority Leader Harry Reid (D-Nev.):

I can give you their own speech on unemployment compensation and food stamps. They don’t believe in them, O.K? So there was no way to agree when they don’t believe food stamps are important, when they believe that if you extend unemployment benefits, it only keeps people looking for a job, which is a little hard to comprehend.

When the Senate returns to the stimulus bill next week, Republicans likely will engage in a filibuster that requires 60 votes to overcome, again blocking action on the Finance Committee bill with the UI extension. If so, Democrats are expected to offer UI and food-stamp amendments to the House bill.

The AFL-CIO has urged lawmakers to include several other important provisions that would provide quick economic stimulus and relief for working families, including fiscal relief to the states, acceleration of ready-to-go construction projects and tax rebates for low-income seniors and disabled veterans.

Click here to read more from the Center on Budget and Policy Priorities (CBPP) and here for more from the Economic Policy Institute (EPI).

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