Last December there were a whole bunch of liberals who were caught between a rock and a hard place as the president and the Republicans made a deal to extend the Bush tax cuts in exchange for extending Unemployment Insurance until 2012, thus taking it off the table as a bargaining chip every few months.
House Ways and Means Committee Chairman Dave Camp and Senate Finance Committee Ranking Republican Orrin Hatch have introduced a bill that, they say, would improve the unemployment insurance (UI) system by “forward funding” federal UI payments to states. That sounds good and, in fact, “forward funding” is a worthy goal, as explained below. But, their bill actually would let states take federal funds that are supposed to help the long-term unemployed and use them for other purposes. That not only would hurt some of the most vulnerable Americans but also would slow the economic recovery.
“Forward funding” refers to the practice of putting aside enough money in state UI trust funds in good times to pay for the benefits needed in hard times. The families that receive UI benefits then boost the economy by spending the money when consumer demand is weak. As we explained in a recent report, Congress needs to enact legislation to give states a framework to restore forward-funding before the next recession. Without such legislation, most states likely will enter the next recession without the money needed to pay benefits. Senate Bill 386, introduced earlier this year, provides the sort of framework that states need.
The Camp-Hatch proposal would do something very different, and damaging. It would break a deal the President and Congressional leaders negotiated late last year in which lawmakers extended jobless benefits for one year for the long-term unemployed—those out of work for more than 26 weeks. That assistance is especially important for the long-term unemployed because states’ unemployment benefits typically end after 26 weeks, but — with the job market still very weak — more than 4 in 10 unemployed workers are not able to find jobs within that time.
Surely the Republicans wouldn't just blatantly break this deal would they? And there's no way that the Democrats would let them, right? Yeah ...
I honestly don't know. But with the unemployment numbers stuck at around 9%, the housing market shakier than ever and growth looking anemic at best, it's a very bad idea, not to mention cruel and dishonest. But get ready, they are going to argue that the private sector is going gangbusters now and there's nothing stopping these lazy sods from getting a job. It's just how they roll.
They will, by the way, do the same thing with any other "concessions" in the next Grand Bargain the first chance they get. Their post-modern politics doesn't acknowledge the concepts of hypocrisy or intellectual consistency. Keeping their end of a bargain would hardly break any of their rules.
Now the Democrats could certainly cry foul and I would guess there will be some mewling from the usual suspects. But if it's expedient to ditch this old hostage to "save" a new one, I could see them letting it go. I'm guessing they'll trot out Planned Parenthood again. It's become the perpetual damsel tied to the railroad tracks in these negotiations.