Let me unconfuse you. Of course the failure to renew the federal unemployment extension is a controversial, political issue that elicits emotional responses and often, nasty comments in discussions on the Internet. The fact that the media has not given the issue the attention that such an important matter deserves shows how the issue is political poison for both of the major political parties in the United States of America.
Most articles on the subject of the failure to renew the federal unemployment insurance extension start with explaining the history of the issue ever since the federal program expired on Dec. 28, 2013. This is because the authors of these articles assume that most people do not know about the issue at all and need to be educated. I am not going to bore you again with the history. The important thing is what has happened since.
Most of the long-term unemployed people whose benefit payments were cut off after their regular state unemployment benefits were used up assumed that the federal extension payments would be renewed. This is because the U.S. House of Representatives and the U.S. Senate both assured the people that renewing the federal unemployment compensation insurance program would be their first priority when they came back into session after the holidays. U.S. president, Barack Obama, made speeches to the same effect.
However much to the horror of the long-term unemployed who are among the greatest victims of the huge recession that the country is still in when the U.S. government came back to business after the end of the year holidays they found that they had merely become pawns in a political war between the Republicans and the Democrats. There was a huge political battle in the Senate in which a bill to renew the unemployment benefits was filibustered by the Senate Republicans. Apparently to allow a bill to be put to a vote there has to be a vote to do so with a stipulation that the vote can pass either with a simple majority of 51% or it has to be passed with at least 60% of the votes. In this case it was decided that it would require a 60% vote to pass and so the vote failed even though the Democrats are in the majority in the Senate. In a move led by Republican Dean Heller and Democrat Jack Reed of Rhode Island, two of the states with the highest unemployment rates, a bi-partisan bill was created. Democrat, Harry Reid who is the Senate majority leader helped to get a vote that would only require a 51% vote to pass. Enough Republican senators voted for the bill for it to pass. Barack Obama said he would sign the bill as soon as it passed the House of Representatives. It went to the House and immediately the Republican Speaker of the House, John Boehner who is a Tea Party congressman, told Barack Obama to add a jobs creation bill to the unemployment bill. Barack Obama failed to do anything. He did not even call John Boehner. The bill was only a temporary solution for a five month extension. The five month period has since elapsed at the end of May. The bill could still be passed and those who have suffered from long-term unemployment would get the badly needed financial help with retro-active payments but there is now no effort at all on the part of the Republicans or Democrats to do so.
What does all this mean for the unemployed and why is this happening? As it turns out there have been many jobs creations bills created in the House of Representatives and the Senate as well as from the president, himself. John Boehner has accused Harry Reid of not allowing jobs bills that have passed the Republican dominated House to be put to a vote in the Senate. These kinds of stories for the long-term unemployed who have been cut off from any source of income are distressing and confusing. As we have learned from following these issues it turns out that all of the jobs creations bills approved by the Republicans include approving the building of the Keystone XL pipeline, weakening environmental regulations and giving tax breaks to the wealthy and to the most profitable corporations. This is why Democrat Harry Reid will not allow the bills to be brought to a vote in the Senate. When one member of the Activist Alliance for the Unemployed found out that her unemployment benefits were being hijacked in order to force the approval of the unpopular Keystone XL pipeline she broke down crying.
As it stands now Republican Senator Dean Heller and Democrat Senator Jack Reed of Rhode Island have introduced a new bill in the Senate for another five month extension going forward that does not include retro-active payments and will not help those who have found a job (even if it is a low-paying or part-time one) who have lost everything. Many have had their mortgages foreclosed on or have been evicted. Some have had their cars repossessed. Many have lost their Internet and smart phone service and have had to get the lowest cost phone service they can get to be able to apply for jobs. Many have to go to public libraries to apply for jobs online. Far from helping the long-term unemployed to find work the failure to renew the federal unemployment extension, known affectionately on the Internet with the hashtag of #RenewUI, has hindered many from finding work.
As many of these middle-class Americans who were living the American dream have discovered the safety net that they thought they had been paying into all of their lives with the taxes taken from their paychecks does not really exist for the middle class. Many feel lucky if they can get food stamps and even the food stamp program was reduced to its former level with the failure to renew the increased adjustment for inflation that normally is in the U.S. Department of Agriculture budget. Food stamps can be only used for food and not for other needed items such as soap or toilet paper. Many do not have money to put gas in their cars or for bus fare. Approximately 300,000 unemployed veterans have been cut off from unemployment benefits as well as being denied other benefits such as for education because of the Republican controlled Congress. Have people become homeless? Yes! Are minor children affected? Yes! Did you think that if there are under age children in the household that a person can get what they need from welfare? Think again!
Republican and Democrat representatives and senators who have been working to meet all of the demands of the Republican leadership to restore the federal unemployment extension have not been able to budge Speaker of the House, John Boehner, to bring any of the bills to a vote in the House even though the one already passed by the Senate would surely pass. Boehner asked that the extension be paid for. The bi-partisan bill was funded with pension smoothing and tax savings. Boehner said the bill should include provisions for more job training and better tracking of job hunting by recipients. This was included in the bill even though all the states have sufficient job reporting systems in place already.
Are you thoroughly confused now? I’ll bet you thought that people paid for the federal unemployment extension from their paychecks. Yes, the employee pays for the state unemployment insurance and the employer pays for the federal unemployment compensation insurance. The federal unemployment extension payments are only used when the level of unemployment in the country is very high. People have been getting these unemployment payments after the state unemployment ran out since the great recession started in 2008. Now some only received one of these payments before the failure to renew the program happened and they were cut off. Some have never received a federal unemployment payment after the state payments ran out. In fact states have to borrow the money from the federal government to continue to pay unemployment benefits after the state payments run out and the states have to pay this money back to the federal government.
Does it sound like the federal government is collecting a tax with no intention of really using the funds for the purpose intended? Do you wonder where all this money is going? How can the elected representatives of the people in Washington say that they have to find the money for this program to be funded when every week employers are paying into this “insurance”? The sad answer to that question is that this money goes into a general fund and the U.S. government spends it for whatever they want to. Some insurance program, huh? For a tax to be collected for a certain purpose and not reserved for that purpose and then be spent on other things is bad government.
What is happening in Washington now on the issue of the long-term unemployed who are without benefits? The Democratic leadership wants to distance itself from the issue before the November 2014 elections because it points out their failures in restoring the U.S. economy to prosperity. They have adopted the language of the Republican leadership in speaking more about creating jobs and helping people to be employed without mentioning how people are supposed to survive and seek employment with no income. The Republicans are claiming victory because unemployment has come down a little bit. This of course has nothing to do with cutting people off of unemployment benefits which has not created jobs but instead has caused job losses.
In fact the future looks very bleak for Americans at this time because of the failure to renew the federal unemployment extension. The Republican leadership spoke of creating jobs but the House Budget Office long ago informed them that restoring the federal unemployment benefits including the retro-active payments would in fact create 240,000 jobs in and of itself. Economists have warned that 200,000 jobs would be lost without the renewal of the benefits. The lack of spending power with the long-term unemployed has hurt the economy in local communities. As a person who used to work in banking I can tell you that loan defaults means that banks have less money to loan businesses and this will shrink the economy. Every week 77,000 more unemployed people will lose their payments when their state benefits run out. By the end of the year there will be 5 million unemployed people without any unemployment benefits. Some experts warn that a new crash of the economy will be imminent if the federal unemployment extension is not renewed. During the first years of the great recession the federal government could bail out the stock market by buying 85 billion in bonds every month but it cannot infuse money directly to the American people to meet their most basic needs that will have an immediate, positive effect on the economy. As in the world of banking only the largest investors matter. Smaller investors and average people don’t count.
Amazingly this issue has exposed the Tea Party as merely being a minority group that is trying to take control of the government. A minority group heavily funded by billionaires.
Unfortunately most people I meet including college students seem to be unaware of the importance of this issue or even unaware of the issue at all. A young college graduate I know said she thinks that the college students tend to be more aware of the issues that are affecting them directly. She is wrong. Although there is much talk of the long-term unemployed having many older workers among them who are being discriminated against in the job market due to age discrimination unemployment among 18 to 28 year olds is at 15%. The over all unemployment rate right now is said to be 6.1% for the entire country but much higher in certain states. Experts say even these statistics are not real as many unemployed are not really counted into the statistics. The fact is many Americans are still living in a bubble and cannot understand why someone who is looking for a job cannot find one. Their bubbles have not been burst yet. Among the long-term unemployed there are some who say they have voted Republican all their lives who will never vote Republican again. However the track record of the Democrats has not been good either.
Sources: http://www.irs.gov/Individuals/International-Taxpayers/Federal-Unemployment-Tax
http://thinkprogress.org/economy/2014/04/04/3423034/unemployment-benefits-slow-progress-impacts/
http://www.foreffectivegov.org/euc-stories
http://www.alternet.org/economy/why-we-might-be-verge-another-financial-crash
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Mark Alberto Yoder Nunez 