CHN: 37 Senators and 153 Reps. Vote to Deny UI to 2 Million; And Those Who Vote No Endanger State Aid, Youth Jobs, and TANF Emergency Funds

Nearly 30 million people were unemployed or underemployed in June, with more than 45 percent of the unemployed out of work more than six months.  Never has Congress cut off federal unemployment benefits with jobless rates over 9 percent.  Until now.  By July 10, just before Congress returns from its Independence Day recess, more than 2 million people will go without unemployment checks; 140,000 will have lost COBRA health insurance.  Although the House overwhelmingly passed a bill to restore the federal unemployment insurance program (H.R. 5618, with a vote of 270-153), the Senate continued to be stymied by a stubborn minority.
And that’s not all.  Also held up are aid to states to cover rising Medicaid costs, $1 billion for youth jobs, another year’s funding ($2.5 billion) for the Temporary Assistance for Needy Families Emergency Fund, and $1.065 billion for the new National Housing Trust Fund.  The Senate was unable to pass shrinking versions of these provisions as well as unemployment insurance for lack of the 60 votes needed to do almost anything in that chamber (in H.R. 4213).  They were later even unable to pass a stripped down bill extending federal UI through November and the homebuyers’ credit through September, although the homebuyers’ credit was later extended in a separate voice vote (H.R. 5623).

The Senate’s attempt to reinstate the federal unemployment insurance program (which was allowed to lapse on June 2) fell one vote short of the needed 60, although the final vote to cut off debate and move the bill forward was 58-38 because Majority Leader Reid (D-NV) switched his vote to no to allow him the option of bringing it up again after the July 4 recess.  The Senate vote was mostly along party lines, but Senators Snowe and Collins (both R-ME) broke ranks to support the bill, and Senator Ben Nelson (D-NE) voted against it.  It is expected that the replacement for Senator Robert Byrd (D-WV), who passed away on June 26, will provide the needed 60th vote, but a potential court challenge to the method of naming his successor makes the timetable uncertain.

Those voting no argue that unemployment benefits and the other provisions should be paid for with cuts to other programs.  The Senate leadership did accept proposals to make cuts to pay for many of the provisions, but did not try to pay for UI.  Economists have urged Congress not to cut other programs to pay for UI, since reducing other spending will detract from the boost to the economy provided by UI benefits.  The oft-cited Mark Zandi, Chief Economist at Moody’s Economy.Com, testified before the Senate Finance Committee in April that every dollar spent on UI returns $1.61 in economic growth, and that a dollar of state aid returns $1.41.  But senators anxious to show they were concerned about the deficit insisted on more cuts, so the Senate leadership proposed a $9.56 billion reduction in SNAP (food stamp) benefits that would begin in 2014 as well as other cutbacks, a move strongly opposed by advocates.  Although these offsetting spending cuts were in the bill and the Medicaid aid was reduced from $24 billion to $16 billion, there still were not enough votes to pass the legislation; it failed 57-41.

Republican Members have made a point of seeking cuts in the remaining economic recovery funds as a means of paying for unemployment benefits or other spending or tax breaks they support.  The leadership of the House and Senate have opposed ending the use of recovery funding since the $34 billion thus far unspent can still be used and the spending is still needed up to shore up the still fragile economy.

June’s one-month drop of more than 650,000 in the civilian labor force as more people were discouraged from looking for work added to weak home sales and other economic news causing analysts to worry that we may really face a double-dip recession.   The insistence of a minority in Congress on cutting spending to reduce the short-term deficit is counter to most economists’ recommendations.  But their insistence has threatened the extension of all the emergency state aid, both for Medicaid and for education (see appropriations article in this issue).  The June unemployment data show that over the past 12 months, there has been a loss of 193,000 state and local government jobs.  With state governments alone facing over $140 billion in budget gaps for FY 2011, no additional federal aid will mean hundreds of thousands more jobs lost and service cuts potentially affecting millions of vulnerable people.

As Congress regroups after its July 12 return, there is growing concern that decisions to split apart the jobs legislation may result in some of its components being forgotten.  In addition to the state aid, advocates will continue to press for another year of the TANF Emergency Fund, which now is expected to create 200,000 temporary subsidized jobs for poor parents by its expiration at the end of September, as well as providing aid for families in desperate straits.  Efforts will also continue to fund youth jobs and the Housing Trust Fund.  In addition, advocates will re-double their efforts to fight against SNAP (food stamps) cuts which are certain to be proposed again.  When Congress returns, Members will want to revive a group of expired tax cuts that have in the past been routinely extended and that were originally part of the jobs bill H.R. 4213.  Although combining those tax cuts and the other expiring items did not provide the impetus for passage in June, the increasing urgency of the economic news may make the difference in July.
Resources used in 37 Senators and 153 Reps. Vote to Deny UI to 2 Million:
Bureau of Labor Statistics, The Employment Situation – June 2010click here
House Roll Call Vote on H.R. 5618:
Senate Roll Call Vote on H.R. 4213, June 30 (stripped down version):
Testimony of Mark Zandi, Chief Economist, Moody’s Analytics, before the Senate Finance Committee:
“Using Unemployment Insurance to Help Americans Get Back to Work:
Creating Opportunities and Overcoming Challenges”
Senate Roll Call Vote on H.R. 4213, June 24:

Food and Nutrition
Home Energy Assistance
Labor and Employment