Tweets by @Stanford_Daily


OPINIONS

The Boots of Poverty Are Strapless

If you follow Stanford grad Cory Booker on Twitter, you’ll be well aware that federal unemployment benefits have expired. The bulk of the program expired at the end of 2013, cutting off almost two million people from its support.

The current federal program was initiated by President Bush as an emergency response to the 2008 recession and its resulting unemployment. Since then, Congress has voted 11 times to continue it, never allowing one day with expired benefits.

What makes this time different?

The current debate is over a bill in the Senate proposed by Jack Reed (D-RI). The bill proposes to extend benefits for an additional three months. Like most welfare programs, unemployment insurance is typically administered by states, and most states have a limit of 26 weeks of benefits for an eligible individual. The three-month federal extension would support the 35.8 percent of unemployed individuals who did not find a job in the first 26 weeks of being laid off, at a total cost of $6.4 billion over ten years.

Yet, when the bill came up for a vote a third time in early February, Republicans filibustered. There was no vote to be had.

Originally, they said that the cost was too high. After an amendment was added that cut spending elsewhere (called a pay-for), Sen. Rob Portman (R-OH) commented that the pay-for “put taxpayers at risk,” despite that a similar pay-for has been used in past laws by both sides.

Other Republicans say that their voice is being ignored in the process – hardly a good reason to deny two million Americans sustenance – despite the fact that the bill was co-introduced by Sen. Dean Heller (R-NV). Likewise, Sen. Tom Coburn (R-OK) inserted a sensible amendment that denied benefits to millionaires.

Even if the one voted needed for passage in the Senate is secured, Speaker Boehner will likely table it as he has tabled immigration, putting it on ice for the foreseeable future.

However, denying people unemployment insurance is actually hurting the economy. Firstly, it pushes people from a time-limited program to other, indefinite ones, like Social Security and disability benefits, according to a Government Accountability Office report. This often means the involved individuals leave the economy, creating a false decrease in unemployment. The Economic Policy Institute estimates that 310,000 jobs will be lost in 2014 alone as a result of the expiration.

Secondly, the government is injecting less money into a still-struggling economy. The Washington Post reports that the expiring of benefits will cut between two-tenths and four-tenths of a percentage point from America’s GDP, or between roughly $30 and $60 billion (because those receiving benefits have very low saving rates). The money that they get is money they spend, injecting it back into the economy.

The same GAO report informs us that 40 percent of those who exhausted their benefits earned less than $20,000 in 2012.

Additionally, many conservatives lump unemployment insurance together with their understanding of the welfare state. They argue that these programs create a moral hazard – that is, they discourage unemployed individuals from finding a job.

This argument likewise does not hold water. State benefits run out after about six months. Federal benefits, if extended, will allow them to run out at nine months. Either way, there is a sunset on benefits. This pairs well with the fact that unemployed individuals find a job by month eight, on average.

Moreover, unemployment benefits do not incentivize individuals to lose their job. Indeed, only people who were let go through no fault of their own are eligible.

Lastly, most states’ unemployment insurance programs pay less than 50 percent of what someone was previously earning. Thus, some ask the question: Can you live on $330 per week?

It seems easy, but the weekly cost of attending Stanford is about six times that, at $1,840.

***

Republicans talk about the poor pulling themselves up by their bootstraps. This is certainly a lofty aim and one consistent with American individualism. But more often than not, boots don’t come with poverty, especially not boots with straps.

Cutting off unemployment insurance cuts the straps off two million more boots.

Congress should first pass this temporary extension.

Then they should focus on making federal benefits a more permanent institution. This policy is founded upon the principle that as a nation, we should agree to give a helping hand to those knocked down. This means that federal benefits should be extended at least two months. The system should be structured such that hardworking employed people – who therefore are paying into the insurance system – should, on average, not have to go one week without money for food.

It seems that enabling individuals to get back on their feet should be a policy that Republicans and Democrats alike would stand behind. There is more as a nation that we can do, but this is a good start.

Contact Nick Ahamed at nahamed@stanford.edu.

About Nick Ahamed

Nick Ahamed is the Managing Editor of Opinions for Volume 246 of The Stanford Daily. He previously served as a political columnist. He is a senior from Minneapolis, Minn. majoring in Political Science. Contact him at nahamed@stanford.edu for personal emails or opinions@stanforddaily.com to submit op-eds.
  • disgustedwithcongress

    It is appalling that a bill extending EUC cannot be agreed upon in the Senate and “fast tracked” to the President for signature. I believe that letting EUC expire in December for so many displaced Americans is not only wrong, it is just plain negligent. I find it absolutely amazing that the Senate and the House cannot come to terms and find common ground to resolve this growing issue. A staggering amount of displaced Americans, 1.6 million and growing by 70,000 daily, are now faced with defaulting on mortgages, car loans, etc. Vehicles are being re-possessed, people cannot put food on their tables to feed themselves or their CHILDREN. In the midst of one the coldest and snowiest winters in years, this in unconscionable. People are struggling to pay heating costs and put fuel in their vehicles or take public transportation. Many of these very same people, especially in the South, Northwest and Northeast, have faced crippling storms with major long term power outages. The outlook doesn’t look any better for those in the South and Northeast as another major storm is heading their way. These storms not only affect the unemployed, but the employer / businesses as well. Hiring gets put on the back-burner as businesses focus on getting up and running after the storm. Every storm can cause a delay of at least a week in the hiring process.
    John Boehner and his fellow Republicans opposed the latest plan, yet offered no plan of their own. What Congress fails to realize is that even if the extension were to be signed by the President TODAY, it would still take approximately 2 weeks for the states to process claims and issue checks.

    When the extension is finally executed, the Republicans will be all full of themselves, patting themselves on the back and telling the displaced American worker how much THEY helped. Then they will have the audacity to ask those very same displaced workers for their votes.

    John Boehner and this Congress are well on their way to solidifying their legacy as THE ABSOLUTE WORST CONGRESS IN U.S. HISTORY! A distinct honor indeed.

    The Republican stance is to create jobs and reduce / cut off social programs.
    For instance Rep. James Inhofe (R, OK) had this to say:
    “We can get Americans back to work and our economy booming again, but this is not achieved by Washington turning a temporary federal benefit into another welfare program.”
    I’m all for creating new jobs. I challenge Rep. Inhofe and his Republican colleagues to pass a bill that would create jobs for the 1.7 million workers that lost EUC, have it signed by the President, have the unemployed in a job receiving paychecks in a week.
    The Republicans have countered that EUC has been extended 11 times. Why has it taken until the 12th time for them to all of a sudden hold it hostage for job creation? Why wasn’t it addressed during the previous 11 extensions?

    I urge BOTH PARTIES to reach across the aisle, find common ground and get this bill done and on the Presidents desk immediately.

  • Robin B Langley

    I agree with you. I live in the great state of South Carolina which belives that unemployment should only have 20 weeks, not the 26 of most states. I have been unempoyed since the end of July and ran out at the end of December. Since then I have run out of money and have not been able to put gas in my tank to have heat in my house. I was using two small infrared heaters and my son told me that as the temps were going down to the teens that I needed to come stay at his house until either the unemployment benefits are reinstated or I can find a job. In addition I was told as I made $1251.00 I was no longer eligible to receive food stamps because I made $6.00 too much. However, as I have had no money since December I was told I would hve to reapply for food stamps and as of the mid point in February still have no money for bills nor groceries. No money to put gas in my vehcile to work. So when I call my local community action I am told try salvation army or lighthouse ministries. Why can I not get assistance like so many others who are on welfare for years? I have not stopped looking for work, but the lifeline I thought would help is not cutoff. I am being told by Congress that I am lazy for not finding a job. What about the employer that has an ad for hiring that I have applied to three times and been rejected three times saying hthey decided to heire someone else, yet the ad is still there? What the heck is “overqualified” when there is no money coming in at all?

  • disgustedwithcongress

    Another aspect the expiration of EUC caused is the far reaching impact on the credit cards, auto finance and loans. As the unemployed struggle to meet basic needs such as heat, water, food, fuel, they are trying desperately to not let loans g over 30 days. Many are not succeeding and seeing their interest rates being jacked up to the maximum, credit reports damaged, and defaults. While Congress “earns”, and I use that term very loosely, their six figure salary, they are keeping their pristine credit profile intact. The fact that they left for holiday break and have been in recess almost as much as being in session without dealing with this issue is sickening.
    I am also very disheartened about the silence coming from the House on this issue. Outside of John Boehner continuing to beat the drum about the Affordable Care Act, nothing but crickets. The Affordable Care Act is law now. Unless the Republicans have a viable alternative, give it a rest. That horse is already out of the barn.
    Boehner is doing nothing but obstructing and has insinuated that even if EUC passes in the Senate, it will get stalled in the House. Where are the voices of all the Democrats in the House supporting the bill to extend EUC? More time is being spent on conniving ways to maintain their majority than actually doing something constructive for the people that sent you there. I would guess that maintain a Republican majority will be more difficult as time goes by. The fact that this Congress has such a low approval rating, and dropping, will make it more challenging for Republicans and Tea Party candidates in states races to win.
    I would urge the Dems in the House to raise your voices and join your Senate colleagues. I would urge the Republicans to see the damage and pain they are inflicting on their constituents and support EUC.

  • Rickypress19

    If boehnor lets the bill sit whats the reality of it getting past ever??

  • kasia54

    41 years voting as a Republican. No more. If these imbeciles think they aren’t hurting their party, they should hire someone to follow the comments made to these articles reporting on extending EUI. So many of us will be voting against them and we are millions!