[Congressional Record Volume 156, Number 56 (Tuesday, April 20, 2010)]
[Extensions of Remarks]
[Pages E582-E583]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    CONTINUING EXTENSION ACT OF 2010

                                 ______
                                 

                               speech of

                            HON. JOHN LINDER

                               of georgia

                    in the house of representatives

                        Thursday, April 15, 2010

  Mr. LINDER. Mr. Speaker, the legislation before us would extend for 
another 2 months special Federal programs that today mean unemployed 
workers can collect up to 99 weeks of benefits in most States. This 
compares with a total of up to 26 weeks of benefits in almost all 
States during normal times. Other Members note the massive expense of 
all this spending, which would grow by another $18 billion in just the 
next 2 months. None of it paid for, just as none of the more than $100 
billion in ``emergency'' Federal unemployment spending has been paid 
for since this program began in mid-2008.
  But stepping back, what are those 73 weeks of additional benefits, at 
a cost now of $7-8 billion per month, buying American workers and 
taxpayers? The answer is a whole lot of disincentives to work, 
according to recent articles.
  The April 13 Wall Street Journal (``Incentives Not to Work: Larry 
Summers v. Senate Democrats on jobless benefits'') put it this way, 
summarizing the effect of unemployment benefits on returns to work:

       The second way government assistance programs contribute to 
     long-term unemployment is by providing an incentive, and the 
     means, not to work Each unemployed person has a `reservation 
     wage'--the minimum wage he or she insists on getting before 
     accepting a job. Unemployment insurance and other social 
     assistance programs increase [the] reservation wage, causing 
     an unemployed person to remain unemployed longer.'' Any guess 
     who wrote that? Milton Friedman, perhaps. Simon Legree? 
     Sorry. Full credit goes to Lawrence H. Summers, the current 
     White House economic adviser, who wrote those sensible words 
     in his chapter on ``Unemployment'' in the Concise 
     Encyclopedia of Economics, first published in 1999.

  The experts at the Brookings Institution have reported that these 
unemployment extensions ``correspond to between 0.7 and 1.8 percentage 
points of the 5.5 percentage point increase in the unemployment rate 
witnessed in the current recession.'' So even if you accept the low end 
of the estimate, unemployment would be 9 percent instead of today's 9.7 
percent rate. At the other end, the unemployment rate might be below 8 
percent but for the effect of extended unemployment benefit extending 
and thus increasing unemployment.
  And in case my colleagues on the other side say these effects only 
matter when unemployment is low and jobs are plentiful, guess again. As 
noted by the scholar Amity Shines this past week, ``Two scholars, 
Stepan Jurajda and Frederick Tannery, looked at Pittsburgh in the first 
half of the 1980s, a period when the Nation had two temporary increases 
in unemployment benefits. They determined that one third of those 
claiming unemployment found work within weeks of the expiration of 
their benefits, but not before.'' And that was when Pittsburgh had 
unemployment rates far above the US average today, suggesting that the

[[Page E583]]

benefits and not the unemployment rate are reason behind extended and 
increased unemployment.
  Mr. Speaker, we can do better than this. What unemployed workers 
really want are jobs and paychecks. We need to start over and do the 
things that really help create jobs for unemployed workers. That means 
repealing Democrats' government health care takeover law and scrapping 
their energy tax hike plans. It means extending expiring tax cuts on 
businesses and individuals and ending wasteful stimulus spending. And 
it means committing to not increase any tax until the economy has fully 
recovered.

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