[Congressional Record Volume 156, Number 156 (Thursday, December 2, 2010)]
[Senate]
[Pages S8382-S8383]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EXTENDING UNEMPLOYMENT INSURANCE
Mr. CASEY. Madam President, I rise today to talk about unemployment
insurance, and I will be brief. At the end of my remarks I will be
offering a unanimous consent request.
First of all, I wish to cite a study just released today by the
Council of Economic Advisers.
I commend to my colleagues this report entitled ``The Economic Impact
of Recent Temporary Unemployment Insurance Extensions'' dated December
2, a report by the Executive Office of the President and the Council of
Economic Advisers.
I ask unanimous consent that the Executive Summary of the report be
printed in the Record at the conclusion of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. CASEY. This report released today had a number of findings: First
of all, that the emergency expansion of unemployment insurance programs
in 2007 has benefited 40 million people in the United States of America
who have either received or lived with a recipient of these programs.
This figure includes 10.5 million children.
In line with other studies that have been released, this report by
the Council of Economic Advisers states that there are 800,000 more
jobs and GDP is 0.8 percent higher because of the expansion of
unemployment insurance programs. Without reauthorization through 2011,
the one we are debating today in the Senate, at this time next year, in
December of 2011, there will be 600,000 less jobs and GDP will be 0.6
percent lower. So there are real consequences to the denial of this
reauthorization going forward.
To give my colleagues a sense of what that means in a State such as
Pennsylvania, without reauthorization of these programs, 353,989 people
will lose unemployment insurance coverage by November of 2011. The
Pennsylvania economy will be severely impacted without reauthorization.
According to the Council of Economic Advisers, there will be 31,228
less jobs in the Commonwealth of Pennsylvania if we do not reauthorize
unemployment insurance.
Just to put that in perspective, in the first three quarters of this
year, in the midst of a recovery--slow recovery but a recovery
nonetheless--our State has gone from losing jobs in 2009 to gaining
jobs. In the first three quarters of the year, we have gained roughly
48,000 jobs. Without unemployment insurance, we stand to lose, as I
said, more than 31,000 of those jobs.
We know the unemployment rate of 9.6 percent nationally means nearly
15 million people are out of work. If you are opposed to this
reauthorization, you have to come up with another answer. You can't
just say to 15 million people: Well, we couldn't get it done, or things
interfered in Washington.
In our State, fortunately, we are lower than 9.6. We are 8.8,
percent. But 8.8 percent in Pennsylvania means that 560,000 people are
out of work. It ballooned up to over 590,000 this summer, but
fortunately that has been coming down over the last couple of months
and, of course, we want to keep it moving in that direction.
Let me just conclude with this thought: For the past six decades,
Congress has provided federally funded unemployment insurance benefits.
During every recession, the Congress has done that, and thank goodness
they did. Finally, without this reauthorization in our State of
Pennsylvania, 83,000 Pennsylvanians will exhaust their benefits this
month. Of course, across the country, it is some 2 million.
Exhibit 1
The Economic Impact of Recent Temporary Unemployment Insurance
Extensions
EXECUTIVE SUMMARY
Unemployment insurance (UI) provides a safety net for
workers who have lost a job through no fault of their own, as
long as they continue to search for new employment. During
normal economic conditions, firms pay into state insurance
systems that replace roughly half of the average individual's
lost earnings, up to 26 weeks. However, the federal
government historically funds additional weeks of benefits in
response to an economic downturn. The benefits allow
recipients to continue to support their families while
searching for their next job.
In response to the recession that began in December 2007,
Congress expanded UI benefits by creating Emergency
Unemployment Compensation (EUC) and 100 percent federal
funding of Extended Benefits (EB). These programs provide UI
benefits after a worker exhausts state benefits, helping when
it takes longer to find a job, such as in this severe
downturn. These extensions began to expire on November 30,
2010. In this report, the Council of Economic Advisers (CEA)
examines the effects of the extensions thus far and the
potential impact on the economy if Congress fails to act soon
to continue these emergency measures.
As a result of these emergency expansions to UI:
EUC and EB have helped 14 million unemployed workers as of
October 2010. As of that date, there were almost 5 million
unemployed workers benefiting from these programs each week.
In total, these programs have benefited about 40 million
people who have received, or lived with a recipient of, EUC
or EB. This total includes 10.5 million children.
If these measures are not extended, the maximum eligibility
for benefits in most states will revert to the pre-
recessionary level of 26 weeks. The Department of Labor
estimates that, relative to a month-long extension, 2 million
unemployed workers will lose coverage in December 2010. And,
relative to a year-long extension, nearly 7 million
unemployed workers in total will lose coverage by November
2011.
Further, EUC and EB make up a substantial portion of
household income. Without EUC and EB, the typical household
receiving these benefits will see their income fall by a
third. In the 42 percent of households where the EUC or EB
recipient is the sole wage-earner, 90 percent of income will
be lost.
This important income replacement allows individuals that
have suffered from job loss to avoid a dramatic drop in their
spending levels. Research studies have documented that UI is
an extremely effective form of support for the economy
relative to other government programs, both in terms of bang-
for-the-buck and timeliness. EUC and EB recipients spend
their benefit checks, rather than saving them, and a drop in
this income will translate into a sizeable drop in aggregate
spending.
Specifically, CEA estimates that:
Employment was about 800,000 higher, and the level of GDP
0.8 percent higher, in September 2010 than would have been
the case without EUC and EB.
Without an extension, employment would be about 600,000
lower, and GDP 0.6 percent lower, in December 2011 than if a
year-long extension were passed.
Previously, Congress continued federal expansions of UI
until the economy was much further along the road to
recovery. With 10 consecutive months of private sector job
growth and half a percentage point drop in the unemployment
rate since its peak, the economy is beginning to recover.
However, the unemployment rate remains at 9.6 percent and
there are still 5 job seekers for every job opening. For the
last half-century, Congress has consistently extended UI
benefits when economic circumstances substantially increased
the difficulty of finding a job. Given the current labor
market conditions, failing to continue UI extensions now
would be unprecedented.
I. INTRODUCTION
As a form of insurance against job loss, employers pay
taxes into state government unemployment systems at rates
based, in part, on past usage of the system. State
governments then provide weekly payments of $300, on average,
to workers who have lost a
[[Page S8383]]
job through no fault of their own, replacing roughly half of
an individual's lost earnings. Typically, unemployed workers
can receive up to 26 weeks of benefits, as long as they
continue to search for work. In an economy with normal labor
demand, one would expect most unemployed workers to find a
job within this time frame. However, in December 2007 the
United States began to slide into a deep recession. By
October 2009, the unemployment rate was 10.1 percent, and
there were more than 6 jobs seekers for every job opening,
compared to just 1.5 prior to the recession.
Recognizing that unemployed workers would have a
significantly harder time finding jobs, Congress created
Emergency Unemployment Compensation 2008 (EUC) in June of
that year. This swift action put unemployment benefits in
place much earlier than has been done in previous
recessions--almost one year before GDP stopped declining.
These early efforts by Congress resulted in UI playing a
greater role in stabilizing the economy, as suggested in a
recent Department of Labor report.
As the labor market worsened, Congress further extended and
expanded the program, particularly for unemployed workers in
the hardest-hit states. As part of the American Recovery and
Reinvestment Act, Congress provided for 100 percent federal
funding of Extended Benefits (EB), a program usually funded
jointly by the state and federal governments. Individuals are
eligible for EB once they exhaust their EUC benefits if their
state meets certain unemployment-based triggers. All told, an
unemployed worker could receive up to 99 weeks of coverage in
those states with the highest rates of unemployment. (See the
Appendix for more detail on these programs.)
Importantly, the current tiered structure of EUC and EB
allows for a natural phasing down of coverage as economic
conditions improve. Many of the eligible weeks of benefits
are determined at the state level by thresholds based on
states' unemployment rates; the maximum length of coverage
provided by these federal programs is shorter in states with
better economies. Beyond this natural phase down, however,
the legislation authorizing these programs began to expire on
November 30, 2010 and the millions of Americans receiving
coverage through these programs have already begun losing
benefits.
Unanimous-Consent Request--S. 3981
Mr. CASEY. So with that, I ask unanimous consent that the Finance
Committee be discharged from further consideration of S. 3981, a bill
to provide for a temporary extension of unemployment insurance
provisions; that the Senate proceed to its immediate consideration;
that the bill be read a third time and passed; and that the motion to
reconsider be laid upon the table, with no intervening action or
debate; and any statements related to the bill be printed in the
Record.
The PRESIDING OFFICER. Is there objection?
Mr. ENSIGN. Madam President, reserving the right to object, because
the Republicans want to extend unemployment benefits without increasing
the deficits, would the Senator agree to include an amendment proposed
by Senator Brown that would offset the cost of the bill with unspent
Federal funds, the text of which is at the desk?
Mr. CASEY. I would not. I object to that for the simple reason that
the construction of that amendment involves dollars already allocated
to Federal programs across the board. Although the money has not been
spent yet, it has been allocated. If there is a concern, as there seems
to be--and I would categorize it as an alleged concern--about the
deficit, there doesn't seem to be the same concern about running up the
deficit not by billions but by hundreds of billions to extend tax cuts
to Americans above the $250,000 income tax bracket. So if there is that
concern about the deficits, I wish that logic and concern was applied
to the tax cut debate.
Mr. ENSIGN. Further reserving the right to object, first of all, I
would love to offset the tax cuts with spending reductions in areas
across the board because I think the deficit is a problem. Because the
Senator from Pennsylvania just wants to increase the deficit with
unemployment benefits, without offsetting it, without spending cuts, I
am forced to object.
The PRESIDING OFFICER. Objection is heard.
Mr. CASEY. I yield the floor.
The PRESIDING OFFICER. The Senator from Nevada is recognized.
(The remarks of Mr. Ensign pertaining to the introduction of S. 4004
are located in today's Record under ``Statements on Introduced Bills
and Joint Resolutions.'')
The PRESIDING OFFICER. The Senator from Iowa.
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