Herald-Leader Editorial

Help economy and extend jobless aid; in Ky., 38,000 have lost ther lifelines

January 7, 2014 

When Congress passed its two-year budget deal just before the winter recess, it failed to include an extension for long-term unemployment benefits put in place during the recession. The program's expiration Dec. 28 cut the lifelines for 1.3 million Americans, including 38,000 Kentuckians who received jobless benefits beyond six months.

That not only damages the livelihoods of millions of families but stifles the sluggish economic growth after the Great Recession and not-as-great recovery.

We hope Congress reverses course from yet another self-imposed blow.

A test vote in the Senate on a three-month extension was scheduled late Monday. Clearing the 60-vote hurdle in the Senate, although difficult, is not as troubling as the legislation's future in the House, where Speaker John Boehner, R-Ohio, and his Republican colleagues insist on offsetting cuts that are deficit-neutral.

But that deficit hawkishness, also endorsed by Sen. Mitch McCon nell, misunderstands the immense economic consequences of the cuts.

Most of the $290 a week that Kentucky families receive from the extended benefits goes back into the economy almost immediately — boosting consumer spending and economic growth.

A study from JPMorgan Chase predicted that the extended jobless benefits expiration would reduce economic growth by 0.4 percent.

This isn't an indefinite extension of federal funds. The extended unemployment coverage kicks in only after state unemployment programs are up, usually a period of 26 weeks. The additional time provided by the federal government is based on a state's jobless rate — usually an additional six-month period.

Contrary to what some might think, cutting off these benefits will not end unemployment. The cash payouts are far too little for the jobless to luxuriate in, and employers probably are not going to see impending starvation as a positive qualification. Our very own Sen. Rand Paul declared the extended benefits a "disservice" to the jobless because employers are less likely to hire the long-term unemployed. Over the weekend, he softened his position to say he could support the extension if budget cuts paid for it.

While Paul is empirically correct about employment practices, the problem is not a sudden epidemic of laziness among Americans that incentivizes them to eke out a meager existence on less than $300 a week, but the result of a depressed economy in which there still are three unemployed people for one job opening.

Research by Henry Farber, a Princeton economist, and Robert Valletta, an economist with the Federal Reserve Bank of San Francisco, found that lengthened unemployment benefits had little effect on job-finding rates, contradicting the wisdom of the "tough love" solution to the plight of the unemployed.

North Carolina has cut state unemployment benefits drastically and even rejected federal unemployment benefits but has yet to see any increase in jobs for all its increase in misery. Constructing a morality play to contradict economic realities is ultimately not helpful to the unemployed who are most directly affected and to the rest of us who are indirectly affected by the country's economic health.

Many Democrats and some Republicans have said they're committed to extending the federal unemployment benefits — a plan that a majority of Americans supports. We hope that sensible compassion beats out miserliness.

Lexington Herald-Leader is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service