Relief of the job­less

The Washington Times Weekly - - Editorials -

Pres­i­dent Obama re­turned Sun­day from his 16day Hawai­ian va­ca­tion to a cap­i­tal in the grip of a “po­lar vor­tex.” On Satur­day, be­fore say­ing “aloha” to the Kailua va­ca­tion house he rented for $56,000, he wanted to show him­self as a man of the peo­ple, many of whom be­came un­em­ployed un­der his econ­omy.

“Just a few days af­ter Christ­mas,” said Mr. Obama, “more than 1 mil­lion of our fel­low Amer­i­cans lost a vi­tal eco­nomic life­line, the tem­po­rary insurance that helps folks make ends meet while they look for a job. Repub­li­cans in Congress went home for the hol­i­days and let that life­line ex­pire.” The pres­i­dent him­self was first to leave town, more than a week be­fore the ex­pi­ra­tion of ben­e­fits, but he in­sists nev­er­the­less that “deny­ing” an ex­ten­sion “is just plain cruel.” (Just not as cruel as his miss­ing his flight aboard Air Force One would have been.)

Since the Great Re­ces­sion be­gan in 2008, Congress has sup­ple­mented the 26 weeks of job­less ben­e­fits tra­di­tion­ally pro­vided by the states, ex­tend­ing them to 99 weeks. Or­di­nar­ily, this wouldn’t be an is­sue be­cause such ex­ten­sions have been tem­po­rary, but Mr. Obama’s econ­omy has spawned a job­less “re­cov­ery,” and more work­ers con­tinue to join the un­em­ploy­ment line. Democrats see this not as an op­por­tu­nity to re­con­sider the fail­ure of Oba­ma­nomics, but as an ex­cuse to spend another $25 bil­lion. The Se­nate will vote this week on a three-month ex­ten­sion with a $6.5 bil­lion price tag.

As a prac­ti­cal mat­ter, Repub­li­cans won’t take a prin­ci­pled stand against a ben­e­fit pro­gram. The ques­tion is whether the bil­lions spent sub­si­diz­ing un­em­ploy­ment will be off­set by spend­ing cuts, or whether the ex­tra bil­lions will be added to the $17.3 tril­lion in na­tional debt, as Democrats pro­pose to do by declar­ing the un­em­ploy­ment ex­pense an “emer­gency” ex­empt from the spend­ing caps. This des­ig­na­tion is un­nec­es­sary, as Sen. Tom Coburn, Ok­la­homa Repub­li­can, says. His “Waste­book 2013” chron­i­cles 100 ex­am­ples of waste­ful fed­eral gov­ern­ment spend­ing, to­tal­ing $30 bil­lion, more than enough to off­set a full year’s job­less ben­e­fits.

There’s a neg­a­tive con­sid­er­a­tion to ex­tend­ing un­em­ploy­ment sub­si­dies time af­ter time. A 2008 Prince­ton Univer­sity study comes to the ob­vi­ous con­clu­sion that work­ers are much more ag­gres­sive in their job searches as their ben­e­fits near the end, “in­creas­ing sharply in the weeks prior to ben­e­fit ex­haus­tion.” Alan B. Krueger, a for­mer chair­man of Mr. Obama’s Coun­cil of Eco­nomic Ad­vis­ers, was a co-au­thor of the re­port. A Swedish study, fin­ished in 2008 as well, con­cluded that more gen­er­ous un­em­ploy­ment ben­e­fits in­creased un­em­ploy­ment rates. The link­age, it said, is “fairly ro­bust.”

The year be­fore, Swe­den re­formed its un­em­ploy­ment com­pen­sa­tion sys­tem, such that re­cip­i­ents could re­ceive up to 60 weeks of ben­e­fits, but with a catch. The longer some­one is un­em­ployed, un­der the new pro­gram, the less he re­ceives in as­sis­tance. The di­min­ish­ing ben­e­fits have been a pow­er­ful in­duce­ment to look for work. Nei­ther Swe­den nor any­where else in Europe usu­ally come to mind as guid­ance on eco­nomic or so­cial pol­icy, but if law­mak­ers are cor­nered by pol­i­tics into en­dors­ing an ex­ten­sion, they should con­sider do­ing it Swedish-style.

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