Unemployment Benefits For 99 Weeks is Not Tradition

Wednesday, January 25th, 2012 and is filed under Blog

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House and Senate negotiators are working on a conference report, which deals with three major issues; the temporary payroll tax cut, extension of unemployment insurance, and extension of Medicare reimbursement payments to healthcare providers.   Earlier this week, Democrat Congressman Henry Waxman told Roll Call that he is against the idea of paying for super-long unemployment benefits.  He asserted that “unemployment benefits have traditionally been covered on an emergency basis without offsetting savings. That should be our guide here.”

Mr. Waxman is forgetting one thing: unemployment benefits come from an insurance program, one that is purveyed by employer payroll taxes for every worker.  Those taxes are only sufficient to support 26 weeks of UI benefits.  Yes, during times of economic downturn, the federal government has an emergency program to supplement state UI programs with an additional 13 weeks of benefits.  Even during the worst recession, UI benefits never surpassed 60 weeks.

Last year, Congress made the unprecedented decision to extend a whopping 99 weeks of UI benefits for an entire year.  Now, Democrats want to extend the 99 weeks indefinitely.  This is no longer an insurance program; it is rapidly becoming a new permanent welfare program.  Over the past three years, the federal government has collected roughly $135 billion in taxes, while paying out $416 billion in benefits.  UI is becoming our fourth largest mandatory expenditure, right behind Social Security, Medicare, and Medicaid.

Super-long unemployment benefits serve as perverse incentives for people to look for work.  They should not be extended longer than their revenue source permits.  Yet, people like Waxman believe they should be extended, even without offsets.

No, Mr. Waxman, 99 weeks of unemployment benefits is not part of our tradition.  In fact, the concept never existed until last year.

As an aside, aren’t the Democrats claiming that the economy is roaring back to life?  Why are they talking about emergency unemployment benefits?