Washington – Congress is braced for a new, unpredictable battle this week over whether to fund more aid for jobless workers as an estimated 1.2 million people face having their benefits cut off next month unless lawmakers act.
The debate, expected to begin Tuesday in the House of Representatives, will be the third time this year that these provisions have faced expired funding.
In the first two instances, Congress initially balked, as some Republicans were upset the spending wasn’t paid for with spending cuts. At one point in early April, Congress left for a 16-day spring recess without funding the benefits, leaving unemployed workers uncertain when they’d get checks.
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They eventually did, but the extension Congress approved then expires on June 2. Lawmakers are scheduled to leave Friday for a Memorial Day recess and won’t return until June 1.
This time, the prospects are getting dicey: An estimate by the Congressional Budget Office says passing the measure will add $133.7 billion to the deficit over 10 years and states, which filled the gap in coverage last time, now are more strapped by falling tax revenue.
At the National Employment Law Project, a liberal-leaning activist group that Monday provided the 1.2 million estimate, lobbyist Judy Conti said “it’s anybody’s guess” what Congress will do this time.
Maurice Emsellem, the group’s co-policy director, said that if Congress doesn’t act soon, some states could find themselves in worse straits than when they stepped in before to provide benefits for 13 to 20 weeks.
“This time around, there are fewer states in that situation,” Emsellem said. “The states will have to plan around the extensions not coming.” About 9.8 million people are collecting jobless benefits. While many could have their benefits disrupted if Congress fails to act, they are expected to get paid retroactively.
What concerns moderate Democrats, as well as most Republicans, is the estimate by the nonpartisan CBO that passing the jobless plan, which includes several other provisions, could increase the federal deficit by about $133.7 billion over 10 years. Most of the added burden would come this year and next.
“We have to start taking concrete steps to curb unnecessary deficit spending, and that means taking a close look at anything that is not offset or that we designate as emergency. I am hearing strong concerns about voting on a package with such a large price tag,” said Rep. Stephanie Herseth Sandlin of South Dakota, a key centrist Democrat.
Leading Democrats insist the money is needed because of the economic troubles and therefore legitimately can be added to the deficit. The April unemployment rate was 9.9 percent, up from 9.7 percent during the first three months of this year. Last month, 15.3 million people were unemployed.
“This is a bill about creating jobs, preventing outsourcing of jobs overseas, closing loopholes of corporations and wealthy individuals from avoiding U. S. taxes and meeting the needs of those who have lost their jobs through no fault of their own,” said House Speaker Nancy Pelosi, D-Calif.
To Republicans and moderate Democrats, however, the deficit increase sounds like another retreat from President Barack Obama’s February pledge to invoke a “pay as you go” requirement on many major programs.
“The American people know we can’t tax and spend our way back to a growing economy,” said Rep. Mike Pence of Indiana, the House Republican Conference Chairman.
Lobbyist Conti said the moderate-to-conservative Blue Dog Democrats in the House might resist supporting extensions because of the potential impact on the federal deficit. In the Senate, she found it questionable whether there are 60 votes to approve extending benefits.
CBO predicts that under Obama’s entire budget plan, the deficit should hit $1.5 trillion this fiscal year and $1.34 trillion next year. Over the next decade, CBO projects deficits totaling about $9.755 trillion.
The bill the House could consider Tuesday would extend extra jobless benefits for people out of work for an extended period of time until Dec. 31. In addition, the government would help unemployed people pay for their health care benefits.
Businesses could benefit from extensions of expiring tax breaks, such as the research and development credit, and physicians would see their reimbursement rates for Medicare patients, now scheduled for a 21 percent cut, be cut back far less.
Few of these programs are paid for, however. Most of the higher taxes involve new ways of taxing multinational corporations and wealthy investment fund managers.