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July 1, 2010 Thursday 2:06 PM EST
SECTION: NEWS & COMMENTARY; Economy and Politics; Capitol Report
LENGTH: 584 words
HEADLINE: Jobless benefits snagged in spending debate
BYLINE: Robert Schroeder, MarketWatch mailto:email@example.com.
Robert Schroeder is a reporter for MarketWatch in Washington.
WASHINGTON (MarketWatch) — More than 1.3 million jobless workers won’t get unemployment benefits reinstated before members of Congress leave for their weeklong July 4th recess. How will the lawmakers who voted against sending the checks face up to their constituents?
The answer, if that lawmaker is a Republican, is: by telling those constituents that the unemployment bill isn’t paid for and will worsen the already-huge national debt. Democrats, meanwhile, will counter at Independence Day barbeques and other events around their districts that the benefits are needed as Americans struggle to recover from the recession.
The jobless benefits bill stalled in the Senate on Wednesday night, falling just one vote short of the 60 needed to cut off a Republican filibuster. Democratic Leader Harry Reid said the Senate will vote again after a replacement is named for the late Sen. Robert Byrd, a longtime West Virginia Democrat.
The House is scheduled to vote as soon as Thursday on the same bill. But even if the House approves the measure, workers wouldn’t get their checks since both chambers need to pass the bill.
The benefits bill has gotten snagged in a hot election-year debate over federal spending, just as congressional analysts say the U.S. debt is on track to hit a whopping 62% of gross domestic product by the end of 2010 — the highest since just after World War II.
But the move by Democrats to restore benefits to those out of work for more than six months also comes as the Labor Department is expected to report on Friday that payrolls declined in June. The unemployment rate remains stuck at 9.7% — just below a 27-year peak.
There’s certainly political risk in not approving unemployment benefits, especially in an election year. But there may also be risk in passing bills that add to the debt.
According to a June Wall Street Journal/NBC News poll, 34% of Americans would be enthusiastic if a candidate for Congress supports cuts in federal spending. So Republicans may be able to argue successfully that rejecting unpaid-for benefits is better for the nation’s finances.
“The only reason the unemployment extension hasn’t passed is because Democrats simply refuse to pass a bill that doesn’t add to the debt,” said Senate Republican Leader Mitch McConnell, according to the Associated Press.
In a recent MarketWatch poll, 32% of respondents said it’s most important for the president and Congress to create jobs over the next year. By contrast, 24% said cutting the federal budget deficit was the top issue.
To be sure, Democrats are worried about the debt, also. Speaking in Wisconsin on Wednesday, President Barack Obama said: “We’ve got to get our debt and our deficits under control.” But he added it must be done in a “gradual way.”
Following a meeting with Federal Reserve Chairman Ben Bernanke on Tuesday, Obama said he and the Fed chief emphasized “dealing with folks who need help,” and that passing unemployment insurance, among other things, will help the economy.
Unemployed Americans will agree with that. But the risk for Democrats is that, over the longer term, Americans may also agree that their government spends too much money.
The spending debate isn’t going to be settled soon. But what’s maddeningly certain for both parties is that it’s going to be tough to save money and help the unemployed. Which is apparently just what Americans want.
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