Committee on Ways and Means 

For Immediate Release
Contact: Press Office 202-225-8933
September 17, 2002

Republicans Have Provided Unprecedented Help to the Unemployed

Republicans acted swiftly to extend and expand unemployment benefits.
  • The March 2002 “Job Creation and Worker Assistance Act” provides:
  • up to 13 weeks of extended unemployment benefits in every State;
  • up to 13 added weeks of extended benefits in high unemployment States (AK, AR, CA, ID, MA, NV, NJ, OR, PA, WA, WI have qualified to date); and
  • $8 billion in surplus Federal unemployment funds to States.
  • An estimated 2.8 million people already have benefited from extensions, which about 1.1 million people per week continue to collect. Total cost: $11 billion.
  • Extended benefits remain available through December 2002.
  • Congress also recently passed an $11 billion expansion of Trade Adjustment Assistance for workers who lose jobs due to foreign competition.
  • In total this Congress provided $19 billion in immediate support for unemployed workers, plus $11 billion through 2012 in trade-related benefits.

Despite this unprecedented support, for some politicians it’s never enough.
  • Even though extended benefits remain available for another 3 months, Sens. Kennedy and Clinton and Reps. Rangel and McDermott already are calling for further extensions and expansions so unemployment benefits last 12 months nationwide and 18 months or longer in some States - well beyond "temporary" support.
  • The Kennedy and McDermott bills mandate up to 25 percent larger benefit checks and pay unemployment benefits to part-time workers, at a cost of $40 billion or more.
  • There is no free lunch. Despite what proponents say about benefits’ being “paid for,” higher benefits today require higher taxes (or reduced benefits) tomorrow.

Providing longer extended benefits would lead to more and longer unemployment.
  • Various studies - including one by the chief economist in the Clinton Department of Labor - show longer benefits lead to more and longer unemployment.
  • As the New York Times reported, “The expiration of benefits typically helps the economy, forcing people to find work eventually and preventing unemployment stretches from reaching the length they do in Europe, where benefits are more generous, economists say.” (September 9, 2002)

Extended benefits remain available and economic conditions are improving. Compared to prior recessions, arguments for continued extensions are weak.
  • Extended benefits remain available through December 2002 - another 3 months.
  • Initial unemployment claims have fallen from their peak of 492,000 in March.
  • August’s unemployment rate of 5.7% is lower than the 7.4% rate at this point in the early 1990s recession, and far lower than the 10.4% rate in the early 1980s.
  • There are fewer long-term unemployed now (1.6 million) than in early 1990s recession (2.1 million), despite an 11 percent rise in employment since then.
  • In the 1980s and 1990s recessions when the Democrats were in the majority, Congress never approved benefit extensions when the unemployment rate was as low as the current 5.7 percent level. Extensions occurred only at higher jobless rates.

 

BACK to Committee on Ways and Means