Commentary Magazine


Topic: unemployment insurance benefits

Democrats Sacrifice Unemployed Pawns

On yesterday’s Sunday news shows, Democrats doubled down on their preferred issue of the new year: income inequality and unemployment insurance. Both Senate Majority Leader Harry Reid and senior Senate Democrat Chuck Schumer railed at Republican opponents of extending unemployment benefits and sought to portray the GOP as a conclave of heartless Scrooge McDucks chuckling while the jobless suffer. This is good politics for liberals, whose New Year’s resolution was to do everything in their power to change the national political conversation from the ObamaCare debacle, as well as good television. Given the popularity of these proposals, the discussion about the course of the debate has largely followed the lines Democrats like. Thus, the reluctance of most congressional Republicans, especially the leadership of the House of Representatives, to act on President Obama’s proposal to again extend unemployment insurance plays into themes that work well for Democrats such as fairness, conservative apathy about the “47 percent” who get federal benefits (to use Mitt Romney’s infamous and foolish formulation), and a “do-nothing Congress” led by a dysfunctional Republican Party.

It’s debatable whether Republicans are doing themselves a favor by opposing the president on issues where he and his allies can appear to claim the high moral ground. But there are two main problems with this strategy for the Democrats. One has to do with how much traction these liberal talking points really have with the electorate in a midterm election year in which Democrats are defending far more competitive House and Senate seats than their opponents. The other goes to whether Democrats are actually serious about helping the unemployed or anyone else disadvantaged by the income inequality they’ve been talking about. If their genuine goal were to really extend the benefits, all they would have to what their media cheerleaders keep telling the GOP they must do in every other context: compromise. If they were to agree to some spending cuts in order to pay for the benefits, it’s likely that even the House GOP would go along with the idea. Yet since they won’t, it is evident that their purpose is not so much to alleviate the travails of the unemployed as it is to outmaneuver the Republicans. As such, any tactical advantage the Democrats may gain may be fleeting.

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On yesterday’s Sunday news shows, Democrats doubled down on their preferred issue of the new year: income inequality and unemployment insurance. Both Senate Majority Leader Harry Reid and senior Senate Democrat Chuck Schumer railed at Republican opponents of extending unemployment benefits and sought to portray the GOP as a conclave of heartless Scrooge McDucks chuckling while the jobless suffer. This is good politics for liberals, whose New Year’s resolution was to do everything in their power to change the national political conversation from the ObamaCare debacle, as well as good television. Given the popularity of these proposals, the discussion about the course of the debate has largely followed the lines Democrats like. Thus, the reluctance of most congressional Republicans, especially the leadership of the House of Representatives, to act on President Obama’s proposal to again extend unemployment insurance plays into themes that work well for Democrats such as fairness, conservative apathy about the “47 percent” who get federal benefits (to use Mitt Romney’s infamous and foolish formulation), and a “do-nothing Congress” led by a dysfunctional Republican Party.

It’s debatable whether Republicans are doing themselves a favor by opposing the president on issues where he and his allies can appear to claim the high moral ground. But there are two main problems with this strategy for the Democrats. One has to do with how much traction these liberal talking points really have with the electorate in a midterm election year in which Democrats are defending far more competitive House and Senate seats than their opponents. The other goes to whether Democrats are actually serious about helping the unemployed or anyone else disadvantaged by the income inequality they’ve been talking about. If their genuine goal were to really extend the benefits, all they would have to what their media cheerleaders keep telling the GOP they must do in every other context: compromise. If they were to agree to some spending cuts in order to pay for the benefits, it’s likely that even the House GOP would go along with the idea. Yet since they won’t, it is evident that their purpose is not so much to alleviate the travails of the unemployed as it is to outmaneuver the Republicans. As such, any tactical advantage the Democrats may gain may be fleeting.

Conservatives who are urging GOP leaders to stand firm on both the unemployment issue and other “inequality” wedge issues are right. Endless extensions of benefits as well as hiking the federal minimum wage are both economic snake oil. As I wrote last month, such a measure is good for neither the nation’s fiscal health nor, as many serious economists have pointed out, for the long-term prospects of the unemployed since it irresponsibly produces two grim results: it discourages searches for work and transforms what was designed as a stopgap measure into something that is well on its way to becoming a permanent unfunded entitlement. But it is also true that opposing anything that can be portrayed as helping the unemployed is a certain political loser. The more Republicans take the Democrats’ bait and engage in debates about these issues, the more they are merely helping their opponents change the subject from the growing costs and dysfunction of ObamaCare as well as the fact that this administration is a lot better at politics than it is at governing.

But, as even the New York Times’s analysis of this argument noted, although Schumer claimed yesterday on ABC’s This Week that these inequality wedge issues would come back to haunt Republicans in theoretical swing seats in the midterms this coming November, there’s no evidence whatsoever that any of this will have a discernible impact on the results.

More importantly, Obama’s and Reid’s grandstanding on the unemployment issue highlights yet again the major difference between the current Democratic team and Bill Clinton’s far more successful presidency. Clinton was able to beat up Republicans on issues like this almost at will. But at the same time, his keen political instincts and natural governing ability enabled him to cut deals with his GOP opponents to get things done. This is exactly the kind of moment when Clinton would have compromised with his House Republican rivals in order to get something like an unemployment benefits extension and then taken all the credit for it even though the other side would have done as much if not more to make the deal. By contrast, though Obama may score a few points at the Republicans’ expense by refusing to move in their direction, it won’t change a wretched political narrative that is likely to be far more influenced by the more far-reaching impact of the rising costs of health care and insurance over the course of the year.

By acting in this manner, Obama and the Democrats are doing more than failing to achieve their stated objectives; they are also effectively sacrificing the unemployed as expendable pawns in a losing game of political chess. Like the vast population of middle class, younger voters, as well as the elderly all of whom stand to lose as ObamaCare continues its downward spiral, it’s unlikely that the unemployed will thank the Democrats for serving as cannon fodder in their war with the GOP. Taken as a whole, this strategy may turn out to be an even bigger political loser than a Republican decision to stick to conservative principles and to refuse to budge on unemployment or the minimum wage.

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Obama Economic Team Tied up in Spin

The Obama administration is lowering expectations and getting tangled up in its own spin. On one hand, the Obama economic team needs to prepare the public for a period of high unemployment:

The economy is growing again, but at a pace unlikely to quickly replace the 8.4 million jobs erased in the recession that began in late 2007. More than 11 million people are drawing unemployment insurance benefits.

“We’ve got a long way to go,” said Lawrence Summers, director of the National Economic Council. “We’ve inherited a terrible situation, the most pressing economic problems since the Great Depression in our country.” [In case you thought the Obama team was ever going to stop blaming George W. Bush, think again.]

Christina Romer, head of the White House Council of Economic Advisers, said consumers still face “a lot of head winds” from the financial crisis. For example, debt and credit difficulties are hampering stronger job growth.

They were echoing the words of Treasury Secretary Timothy Geithner, who said last week the administration was “very worried” about returning to a more normal jobless rate of around 5 percent.

Summers said Obama was preoccupied with creating jobs. “The trend has turned, but to get back to the surface, we’ve got a long way to go,” Summers said.

Preoccupied? Well, that can certainly be said of health-care reform, but what, precisely, has Obama been doing to promote job growth? Certainly raising billions and billions in new taxes in the guise of health-care “reform” and allowing the Bush tax cuts to expire aren’t helping job creation. Nor will cap-and-trade, if the Obama team has its way.

And the job picture is likely to get worse, not better, as more workers return to the job market, as this report explains:

Some economists assert that the unemployment rate, which held steady at 9.7 percent in March, is likely to be driven higher as many more such people are lured into looking for work by hopeful signs of recovery.

The number of people looking for jobs rose by more than 200,000 in March compared with February, according to the Economic Policy Institute — and that’s a good sign, economists say. It means that Americans are seeing more jobs being created, and that they’re optimistic about their prospects.

But the supply of new jobs — 162,000 in March, the biggest monthly increase in three years — will accommodate only a fraction of the unemployed. Some economists say the jobless rate will not recede to pre-recession levels near 5 percent for four more years.

Meanwhile, the buckle-your-seat-belts-it’s-going-to-be-a-bumpy-ride warning runs headlong into the Obama team’s persistent defense of the original stimulus bill, which was supposed to keep unemployment at 8 percent. Christina Romer proclaimed, “I think it has done exactly what we would say it would do.” Uh… not really. Needless to say, Republicans are pouncing on the insistence that everything is going exactly according to plan. “Romer’s comments are likely to raise the ire of Republicans in Congress. On Friday, the office of Senate Minority Leader Mitch McConnell (R-Ky.) released a memo showing that the stimulus has failed to keep unemployment under 8 percent as the administration said it would do.”

In sum, job growth is anemic, and the Obama administration cannot identify  a single effective policy it has advanced to promote job creation. Instead, it has run up a mound of debt and pursued policies that are likely to hamper rather than to facilitate job growth. The administration’s spinners can’t quite decide — brag about their expertly designed stimulus or lower expectations for any relief in the near term from sky-high unemployment? Frankly, the Obama team can spin all it likes; the voters can see for themselves that Obama administration and Democratic Congress have failed in their own stated goal to keep unemployment below 8 percent and promote robust private-sector job growth.

The Obama administration is lowering expectations and getting tangled up in its own spin. On one hand, the Obama economic team needs to prepare the public for a period of high unemployment:

The economy is growing again, but at a pace unlikely to quickly replace the 8.4 million jobs erased in the recession that began in late 2007. More than 11 million people are drawing unemployment insurance benefits.

“We’ve got a long way to go,” said Lawrence Summers, director of the National Economic Council. “We’ve inherited a terrible situation, the most pressing economic problems since the Great Depression in our country.” [In case you thought the Obama team was ever going to stop blaming George W. Bush, think again.]

Christina Romer, head of the White House Council of Economic Advisers, said consumers still face “a lot of head winds” from the financial crisis. For example, debt and credit difficulties are hampering stronger job growth.

They were echoing the words of Treasury Secretary Timothy Geithner, who said last week the administration was “very worried” about returning to a more normal jobless rate of around 5 percent.

Summers said Obama was preoccupied with creating jobs. “The trend has turned, but to get back to the surface, we’ve got a long way to go,” Summers said.

Preoccupied? Well, that can certainly be said of health-care reform, but what, precisely, has Obama been doing to promote job growth? Certainly raising billions and billions in new taxes in the guise of health-care “reform” and allowing the Bush tax cuts to expire aren’t helping job creation. Nor will cap-and-trade, if the Obama team has its way.

And the job picture is likely to get worse, not better, as more workers return to the job market, as this report explains:

Some economists assert that the unemployment rate, which held steady at 9.7 percent in March, is likely to be driven higher as many more such people are lured into looking for work by hopeful signs of recovery.

The number of people looking for jobs rose by more than 200,000 in March compared with February, according to the Economic Policy Institute — and that’s a good sign, economists say. It means that Americans are seeing more jobs being created, and that they’re optimistic about their prospects.

But the supply of new jobs — 162,000 in March, the biggest monthly increase in three years — will accommodate only a fraction of the unemployed. Some economists say the jobless rate will not recede to pre-recession levels near 5 percent for four more years.

Meanwhile, the buckle-your-seat-belts-it’s-going-to-be-a-bumpy-ride warning runs headlong into the Obama team’s persistent defense of the original stimulus bill, which was supposed to keep unemployment at 8 percent. Christina Romer proclaimed, “I think it has done exactly what we would say it would do.” Uh… not really. Needless to say, Republicans are pouncing on the insistence that everything is going exactly according to plan. “Romer’s comments are likely to raise the ire of Republicans in Congress. On Friday, the office of Senate Minority Leader Mitch McConnell (R-Ky.) released a memo showing that the stimulus has failed to keep unemployment under 8 percent as the administration said it would do.”

In sum, job growth is anemic, and the Obama administration cannot identify  a single effective policy it has advanced to promote job creation. Instead, it has run up a mound of debt and pursued policies that are likely to hamper rather than to facilitate job growth. The administration’s spinners can’t quite decide — brag about their expertly designed stimulus or lower expectations for any relief in the near term from sky-high unemployment? Frankly, the Obama team can spin all it likes; the voters can see for themselves that Obama administration and Democratic Congress have failed in their own stated goal to keep unemployment below 8 percent and promote robust private-sector job growth.

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