With so much attention being paid to whether American automakers should get a bailout, Congress should not lose sight of essential legislation to extend unemployment benefits. Senate leaders have bundled together an auto industry rescue with the extension of unemployment benefits. But if it turns out that Democrats can't muster the votes needed for passage of a combined measure, the jobless benefits should be approved separately.
The benefits extension already passed the House in October by wide bipartisan margins. The bill would grant an added seven weeks of federal jobless benefits in all states and another 13 weeks in states with unemployment rates of at least 6 percent (Florida's unemployment rate was 6.6 percent in September). The measure's outcome in the Senate isn't assured, and President Bush has not signaled his support. But if these additional weeks are not granted, it is estimated that more than a million Americans will exhaust their benefits by the end of the year before finding another job.
Unemployment insurance, a program created during the Great Depression, provides a vital safety net for the country's displaced workers — think of it as a bailout for the rest of us, as opposed to Wall Street bankers, when facing hard times. With an average weekly jobless benefit of $293, no one's getting rich, but the payments offer workers a temporary financial bridge in a rocky economy. As we face down the barrel of a deep and difficult recession, a longer bridge is warranted.
In the 1970s, unemployment benefits were awarded for up to 65 weeks. But in the last 25 years, government programs designed to help people in times of financial stress have been winnowed down. The current maximum benefit is 39 weeks, and that is only because a federal 13-week extension was passed in June.
Another 13 weeks of benefits would increase the maximum to 52 weeks, a boost more than justified by the bleak jobs picture. In October, the unemployment rate hit 6.5 percent, and there are estimates that it could reach 8 percent or higher next year. Already we are in record territory. You have to look back 25 years to find a time when more people were receiving unemployment benefits, according to the progressive Center for American Progress.
From an economic stimulus perspective, the added benefits would also help stave off foreclosures — the very thing keeping the housing market from stabilizing. And jobless benefits are typically spent for living expenses, injecting money directly into the economy and potentially lessening the severity of a recession.
If Congress doesn't get too bogged down in partisan bickering over an auto industry rescue, it is possible that even this stalemated, lame-duck Congress can get this done. Then, in January, a new Congress can push for other stimulus measures that help average Americans, including more relief for homeowners facing foreclosure.