In their pro forma session, the Senate passed by unanimous consent the latest – and final – version of a two-month stopgap bill to extend the payroll tax cut, unemployment insurance and the doctor’s fix. They actually deemed this version passed pending approval from the House, which must originate any tax bills. The House followed suit, without objection, so now the bill has passed, and I would expect the President to sign it expeditiously.
I’ve been following the politics of this, which definitely track for Democrats, as John Boehner winds up humiliated by the late-game theatrics. On the policy, I wrote yesterday about the economics of the bill. There definitely are some caveats. Steve Benen mentions a few. First, this is only a two-month stopgap, and it’s unclear how Congress will react two months down the road to put together a one-year extension. Second, Benen cites Greg Sargent by saying that this is the only part of the American Jobs Act that has been able to pass. That’s not actually true, the veterans hiring piece passed. In addition, the payroll tax was one of the larger parts of the AJA. Third, Benen notes that there were concessions in the Senate bill, which he lists as the dropping of the millionaire surtax and the acceptance of an expedited decision on Keystone XL. I don’t know why anyone thought the millionaire surtax was anything but a message vote to allow Democrats to run ads next year. On Keystone XL, if we take the State Department and the White House at their word, in 60 days the permit will be denied. So let’s see.
But he’s forgetting one, and it’s actually the worst part of this whole bill. Seemingly everyone but Arthur Delaney has overlooked the fact that this short-term stopgap allows extended unemployment benefits to expire in several states.
A top ranking Democrat in the House of Representatives on Tuesday defended his party’s support for cutting 20 weeks of unemployment benefits, a position that has escaped much notice in the payroll tax cut debate consuming Washington.
Democrats want the House to pass a Senate bill that would postpone the January expiration of federal unemployment programs for two months. But even if it is reauthorized, one of those programs will automatically phase out next year, unless Congress changes federal law to allow states to keep it, a provision not included in the Senate bill […]
The Extended Benefits program is the last stop on the unemployment insurance train for the very long-term jobless. It provides up to 20 weeks of assistance to workers who exhaust 53 weeks of federal Emergency Unemployment Compensation and 26 weeks of state benefits. But the Extended Benefits program is only available in states where the unemployment rate has risen significantly over the past three years. Unemployment has remained stubbornly high since 2008, but it hasn’t risen, which will make most states ineligible for Extended Benefits early in 2012.
In other words, the rallying cry about the 99ers is only true in high-unemployment states. And because the “look-back” on the Extended Benefits provision is three years, unemployment hasn’t increased in most of those states under the time requirements, which means that the 99ers will fall back to the 79ers. Originally, the Senate bill changed this to a four-year look-back, which would have preserved Extended Benefits in the high-unemployment states. As it is, it’s probably going to phase out, unless it gets changed in the one-year version.
The one bit of good news here is that the only member of Congress who seems to be irked by this, House Ways and Means ranking member Sander Levin, has been appointed as a conferee in the House-Senate conference on the long-term bill. Hopefully he will make this a priority. He recently called the provisions in the Senate bill “wholly inadequate.”
But 11 states will lose access to Extended Benefits in just the next two months – Minnesota, Michigan, Massachusetts, Maine, Oregon and Indiana in January, and Wisconsin, Tennessee, South Carolina, Rhode Island, and Ohio in February.
Now THAT’S a real concession. And it’s really awful. It should be a top priority to remedy this in the long-term bill, with retroactive benefits for those who will be cut off without warning in the next two months.