The conventional wisdom in Washington seems to be that another year-long extension of federal unemployment benefits is likely to be approved in Congress despite strong Republican opposition in the House.

The Hill reports:

Congress is expected to pass a yearlong extension of unemployment benefits before they expire, although the process is uncertain.

Advocates of reauthorizing the program feel confident that a yearlong extension will get tucked into one of several different bills that could pass by year’s end — a supercommittee budget deal or a tax extenders bill that would renew the Medicare ‘doc fix’ along with other expiring program provisions.

Without hitching a ride on one of those vehicles, the measure may have to fly solo, likely igniting a heated battle between Democrats and Republicans, inevitably pushing the fight to the brink of expiration…

A positive sign is that while talk about the issue has been subdued, discussions are escalating on reauthorizing the federal benefits, which expire Dec. 31, Conti said.

Democrats say they have the offsets if Republicans insist on them to fund the program without increasing deficit spending.

The lame-duck session could be the last chance for Senate Majority Leader Harry Reid (D-Nev.) to pass a number of bills. (Pete Marovich/ZUMApress.com)

The midterm hangover having finally worn off, the 111th Congress returns today to kick off the lame-duck session, its last hurrah before its successor takes over. And the 112th Congress will look radically different, with Republicans in control of the House and the Democratic majority in the Senate significantly reduced. These next few weeks, then, could be the last chance for major Democratic initiatives. But the hurdles are high, and Republicans see no reason to grant Democrats any victories after the populace voiced its discontent with the policies of the past two years.

[Congress1] The battle lines are drawn; here are the fields on which they’ll be fought:

Bush tax cuts:

The biggest question before the Senate — and the one that will likely receive the most attention — is the expiration of the 2001 tax cuts signed into law by President Bush. Facing Democratic resistance in the Senate at the time, Republicans set up the cuts to sunset after ten years. Now that they’re set to expire, however, GOP lawmakers have lined up shoulder to shoulder to make them permanent.

President Obama, on the other hand, ran for office on a pledge to extend the existing tax rates for families making less than $250,000 a year, while letting the tax cuts for those making over that number expire. But as the economy continued to falter and Democratic re-election prospects began looking bleak, Democrats in Congress put off addressing issues related to the tax code until after the midterm elections. Now that Republicans have made big gains in both chambers of Congress, Democrats find their confidence further weakened.

Following the midterms, the White House has signalled that Democrats might be willing to compromise on the idea of a permanent extension of tax cuts for middle-class families and a temporary extension of cuts for the two percent of Americans families making more than $250,000, but it won’t stomach the approximately $700 billion in additional debt that would be required to extend those cuts permanently. Republicans, on the other hand, haven’t deviated from their position that the tax cuts for all Americans be kept together as a package deal.

If neither side blinks, taxes are set to rise for all Americans effective January 1. Neither party wants to be seen as responsible for a tax hike during difficult economic times, but Democrats have appeared far more worried at the prospect of getting blamed should negotiations break down. Polls favor the Democrats’ position that the tax cuts for the wealthiest Americans should be allowed to expire, but without the votes of at least two Republicans in the Senate, the proposal is likely to fail. Barring momentum in Congress for the creation of a new tax bracket — for people making half a million dollars or a million dollars per year — in order to better rhetorically define the class of folks for whom Republicans are advocating tax relief, the easiest and most likely outcome will be a bill that temporarily extends all the tax cuts, simply kicking the decision of what to do to some point farther down the road.

Unemployment insurance benefits

As Congress frets over whether the marginal tax rate for incomes over $200,000 should be raised three percentage points, the Senate is also on the verge of allowing federal unemployment benefits to lapse — again. Extending the benefits before they expire on November 30 might seem like a no-brainer: It would prevent somewhere between 1.2 and 2 million unemployed Americans from having their subsistence checks cut off just in time for Christmas and would reduce the risk of a drop in consumer spending and economic growth as high as 0.4 percentage points from December to February.

Republicans might have trouble arguing that deficit reduction trumps other priorities, including unemployment benefits, when the only major initiative the GOP is pushing — extending the Bush tax cuts for the upper 2 percent of wage earners — would increase the deficit by $700 billion over ten years. That said, Republicans in the Senate, along with Sen. Ben Nelson (D-Neb.), are likely to vote against any extension of unemployment insurance benefits unless Democrats can come up with ways to offset their cost.

The last time unemployment benefits were set to lapse, back in early June, the Senate was unable to muster enough votes to renew an extension for 51 days. With Republican Sens. Olympia Snowe and Susan Collins of Maine joining Democrats to vote for cloture, and Nelson joining with Republicans to vote against debate, Democrats had no choice but to wait for Sen. Carte Goodwin (D-W.Va.) to be sworn in as a replacement for the late Sen. Robert Byrd (D- W.Va.) in order to garner a 60th vote.

This time, assuming all the senators maintain their positions in the debate, the hurdle will be that much higher for Democrats after Rep. Mark Kirk (R-Ill.) takes the seat of Sen. Roland Burris (D-Ill.) on Nov. 29. With one fewer assured vote, Democrats would either have to come up with a package of equivalent spending cuts that satisfies Republicans’ demands or persuade one more Republican to join their cause. Neither scenario appears particularly likely, however, which is why many unemployed Americans are bracing for the worst come Nov. 30.

“Don’t Ask, Don’t Tell”

A long-awaited Pentagon study on ending the practice of “Don’t Ask, Don’t Tell,” the 17-year-old law that requires military service members to keep their sexual orientation secret, isn’t due to President Obama until December 1, but early media reports indicate that it will buttress gay rights advocates’ arguments to repeal the law. More than 70 percent of the respondents in the Pentagon survey indicated that repeal would have either positive, mixed or nonexistent effects, leading the authors to conclude that the military can lift its ban on gay and lesbian Americans serving openly in uniform while incurring minimal risk in its current war efforts.

If the study brings good news to those hoping to repeal the law, however, the current situation in the Senate should not. Senate Majority Leader Harry Reid (D-Nev.) attempted to repeal “Don’t Ask, Don’t Tell” before the midterm elections, tacking the provision onto a defense reauthorization bill that failed to overcome a Republican-led filibuster in the Senate. The bill was weighed down by many add-ons — including the DREAM Act, which seeks to extend a path to citizenship to some undocumented immigrants who attend college or serve in the military — giving too many senators excuses to vote against it, but advocates remained hopeful that repeal could pass along with the defense bill when Congress resumed for its lame-duck session.

Now Sen. John McCain (R-Ariz.), ranking member of the Armed Services Committee, is said to be negotiating with Sen. Carl Levin (D-Mich.), the committee chairman, to remove the DADT repeal provision from the defense bill. McCain had previously voiced openness to authorizing a repeal of the law following the Pentagon’s review, but since that time his views have hardened. During his re-election battle earlier this year, McCain faced a primary challenger from the right and promised during his campaign to preserve the law.

In the absence of support from McCain, advocacy groups have identified 10 senators who have indicated in the past that they’d like to see the Pentagon’s study before deciding on whether to lift the military’s policy. The list includes Sens. Scott Brown (R-Mass.), Lindsey Graham (R-S.C.), Judd Gregg (R-N.H.), Mark Pryor (D-Ark.), Oympia Snowe (R-Maine), George Voinovich (R-Ohio) and Jim Webb (D-Va.). Once the results of the study are known, gay rights groups hope these senators will take them to heart and vote for repeal. If they follow McCain’s lead and renege on their previous openness to getting rid of the law, however, it may be a long time before Congress can muster sufficient votes to repeal the policy.

Campaign finance reform

Following an election season that saw record amounts of cash — including a fair chunk from undisclosed sources — spent on political advertising by outside groups, campaign finance reform advocates are still hoping that Democrats in Congress might take advantage of their remaining time in charge of both chambers to pass legislation to shore up the loophole-ridden landscape of campaign finance law. The most popular effort, by far, during the last year has been a bill called the DISCLOSE Act, which would require all groups spending money on electioneering activities in future elections to disclose their major donors.

While premised on a fairly bipartisan concept of full disclosure, the bill soon ran into trouble in the Senate over additional components that had been added on to it. Measures to prohibit campaign spending by companies holding government contracts or those exceeding a certain threshold of foreign ownership were read by Senate Republicans as an attempt to privilege union speech over that of corporations. Traditional campaign finance reform advocates like Sens. Olympia Snowe (R-Maine) and Susan Collins (R-Maine) held onto such objections and voted against cloture for the bill when Democrats declined to take them out.

Now Democrats in the Senate are contemplating one last attempt to pass a stripped-down version of the DISCLOSE Act — one that sticks strictly to the principle of transparency that Republicans once advocated as their gold standard for effective campaign finance legislation. But Senate Minority Leader Mitch McConnell (R-Ky.), a staunch opponent of nearly all campaign finance legislation, might prove an even bigger obstacle to the bill’s passage than any single aspect of the legislation. While Snowe or Collins, or even Sen. Scott Brown (R-Mass.) or Senator-elect Mark Kirk (R-Ill.), might prove receptive to the measure in principle, it appears highly unlikely that any of them are willing to buck their party leadership for the cause.

Energy/environment

Even if the lame-duck session likely represents the best opportunity for Democrats to pass key pieces of energy legislation before a more Republican Congress comes to town, it seems unlikely that anything significant will move.

The House, for its part, has already passed a cap-and-trade bill and an oil spill response bill, and all eyes are now on the Senate. But it looks like major energy action in the chamber will have to wait until next year, if it happens at all.

One clean energy advocate with close ties to Congress downplayed the likelihood that energy legislation will pass during the lame duck. “Little will happen, probably,” he said.

The only energy-related bill that is likely to see the light of day during the lame-duck session is a proposal to encourage the production of electric and natural gas vehicles. Senate Majority Leader Harry Reid (D-Nev.) has scheduled a cloture vote for Wednesday on the bill, the Promoting Natural Gas and Electric Vehicles Act of 2010. The bill has bipartisan support.

Asked about the prospects for energy legislation during the lame duck in the Senate, Regan Lachapelle, a spokeswoman for Reid, said, “We filed cloture on a motion to proceed to a natural gas bill before we left. Other than that, we have many items that are possible for consideration during the lame duck.” Lachapelle did not elaborate on the pieces of legislation to which she was referring.

Backers of a renewable energy standard, which would require that a certain percentage of the country’s electricity come from renewable sources like wind and solar, are keeping their fingers crossed that such a proposal can move in the lame-duck session. “We’re optimistic about the lame duck,” said one RES proponent who was not authorized to talk on the record.

Reid and Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) spoke on the phone Tuesday about the possibility of moving an RES during the lame duck. Bingaman’s spokesman, Bill Wicker, would not discuss the call. “This was a private conversation between two Members, so I have to respect that,” he said in an email. “But we all should know more about the lame duck before much longer.”

But a senior Senate aide with knowledge of the conversation downplayed the possibility that an RES would be brought up for a vote during the lame-duck session. “They had a good conversation and agreed it will be challenging to get 60 votes for expedited consideration of an RES during the limited time left in the session,” the aide said of discussion between Reid and Bingaman. Indeed, RES supporters would need to secure the support of two to four Republicans in addition to the four who already support the bill in order to get 60 votes.

An oil spill response bill and various pieces of legislation to promote energy efficiency and home weatherization are all pending in the Senate. But it looks like consideration of those bills will have to wait until next year.

DREAM Act

Reid and Pelosi have vowed to push for a lame-duck vote on the DREAM Act, a bill that would allow some undocumented young people who came to the United States as children to gain legal status for attending college or serving in the military.

In the House, the vote could come as early as this week, Democrat sources told Politico. Reps. George Miller (D-Calif.) and Xavier Becerra (D-Calif.) were reportedly tasked by Pelosi with determining whether the caucus would be able to pass the bill.

If the act does not pass in the lame-duck session, it has very little chance of passage before 2013. Rep. Steve King (R-Iowa), who is expected to head the House subcommittee on immigration, refers to the DREAM Act as “amnesty” and promised he would use his authority in the GOP-led House to block the act. GOP gains in the Senate also lessen the likelihood of passing the bill next session.

Reid recently said he would need support from “a handful of Republicans” to pass the bill during the lame duck, echoing estimates by bill sponsor Sen. Dick Durbin (D-Ill.) that at least five Republicans would need to support the bill for it to pass. A spokesman for Reid confirmed last week that he plans to bring up the DREAM Act for a vote during the lame-duck session, although it is still unclear whether it would be as a standalone measure or as an attachment to another bill.

The problem is that Reid doesn’t have much time — or sure support for the DREAM Act from his caucus. The act last came up for a vote in 2007, and seven of the eight Democrats who voted against it then are still in the Senate. While a few might support the bill this time around, five told The Hill in September they are still undecided on the DREAM Act.

Complicating matters, Mark Kirk’s assumption of Roland Burris’ seat in the Senate turns a sure “yes” vote into a likely “no.” Kirk has been lobbied heavily by DREAM Act supporters, but said before the election that he would vote against the act unless border security measures were pushed first. “It’s not time for the DREAM Act right now,” he told reporters in October. “If the DREAM Act came up for a vote right now, I would vote ‘no.’”

All current Republican senators voted in September to filibuster the defense authorization bill after Reid announced plans to attach the DREAM Act. But given the additional controversy over that bill — it included a repeal of “Don’t Ask, Don’t Tell” and would have allowed for only limited changes from Republicans — it’s tough to extrapolate much from it about how senators would vote on the DREAM Act as a standalone bill.

Sen. Robert Bennett (R-Utah) said he would support the bill if it were brought to the floor on its own, even though he opposed it as part of the defense authorization bill. Sen. Richard Lugar (R-Ind.), who co-sponsored the bill, would also almost certainly vote for it if it comes up in the lame-duck session.

Several other Republicans voted for the DREAM Act in 2007, but their support this year remains uncertain because of rightward shifts on immigration policy and the possibility of the bill again being attached to other legislation. Sen. Orrin Hatch (R-Utah) was an original sponsor of the bill when it was first introduced in 2001 and voted for it in 2007. This year, he said the government should secure the borders before it focuses on the DREAM Act.

Written by Jesse Zwick, Andrew Restuccia and Elise Foley.

Now, it needs to happen again. Federally extended benefits start to lapse at the end of November. The unemployment rate has not declined — indeed, it has remained at or above 9.4 percent for the last 17 months, and nearly 15 million Americans are unemployed — and economists and labor experts are urging Congress to reauthorize the benefits.

But the fight will be uphill, as Democrats will be weaker after the election and want to pass a tax compromise and other pieces of controversial legislation during the lame duck session. On top of that, due to the break for campaigning and the Thanksgiving holiday, Democrats might have as few as five legislative days to pass the benefits before they start expiring. (Last time, it took seven weeks.)

In response, the National Employment Law Project is going on the offensive, relaunching its website unemployedworkers.org and calling attention to the issue. “[W]e intend to prevent any cut offs or lapses this November by partnering with mobilized workers, supporters and other advocates to put unemployment insurance at the top of Congress’ to-do list when it reconvenes,” Christine Owens, NELP’s executive director, said in a statement. “Unemployment benefits have kept 3.3 million American families — including 1.5 million children — from falling into poverty in 2009 alone. With the holiday season approaching, it would be especially cruel to families and bad for businesses to cut off these benefits.”

But Democratic aides are already nervous about the partisan deadlock and the time crunch — with some describing the Senate’s failure to pass an extension before benefits start lapsing as almost inevitable. “We don’t want to keep getting people’s hopes up,” one without permission to speak on the record said. “It is very frustrating.”

South Carolina’s more than 236,000 unemployed workers could have to take a drug test in order to receive jobless benefits, according to a proposal by Republican gubernatorial candidate Nikki Haley on Tuesday. [...] Haley said testing the unemployed was one of several steps in ensuring the newly restructured Department of Employment and Workforce — now a cabinet agency — only pays benefits to those who have earned them. “We will make sure, above all, that there will be no … benefits if they do not pass a drug test,” Haley said.

It is a bad idea, though not an original one; Sen. Orrin Hatch (R-Utah) suggested the same this summer. In other class-baiting news, check this out from Newt Gingrich, perpetual almost-candidate for president:

[Gingrich] is advising Republican candidates on November’s ballots to frame the choice for voters between Democrats as “the party of food stamps” while selling the GOP as “the party of paychecks” [...] He told reporters later that Republicans can campaign as the party of opportunity. “Most Americans would like to get a paycheck,” Gingrich said. “Most Americans would not like to be forced to have food stamps handed out by liberal Democrats.”

Where to start? Haley makes the classic mistake of thinking of unemployment benefits as welfare, rather than insurance. But they don’t call it “unemployment insurance” for nothing. Recipients need to have been working, and need to be looking for work — and workers pay into the system to ensure they have some income safety in case they lose their job. The program is federally administered, of course, but so is, say, flood insurance. Consider Haley arguing that South Carolina residents whose homes were damaged by a hurricane should have to pee in a cup before getting payments to help rebuild. As for Gingrich, he seems to conflate food insecurity with joblessness. Most SNAP recipients do actually work. They just don’t make enough to feed their families. And surely no SNAP recipient would prefer bigger benefits to a better-paying job.

Both Haley and Gingrich, in their class-baiting, also forget one of the fundamental reasons the United States makes access to these programs easy: Children are primary beneficiaries of unemployment insurance and food stamps. Both programs exist not just to reward the lazy adults (as horrible a stereotype in contemporary American politics as there is), but to keep kids out of abject poverty.

And those programs aren’t doing enough. The Economic Policy Institute, for one, notes the child poverty rate has soared through the recession. One in five children still lives in poverty. And in no state is the child poverty rate lower than one in ten.

Starting at the beginning of 2009 it is now more likely that someone who is unemployed will drop out of the labor force than find a job. This is a new problem for our economy, as this hasn’t happened as far back as data can be found (1967). These workers need targeted intervention before they become completely lost to the normal labor market.

This is a subject TWI has examined in the past: The unemployment rate has fallen not just because more workers have found jobs, but because hundreds of thousands of workers have stopped looking. If you have not actively searched for a job in the past four weeks, you do not count as jobless — instead, you count as someone “marginally attached” to the labor market, or “discouraged.”

But the Bureau of Labor Statistics’ monthly data does not follow individuals over time. Say a worker is on unemployment, then works for a month, then loses her job and does not search for a job for six months, then becomes unemployed again. We’ll know when that worker shows up in the unemployment rolls. But when she isn’t looking for a job, we won’t know whether it is because she found one, or because she isn’t choosing to look for one anymore, for whatever reason.

But Konczal and Jayadev use different data sets to suss out reemployment numbers:

Looking at the transition between not in the labor force to employed, we see that during these years, on average, 4.9 percent  of the non-labor force found a job every month. Now that number is down to a disturbing 4.1 percent. At the same time, we see an increase in the percentage of people not in the labor force to unemployed — that number has skyrocketed from 2.6 percent a month in good times to 3.7 percent in 2010.

[T]he increase in unemployed is largely a function of those who are out of the labor force not finding jobs. For example, students and young people who would normally be entering the work force for the first time are now transitioning to unemployed status.

Another major change is that the percentage of the unemployed who find a job has plummeted. Normally this number is very high in the United States. During 1994-2000 the number was 29.6 percent, which meant there was an almost 30 percent likelihood that someone looking for a job would be employed in the next month.

And here’s a chart showing the macro problem:

Why is this such a bad thing? For one, unemployed workers who stop looking for jobs tend to be financially distressed: This statistic implies a whole lot of human suffering. It means thousands of families ceding economic safety and sliding into abject poverty, often using social safety net programs of last resort, such as SNAP benefits. Additionally, such workers often swell the rolls of government programs not actually designed for them, like disability insurance. But more broadly, and more importantly, this is bad for the economy. It means that hundreds of thousands of workers, rather than paying taxes, producing goods and services and helping the country’s economy grow, are sitting idle.

The data shows that the manufacturing sector has improved, year on year, though layoffs remain high. This July, manufacturers made 25 percent of mass layoffs, accounting for 31 percent of new unemployment claims. A year ago, it accounted for 37 percent of events and 46 percent of claims.

But the bad news? This year, the single subsector that laid off the highest number of workers en masse is secondary and elementary schools. In July. Right before the school year starts. Bus drivers weren’t spared either.

It is not good to read too much into any one weekly report — the numbers tend to jump around a lot. Still, this seems terrible. The four-week moving average is increasing, and now sits at 482,500, up from 474,500 last week. Claims have ticked up every week for the past month. At one point, it looked like the drop in unemployment claims could stall out, with the number of claim remaining at a high level of about 450,000, as they have since January. But now there is at least a slight bump in claims.

Claims need to fall into the 300,000 range to drag down the unemployment rate, currently 9.5 percent. The uptick implies a better chance that the unemployment rate will climb through the fall, as some economists expect.

I am inclined to favor further extension of UI benefits while the job market remains so weak. I am not concerned that this leads us down a slippery slope to permanent, indefinite unemployment benefits (which historically have been one of the drivers of high structural employment in continental Europe) as the United States has gone through many cycles of extending unemployment benefits in recession and then paring them back when the economy improves, under both Republican and Democratic leadership.But we could eliminate these fears by making UI adjustment an automatic, rather than political, process. I haven’t seen any specific formulas proposed (if a reform is on the table, readers, please alert me) but in general UI should be extended when unemployment is high and/or rising, and contracted when it is low and/or falling. A formulaic adjustment program could mimic what Congress habitually does already, but without generating market uncertainty — or incurring risk that Congress will be too timid to pull the trigger on abbreviating UI benefits in recovery.

This is a great idea, and one that I know Democratic and Republican staffers both would love to put in place — if for no other reason than because the jobs bill and benefits extensions have taken up hundreds of hours of negotiating time and scores of hours of Senate and House floor time.

The question, I think, might be the funding mechanism. The eight-month fight for unemployment benefits has centered on the question of how to pay for the benefits, or whether to pay for them — not whether to extend them.

There is already some precedent in place. Generally, Congress has started to roll back federal unemployment benefits when the national unemployment rate drops below 7 or 6.5 percent — a line that might demarcate whether unemployment extensions should count as “emergency spending” or need to fall under paygo rules. One could imagine a good bill stating that extended unemployment benefits do not need offsets if unemployment is over 8 percent, need partial offsets between 6 and 8 percent, and need full offsets below 6 percent. But the fight over those lines in the sand, I think, might be tremendous and even prohibitive.

Arthur Delaney at the Huffington Post notes that Schumer said as much on local television yesterday:

“There are a number of people who have maxed out, they’ve been looking and looking for work and haven’t found it, and there is a separate act that would extend the unemployment benefits to them,” Schumer told New York’s WENY-TV. “Extending this was really important. There are some people who go beyond the 99 weeks and we’re going to try to do that next.”

Schumer has indicated he might try to do something for the 99ers for months now. But repeated calls to his office this week haven’t yielded any answers. Still, a Senate aide notes that the situation has not really changed in Congress and warns 99ers not to get their hopes up. The aide says that though numerous Democrats would like to create a fifth tier of unemployment benefits, it would be impossible to pass through the Senate; several Democrats won’t vote for a fifth tier, and there might not be a single Republican cross-over to break a filibuster.

That said, progressives are hoping to craft something that expands job-subsidy or job-training programs for 99ers, and will look for offsets to make the bill deficit-neutral. The bill would likely come after the November midterms, but could come before.

The initial claims number needs to fall into the 300,000s to bring down the overall unemployment rate, economists say. It has remained sustained around 450,000 since January, while the unemployment rate has not dropped below 9.5 percent.