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Stabenow, Economists: Senate Stalemate on Unemployment Extension Hurting Families

Earlier today, I participated in a reporters’ call with Sen. Debbie Stabenow (D-Mich.), one of the loudest proponents of the immediate passage of the extension of federal unemployment insurance benefits, as well as Mark Zandi, chief economist for Moodys.com, and Heather Boushey of the Center for American Progress. The topic was the Senate’s failure to pass a $34 billion extension of UI to jobless Americans, and today’s dismal jobs report. Here is a flash transcript.

*Stabenow on the jobs report:

We are seeing numbers that certainly are mixed on the jobs front. We’re continuing to move in the right direction, but but certainly not as fast as I would like or any of us would like. We have a long way to go, and in the middle of this are people who were hurt because of Wall Street’s recklessness, who were hurt by other economic policies, and were hurt by companies moving jobs overseas. And they’ve done nothing but work all their lives and take care of their families and do their best to provide a quality of life for their families … In my state, 43,000 of them are beginning to lose benefits right now, in June, and 68,000 in July. And they don’t understand what’s happening, and they’re angry, particularly at Republicans in Washington who are out of touch, and fighting for the wrong people.

We have a pattern here of Republicans in Washington fighting for Wall Street, and big banks, and apologizing to BP, and leaving men and women who are middle-class Americans high and dry when they’ve lost their job. And I think this is very outrageous. We’re at a point now, where after 9 weeks of trying to break a Republican filibuster, we have two Republican votes. And we’re grateful to have those two Republican votes … But due to the passing of [Sen. Robert Byrd (D-W.Va)], we fell one vote short.

Stabenow on the outlook for the jobs bill:*

We expect and hope with the replacement of Sen. Byrd, we will have the votes in another week and will be able to reinstate benefits and they will be retroactive for people. But so many families are living day to day, trying to hold it together. We know there will be people who will not make it the next week without finding their home in foreclosure.

I’m extremely concerned about this. We’re committed to extending unemployment benefits both because it’s the right thing to do for families, also for the economy. I find it extremely distressing as we go forward week to week in the Senate to see such a difference in views, in whose side people are on and who they’re working for … because it feels like the Republicans in the Senate, the majority of them, are for failure, not just for this president, but for the economy.

In my judgment, as Americans, we should all be together about [this issue] … because the folks we should really be concerned about are the Chinese … because they are laser-focused on clean energy jobs, on manufacturing, on creating jobs for their people — and that’s what we ought to be doing here as Americans.

Zandi on the importance of passing emergency unemployment insurance benefits: *

Let me begin by saying it would be a significant error if Congress did not extend emergency unemployment insurance benefits. The principle reason is that the economic recovery remains very fragile, you could get a sense of that in today’s jobs numbers. The job market is measurably improved from where it was a year ago, and at the beginning of this year. The economy is creating jobs. But it’s not sufficient, certainly not sufficient to bring down the unemployment rate, and as long as it remains near double digits the risks to the recovery remain significant.

Not providing UI would hurt recovery at this critical juncture. There’s two key conduits through which this could occur. The first is the loss of income. The emergency unemployment insurance [benefits are] providing $8 or 9 billion in income to very stressed households, who turn around and spend that money very quickly … They would have to pull back on their spending and [that will] exacerbate the problems businesses are facing … The other conduit which is more difficult to gauge … is the impact this can have on confidence. Consumer sentiment clearly is very shaky. We saw that with the Conference Board survey numbers. Consumers are very, very nervous. And I think with so many people potentially running out of benefits, that could undermine this fragile confidence, which would have a broader impact.

*Zandi on the chance of a double-dip:

The odds that the economy will slip back into recession are still well below even. But if Congress is unable to provide this help, those odds will rise and become uncomfortably high.

*Zandi on whether and how to fund the UI benefits:

It would be ideal if the funds for extending UI benefits were made available, not this year, not next year, but when the economy is back in full swing, unemployment is moving lower. Then, I think it would be prudent that this would be paid for. But, I believe, given the risks, paying for it should not be a necessary condition for passing [the extension] … The risks are just too high.

Zandi on whether UI is discouraging people from looking for work: *

There are some arguments that unemployment insurance, these programs, is impeding job creation. There are people who are taking advantage of the system, and gaming the system, and will begin to look for work [when benefits expire] … I’m sure there are cases where that is true. But I don’t think that’s a broad problem … There are 5 unemployed workers for every job opening. That’s well above what one would see in a well-functioning labor market, where it would normally be around one to one. For the vast majority of people receiving unemployment insurance, it’s not because they want to be there.

Zandi on the long-term unemployment problem, and the unprecedented lapse in extended benefits:

It’s only gotten worse for the long-term unemployed … Congress has never before not extended long term unemployment benefits when unemployment is this high. Typically, it has extended benefits even when unemployment has been much lower … In some ways, this is uncharted economic territory … We’ve never seen this many long-term unemployed, or seen this share of long-term unemployed [in the overall pool of unemployed persons]. All the evidence points to it not being good [for them].**

Stabenow on pressuring Senators to vote for the bill over the holiday weekend:

Members are going back home and we will — I certainly will be speaking about what has occurred here and the continual fight to stop this filibuster … We have a coalition of governors, on bipartisan basis, that have urged us to pass the jobs bill in total, unemployment insurance as well as help for the states. Members will be going home and hearing from the people that they represent. I’m very hopeful … We’re certainly disappointed to lose [Sen. Ben Nelson's (D-Neb.)] vote, but the reality is that we have the overwhelming majority of the Republican caucus, only two stepping forward, [against this] …

Zandi on when to pay for extended unemployment insurance:

If the offset were this year or next, it would dilute the benefit. If the offset is, say, beginning in 2012, when presumably, reasonably the economy is in full swing, I think that would be actually better. That would be more productive. I don’t think it would be prudent to do it in the current environment …. Given the risks involved here, paying for it, even down the road, should not be a precondition for getting it done.

Stabenow on taking away from the stimulus to pay for benefits:

It’s even more unhelpful because they want to pay for this by taking money away from creating jobs right now. When [Republicans] propose taking dollars from the recovery fund, which are creating jobs right now … it makes no sense. If you want the economy to improve, to take money away from job creation, to help who are out of work — that makes no sense.

It’s more than a principle for us. It’s about whether or not it’s going to benefit the economy, as well as benefit families, and whether or not we’re going to be taking money out of one pocket in order to put it in the other pocket.

Stabenow on the rest of the jobs bill:*

July 4th [weekend is] coming up, and we’ve been trying to pass the summer employment bill … They’ve been blocking the jobs bill for eight weeks, right when we’re hearing how fragile the economy is, and how fragile confidence is. They’re talking down the economy, rooting for us to fail, and and it is not helpful when there’s such a fragile confidence and a lot of people who have resources are sitting on the capital because of all the messages being sent.

Stabenow on the possibility of passing anything increasing the deficit:

As much as getting things done involves people working across the aisle in good faith — I can’t promise you that after we’ve seen 245 objections in the Senate [this year] … I think unfortunately, the Republican strategy is very clear. But I can tell you, we are going to continue to come forward with solutions and offer, reach out and offer to work across the aisle to get things done.

But it is very, very difficult. But, we will continue to do that, because we’re in a huge crisis as a country, and we’re wasting time, precious time, while people are shaking their heads trying to figure out what’s going on here. And that appears to be a strategy, and it’s unfortunate if that strategy works.

But we have seen the Senate brought frankly to a stalemate, on one side people who are voting against Wall Street reform … people who are voting with big oil against the jobs bill, with corporations sending jobs overseas. And they clearly are willing to sacrifice middle-class families who have lost their jobs. And that is being played out on the Senate floor every day.

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