GOP caves, Congress passes jobless benefits extension

WASHINGTON - With right-wing House Republicans realizing they would look bad for yanking money from jobless workers and raising taxes on the middle class, Congress finally passed a two-month extension of long-term unemployment benefits and a Social Security payroll tax cut for workers - and then went home for the holidays.

The votes ended a tense standoff where members of the GOP's Tea Party wing, who control the party, first refused to extend benefits at all - they argued more benefits give the jobless an incentive not to work - or let the payroll tax cut remain in force.

Then the Tea Party switched directions and demanded a one-year extension of both, but with conditions unacceptable to President Obama and his allies, including union allies.

In the end, the Tea Party yielded, but extracted one big concession: Ordering the Obama administration to decide within 60 days the fate of the proposed 1,700-mile Keystone XL pipeline from the Montana-Canada border to refineries of the Gulf Coast.

Building trades unions strongly back the pipeline. They calculate it would create 20,000 construction jobs. The State Department, which must approve the project, puts the total closer to 5,000. Several years ago, four construction unions signed a project labor agreement with TransCanada, the pipeline's sponsor, to use union labor for it.

Before the two sides agreed to the two-month extension, House Minority Whip Steny Hoyer, D-Md., gave the GOP a tongue-lashing for its absolute refusal to even consider the president's original plan: Paying for the jobless benefits for a year by a small tax hike on the rich.

GOP House Speaker John Boehner said he's ready to discuss extending the benefits, Hoyer said, and appointed negotiators on the issue. But "all" (of whom) at one point or another said they are opposed to a one-year extension of the middle class tax cut.

"And in fact they have made comments similar to the Speaker's that the middle class tax cut is a gimmick. Well, the middle class doesn't believe that and working men and women in this country don't believe that. They don't believe that it's a gimmick to reject having the wealthiest people in America pay some additional, small increment so that this bill could pass in the Senate months ago," Hoyer said.

Economic Policy Institute analyst Heidi Shierholz said extending the jobless benefits would actually add jobs, because it would put money in people's pockets.

"The spending of extended benefit checks will create over a half-million jobs in 2012. If the extended benefits aren't continued, those jobs will be lost, and, all else equal, the loss of those jobs would increase the unemployment rate by around 0.3 percentage points," she said.

"Claims that continuing the UI extensions will further weaken the labor market are simply not supported by the evidence," she added. "Continuing extended UI benefits will create jobs, incentivize people to keep looking for work who otherwise would have given up, and provide a lifeline to the families of workers who lost their job during the worst, and ongoing, labor market downturn in seven decades," she said.

 

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