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Daily Labor Report
No. 89
Thursday, May 8, 2003
Page A-8

ISSN 1522-5968

Unemployment Insurance
Senate Democrats Say Troubled Economy
Reason Enough to Extend Jobless Benefits

By Catherine Hollingsworth

Senate Democrats will make another push to extend federal unemployment benefits, when the Senate Finance Committee takes up a $435 billion tax cut package May 8.

Democrats are sure to face an uphill climb in seeking another extension of federal unemployment benefits under the tax cut bill. But this time, they say, the job loss problem evidenced in a recent Labor Department survey will be hard for Republicans to ignore. They also contend that it will be difficult for Republicans to justify "tax cuts for the elite" without providing aid to the unemployed.

"This is just so fundamentally unfair," Sen. Hillary Rodham Clinton (D-N.Y) said at a press briefing. "It doesn't pass the 'straight face' test, for the administration and the Republican leadership to put on the floor of the House a huge bill filled with tax breaks for the elite and not take care of the people who ... happen to be unemployed because of this economy not creating any jobs."

The unemployment rate has been climbing, hitting 6 percent in April, according to figures released by the Labor Department May 2 (86 DLR D-1, 5/5/03). Those statistics "are just crying out for some kind of response from the administration," Clinton said.

Over the past year, Congress twice has passed an extension of federal unemployment benefits, once in March 2002 and again in January of this year (5 DLR A-9, 1/8/03). But Republicans have resisted Democrats' efforts to further extend the federal unemployment program, which expires at the end of May.

Finance Committee spokeswoman Jill Gerber said "people will want to stick very closely to tax issues" during committee action on the tax package.

Extensions Usually Done on Floor

She noted that recent extensions of unemployment benefits typically have been worked out on the floor, not in committee. If the unemployment measure is brought up in Finance, the measure could fail on procedural grounds, Gerber said, because opponents could argue that it is not germane to the main legislation. In that case, a two-thirds majority vote would be needed to override the objection, but that is unlikely given that committee Republicans outnumber Democrats by one member.

House Democrats ran into a similar obstacle May 6 in the House Ways and Means Committee when they tried to add a 13-week extension of benefits to a $550 billion tax cut bill approved by the committee. The full House is expected to act on the tax package May 9, and Democrats hope to offer their own alternative stimulus plan that includes the unemployment measure. The provision is based on an unemployment bill (H.R. 1652) sponsored by Rep. Charles Rangel (D-N.Y.).

Rangel's plan also includes aid to states to provide unemployment benefits for low-wage earners and part-time workers, who typically do not qualify for unemployment insurance.

In the Senate, the Democrats' push for extended benefits is being led by Sens. Jeff Bingaman (N.M.), Edward Kennedy (Mass.), and Clinton (N.Y.). Bingaman said the group also is proposing to cover about 4 million people--including nearly a million who have exhausted all their benefits.

The Senate Democrats' stimulus plan was unveiled by Sen. Tom Daschle (D-S.D.) May 6. He said of the unemployment provision, "We're doing this not because it's the decent thing to do, but because putting money in the hands of people who have to spend it quickly is one of the fastest ways to jump start the economy."

Former Web site designer Joe Bergmann, who was invited by the senators to speak at the briefing, said he has struggled to find a job since being laid off 18 months ago. He said he has exhausted all his unemployment insurance and has declared bankruptcy.

"Extended unemployment benefits would have helped when mine ran out last July," said Bergmann, who told his story to the House Ways and Means Human Resources Committee last month (70 DLR A-12, 4/11/03).

$21 Billion Balance in Trust Fund

A member of the New York Unemployment Project, Bergmann said, "We've paid into unemployment (insurance) and now there are some in Congress who won't let us collect on our insurance policy."

Sen. Richard Durbin (D-Ill.) noted that the unemployment trust fund stands at $21 billion, which could be used to pay additional benefits. "That fund after all is their money," Durbin said. "We're going to fight to make sure there is the kind of support they were guaranteed when the unemployment insurance system was set," Kennedy told reporters.

President Bush has requested a $726 billion tax package, but the House scaled it back to $550 billion and the Senate Finance Committee is expected to reduce it even further, possibly to $350 billion as it was instructed under a budget resolution. The White House is counting on the larger tax package to generate jobs.

White House spokesman Ari Fleischer, speaking to reporters May 6, cited figures from the Council of Economic Advisers showing that the smaller $350 billion package would create 425,000 fewer jobs than the $550 billion bill.

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