Stimulation-palooza: Temporary tax rebates, permanent jobless benefits
Two days ago, I highlighted the Senate push for cramming extended unemployment benefits into the economic stimulus package.
A House Ways and Means staffer today sends along the following sheet that underscores the permanent nature of “temporary” jobless benefits.
So, the tax rebates will be temporary. The unemployment benefits last forever.
Press on, Washington, press on:
“Temporary” Extended Unemployment Benefits?
History Tells a Different StoryThe House on January 29, 2008 passed a bipartisan economic stimulus bill that did NOT include provisions to extend unemployment benefits. However, the Senate Finance Committee (SFC) has decided to add a “temporary” extension of unemployment benefits to its version of this legislation.
But does “temporary” really mean this program will operate only “through the end of 2008,” as the legislation’s proponents suggest? Looking back at the history books reveals a different story – of past “temporary” unemployment benefit programs that were repeatedly extended, operating for years and costing tens of billions of dollars more than originally expected.
Unemployment benefit program 1991-1994
Original proposed program length: 8 months
Original estimated cost $7 billion
Actual length: 29 months
Actual cost: $39 billion
Number of extensions: 5
Unemployment rate at start of program: 7 percent
U rate at end: 6.4 percentUnemployment benefit program 2002-2004
Original proposed program length: 10 months
Original estimated cost $9 billion
Actual length: 29 months
Actual cost: $26 billion
Number of extensions: 2
Unemployment rate at start of program: 5.7 percent
U rate at end: 5.8 percentUnemployment benefit program 2008
Original proposed program length: 11 months
Original estimated cost $10 billion
Actual length: ? months
Actual cost: ? billion
Number of extensions: ?
Unemployment rate at start of program: 5 percent
U rate at end: ?1. SFC documents suggest the “temporary” extended unemployment benefits program would operate only through CY 2008 and cost $10 billion. But these sorts of programs never work out that way.
a. CRS reports that no “temporary” extended benefits program created since 1970 has expired without being extended.
b. Programs created in the 1980s and 1990s were extended 6 and 5 times, respectively.
c. The prospects a temporary program created today will expire at the end of 2008 as the SFC proposes – with the window of eligibility shutting two days after Christmas – is both dubious and would be without precedent in the last generation.
2. Even if it operated only as long as the “average” program created since 1980, a “temporary” program created now will be paying extended benefits in mid 2010.
a. The average duration of extended benefits programs created since 1980 is 30 months.
b. If a program started in February 2008 and paid benefits for 30 months, the final payments would be made in July 2010.
c. The total cost of such a program would likely be $30 billion or more.
3. If prior extended benefits programs began when the national unemployment rate was as low as 5.0%, these “temporary” programs would have operated for decades.
a. The U.S. unemployment rate was 5.0% or higher in every month between January 1974 and April 1997 – more than 23 years in a row.
b. Today’s 5.0% rate is below the average of the 1970s, 1980s, and 1990s.
c. During the Clinton Administration (1993-2000), the average unemployment rate was 5.2%.
d. According to a 2007 report by the Congressional Budget Office, today’s 5.0% unemployment rate is the same as the “natural rate” CBO will use “both currently and for the 10-year projection period through 2017.” Put another way, according to CBO today’s unemployment rate is “normal” not “high.”
e. Creating an extended benefits program now will create a precedent to repeat this action every time the unemployment rate reaches this historically modest level. That will cost billions of dollars and encourage more and longer unemployment.
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Welcome to the new America. Give us your tired your poor and especially your unemployable…..
……Don’t worry, we have millions of suckers here who we can bleed money from.
Your government at work. Buying the votes of the stupid lazy with the money of their working neighbors.
I’ve said before: I’ll vote for anyone with the stones to say “No. Get a job and take care of your self.”
Typical thinking inside the Beltway. None of them have to worry about job and family.
sorry – stupid and lazy
Between extended unemployment benefits and expanded S-CHIP provisions, what feasible incentives remain that will entice people to join the workforce? Gimme a break!
yep … just as we expected … and as I mentioned the other day on this topic … if these individuals have already used up their unemployment (normally 26 weeks or started approximately in August 2006) and now get “extended” that means they will probably also receive a “rebate” check … a classic case of “double-dipping” …
They keep forgetting that sooner or later, the bill is gonna come due. Then what? By that time there won’t be anything or anybody left to tax to pay for it
Looks to me like Nancy decided over Christmas break that the Dem’s performance stunk last year and since 2008 is an election year, they had better start doing something whether or not in the long haul it is good for the country. Nothing like giving away money yet not stimulating the economy in a way that actually works as a way to show Dems can accomplish something. The fact that it is stupid makes no difference. Dems can’t function if a good portion of the country isn’t dependent on their welfare state mentality.
They push, we gripe, they go ahead. They push till I hope I live long enough that every quarter and 4/15 enough taxpayers say enough. NO more money. That is the only way to get these idiots attention.
L
Historical data and evidence don’t matter to liberals. Just like they think they lost revenue when we cut taxes when the opposite actually happened.
They just can’t face the facts.
I like Sensenbrenner’s proposal of expediting the process by calling for an immediate halt to withholdings from worker’s paychecks for 2 months.
Checks wouldn’t be received until late May or June, further delaying the “stimulation” that this “rebate” is to encourage.
It makes too much sense, though.
The reasons for it to be a non-starter are obvious:
*Your legislator doesn’t get cred for giving you your money.
*The people who didn’t pay tax don’t get anything back.
*The people who pay the lion’s share of the tax burden would.
*Workers would realize how much is actually being taken out when they see the now much larger figure on their paycheck, and might just figure that they would like more of their own money in the future.
*etc
*etc
*puke
Sorry to be off topic on this, but hope my fellow Texans will appreciate this. Our dear governor is endorsing MC per HA.
L
So let’s just dispense with this election foolishness and declare Hillary the President. Then an unemployment rate of 5.0% will be “fabulous”.
/sarc off
I’m not an expert, but wouldn’t it follow that if you increase unemployment benefits, you increase unemployment?
Unemployment benefits for how long? What happend to all those jobs that Americans won’t do? All they’re going to do is get lazy, do-nothings to go on permanent unemployment. How’s that going to stimulate the enconomy?
Milwaukee, Sensenbrenner’s plan would only benefit those of us who actually are lucky enough to have a pay check. They must put money in the hands of those who don’t work and have plenty of time to vote. Don’t even get me started to rebates to people who don’t pay taxes in the first place.
This is just what the do-nothing Congress needed. I’m sure that we’ll see a spike in their approval rating from 11% to 12%.
I want to say I am sorry to all the MM posters that my governor Perry is backing McCain. Guess he is like our dear Kay. It makes me sick.
L.
I have an idiot, drug-addicted brother who is 43 years old and who has never held a job for longer than a few months (OK, OK – once he had a job for an entire year). Every now and then he calls the rest of us for money. When we point out to him that perhaps he ought to go to work and stick with it for longer than a few months, he starts yelping about how we don’t respect him, that he has “supported” himself for x number of years, yada, yada, yada.
Here’s the thing: He honestly and truly believes that sitting at home on “disability” or unemployment compensation “counts” as “supporting” himself. He really believes that.
Any program for an able-bodied person that runs for more than the few months people need to find a new job and get back on their feet is simply enabling people like my brother to leech off of the rest of us for extended and indefinite periods of time-and in my brother’s case, enabled him to continue his drug abuse, since there was no job to be lost. I suspect his situation is not an unusual one.
Yes, sooner or later…the lights come on, the music stops, the bar is closed and the party is over, leaving the bill to be paid. We taxpayers are going to have to pay a lot of money.
Well, if you can’t beat ‘em, join ‘em. Looks like the time is right to invest in distillers, brewers, flat-panel TV manufacturers, tattoo parlors, spinning rim distributors and cable companies.
A fool and his money are soon
partedpartyin’.Do I hear any of the POTUS candidates against this? Nope – guess NONE of them get my vote.
As I’ve said before – Doesn’t matter to me whether we get a socialist with an R after their name or one with a D. Might even be better with a D as the R’s will at least try to slow it down (hopefully).
#10 – While your statement is true – the goal of government should not be to collect revenue. It SHOULD be to govern – ONLY. And we have this little document in our country that even helps us know what governing should be. Some old (white, men) wrote it.
But Michelle, if they don’t extend the unemployment benefits, how do you expect those Americans who do the jobs illegal aliens will do to make any money? If they take away those unemployment benefits, those people might go find jobs and put some poor illegal alien out of work, and worse yet, eliminate one of the chief talking points of the open-borders lobby. We just can’t have that.
Gee, when I was unemployed last year I got exactly one unemployment check covering two of the four weeks I was out of work. I guess I was stupid for getting a job…. /sarc
Is he from Milwaukee area? My sis-in-law’s boyfriend fits this to a “T”. Friggin loser.
Wait wait, too fast, let me buy a house waaay beyond my means first, then I can quit my job and get endless benefits, as well as a bailout and a big fat rebate. Oh did I mention I’m here illegally? Not that it makes a difference.
/sarc
Wait! Wait! I’m having a vision here….I’m seeing that….
unemployment figures will rise dramatically as more lazy culls decides it behooves them to stay home and draw a check sucked off hard working Americans, instead of actually getting off their sorry posteriors and earning an honest living.
Do you think Nostradamus saw that one coming? *sigh*
How about this solution: Only the self-supporting can vote. If you get any government assistance(unearned money without working) you don’t have a say in how taxes are spent.