No sale to the press corps on unemployment insurance

While I was drafting yesterday’s skeptical post on the President’s partisan attack on unemployment insurance, I should have been watching White House Press Secretary Robert Gibbs in the daily press briefing. From their questions it appears the White House press corps drew conclusions quite similar to mine.

Within hours the Senate will vote to invoke cloture on H.R. 4213, a “tax extenders bill” already passed by the House. I’ll gloss over some tricky process details, but the key substance is an amendment by Senator Reid.

The Reid amendment

Here are some details of the pending Reid amendment, courtesy of Senator John Thune’s staff on the Senate Republican Policy Committee and Senator Judd Gregg’s Budget Committee staff.

  • The Reid amendment extends unemployment insurance benefits through November 30, 2010. These benefits would be retroactive to June 2, 2010, when the last law expired. No UI benefits under this law would be payable after April 30, 2011.
  • The February 2009 stimulus law created a supplemental $25 per week UI benefit. The Reid amendment would not extend that provision.
  • The $34 B of additional unemployment spending over the next decade would be designated as an emergency, meaning it would not be subject to paygo requirements and therefore does not need to be offset with other spending cuts or tax increases to avoid a 60-vote point of order.
  • Despite intense lobbying from the States, the Reid amendment does not extend the higher federal match rate for Medicaid expenditures. If this Medicaid money doesn’t make it into this bill, it probably won’t happen as there are few other legislative trains leaving the station this year.
  • The Reid amendment also contains a homebuyer tax credit provision that was separately enacted into law right before the Independence Day recess.

Assuming cloture is invoked this afternoon, Senator Reid will be able to offer amendments to modify his amendment with a majority vote. I expect he will strike the duplicative homebuyer tax credit provision. We will see if he tries to make other more significant changes.

The November 30 expiration date means Congress will wrestle with this question again in a post-election lame duck session in November/December.

Recent UI history

Courtesy of the staff of House Ways & Means Committee ranking Republican Dave Camp, here are the total Unemployment Insurance costs of seven laws and the new pending bill over the past recession and recent recovery period:

Date Law/Bill CBO score ($ B)
1 July 2008 H.R. 2642 13
2 Nov 2008 H.R. 6867 6
3 Feb 2009 H.R. 1 (stimulus) 39
4 Nov 2009 H.R. 3548 (offset) 2
5 Dec 2009 H.R. 3326 11
6 Mar 2010 H.R. 4691 7
7 Apr 2010 H.R. 4851 13
8 July 2010 H.R. 5618 / H.R. 4213
(proposed)
34
Total spending $125 B
Total offset $2 B
Total deficit increases $123 B

From this table I draw a few conclusions:

  • Assuming this new bill becomes law, Congress will have spent or committed $125 B for additional Unemployment Insurance benefits since the beginning of the recession. That’s not total UI spending, but the increment resulting from legislative action.
  • Of this amount only $2 B was offset. The other $123 B increases the deficit and debt.
  • This cuts both ways. Democrats can argue precedent, while Republicans can argue that past deficit spending makes offsets now even more necessary.

Team Obama’s intellectual inconsistencies on unemployment insurance

  1. The Obama Administration has previously supported offsetting the cost of extended UI benefits. In support of the November 2009 law (H.R. 3548) which offset $2 B of unemployment insurance spending, Team Obama’s Statement of Administration Policy said: “The Administration supports the fiscally responsible approach to expanding unemployment benefits embodied in the bill.” At the time the unemployment rate was 9.8%, higher than it is now.
  2. The President attacked Republicans for opposing deficit-increasing unemployment insurance extensions while supporting deficit-increasing extensions of tax relief. But the President has proposed extending much of that same tax relief without any offset.
  3. The President attacked Republicans for opposing extensions of UI benefits, while the Senate Republican Leader has explicitly supported such an extension on Sunday. The actual dispute is instead over whether the costs should be offset.
  4. White House Press Secretary Robert Gibbs argued the bill should be passed without offsets to avoid legislative delay. But as a reporter’s question suggests below, that delay results from a disagreement between the two parties, and either side could have instantly resolved it by conceding on the offset dispute. The delay is the result of both sides prioritizing the budget offset question over immediate action.

A skeptical White House press corps

The White House press corps exceeded themselves yesterday in their questions of Mr. Gibbs after the President’s Rose Garden attack. The transcript does not identify specific reporters so we lose something by stringing all the questions together in sequence like this. As best I can tell, at least half a dozen reporters are responsible for the questions below.

You can see Mr. Gibbs’ answers in the full transcript. I find looking at just the questions interesting because it effectively conveys Team Obama’s message failure yesterday.

While the President will soon sign into law an extension of unemployment insurance, he failed to convince the White House press corps with his Rose Garden remarks.

Q: On unemployment, on the extension of the benefits, it looks like the Democrats will certainly have the 60 votes they need tomorrow to get past filibuster and move this into law. So with that being known, I’m trying to understand why the President did what he did today. What’s the point of calling out the Republicans if you know you’re going to have the votes?

Q: But does giving a statement like this in the Rose Garden, is it intended in any way to actually try to win one of the lawmakers’ support?

Q: Well, I guess that’s — just to wrap up on this point — I guess that’s my point, is that it seemed extremely clear what the President’s view is on this. He talked about it over the weekend, he’s talked about it in the past —

Q: So you don’t see this as the kind of political theater, the back-and-forth that the President was elected to stop?

Q: The President said Republican leaders in the Senate were advancing the misguided notion that the unemployment benefits discourage people from looking for a job, but the Republican leaders from Mitch McConnell on down have said that they are in favor of extending unemployment benefits but that they want the cost of that extension to be paid for with cuts to other programs. What’s wrong with that?

Q: But couldn’t Democrats have solved this instantly by simply saying, we’re going to extend unemployment benefits and we’re going to pay for it with offsetting cuts?

Q: But “pay as you go” is the very principle the President has put forward himself. They’re saying that now because of big deficits we need to pay our way.

Q: And let me just ask you one other thing on this. The so called “99ers,” people who have been unemployed for 99 weeks or more, their benefits are not going to be extended under this. Is the President aware of their plight? And does the President favor doing something to help them out?

Q: So you say that we ought not to be playing politics, and yet it seems that the President himself was suggesting that the Republicans were playing politics. He said, it was time to look past the election out there this morning. And yet when everybody knows this is going to pass tomorrow, how can you say that the President is not indulging in a little politics?

Q: But it’s not political to talk about it for the last four days knowing that you’re going to get it anyway?

Q: Quickly on unemployment, is there a line, once we drop below 9 percent the administration is not going to push for extending unemployment? When do you stop extending unemployment benefits? I mean, where’s that line?

Q: Do you anticipate in three months you’re going to be asking for another extension?

Q: Robert, if the President pushed for the reinstatement of “pay as you go,” what point was it if he is going to allow or go along with exemptions or exceptions for something like unemployment?

Q: But it’s spending. It goes on the deficit and in the debt.

Q: Could you apply PAYGO to unemployment benefits as quickly as not? Or are you saying it would take much longer?

Q: A follow-up again. Last month, when the issue came up in the Senate, the Republicans pointed to $50 billion in un-obligated stimulus money to pay for it, but Senator Reid objected. What would be wrong with taking that un-obligated money?

Q: I just want to make sure I understood what you were saying to Chuck about unemployment. You — the team essentially assumes right now — things could change — that unemployment is likely to be at 9 percent or higher by the end of this year?

Q: I threw that out to you — I said, is 9 percent the line with which you guys would stop asking for extensions? You said, it might be the line where we would stop, and then —

Q: And it is still an open question whether at the end of this year, at the end of November 30th, when these, if you get them, are due to expire, if you get them again?

Q: And just to follow up on Jonathan’s question, to Republicans who argue, yes, historically we have paid for these through deficit spending but we’ve never before had $13 trillion in the debt, we’ve never had a fiscal year situation except for last year where nine months into the fiscal year we’re already at a deficit of $1 trillion — conditions have changed and they require a different look and a different approach — to that you would say what?

Q: Coming at this from another direction, you described the unemployment situation as an emergency. Most economists don’t think we’re going to come rebounding out of this recession very quickly. Is there a point at which this relatively high level of unemployment becomes more of a chronic condition and therefore does in fact have to be paid for out of a regular budgeting process?

Q: Could they envision a time coming where they do, in fact, start —

Q: I’m wondering if it’s — and I understand what you’re saying, in the past it’s always been understood that in this kind of a recession it’s okay to add to the deficit for something like unemployment insurance. But if you can’t find $35 billion, how can the American people be confident that when it comes time to really solving the deficit and debt problem you’ll be able to find what you need?

Q: Are you talking about patching the roof with borrowed money or cash? That’s all. We’re not questioning whether you should patch the roof. It’s just how are you going to pay for it — with a credit card or with cash?

Q: You’re saying there’s no alternative to borrowing?

Q: But do you think it’s possible that even people on Capitol Hill who are being hypocritical have the support of the public in this because the public has this … feeling about the deficit?

While the President will win the vote, he lost the debate.

(photo credit: Jeremy Brooks)

By | 2017-05-23T19:06:23+00:00 Tuesday, 20 July 2010|