Despite improving economic indicators in GDP, consumer spending and business optimism, the United States’ unemployment rate remains high — flirting with double digits. Fifteen million Americans remain without work, and the economy is not improving quickly enough to land them on the job rolls. At the same time, Congress has become increasingly concerned with the federal debt — particularly given that the deficit has become a primary concern in American minds.
That tension is the backdrop to the alarm the White House started ringing this weekend. In a letter addressed to Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker Nancy Pelosi (D-Calif.) and House Minority Leader John Boehner (R-Ohio), President Obama called unemployment a “crisis” and pleaded with the four congressional leaders to pass bills to preserve jobs and gin up hiring. Obama is urging Congress to spend $23 billion to save public workers’ jobs and $25 billion on additional Medicaid funding.
“I am concerned … that the lingering economic damage left by the financial crisis we inherited has left a mounting employment crisis at the state and local level that could set back the pace of our economic recovery,” Obama wrote. “Because this recession has been deeper and more painful than any in 70 years, our state and local governments face a vicious cycle. The lost jobs and foreclosed homes caused by this financial crisis have led to a dramatic decline in revenues that has provoked major cutbacks in critical services at the very time our Nation’s families need them most. Already this year, we have lost 84,000 jobs in state and local governments, a loss that was cushioned by the substantial assistance provided in the Recovery Act. And while state and local governments have already taken difficult steps to balance their budgets, if additional action is not taken hundreds of thousands of additional jobs could be lost.”
Obama urged Reid, Pelosi, Boehner and McConnell to pass the jobs bill that will be debated in the Senate this week. The bill would restore extended unemployment benefits to hundreds of thousands of Americans, if only temporarily. (Senate Democrats hope to pass a more permanent fix later, in a separate bill.) The version of the bill passed by the House just before the Memorial Day holiday stripped out the COBRA extension, which helps the newly unemployed purchase health insurance, and cut Medicare payments to doctors. Obama also encouraged Congress to pass a bill to preserve local government jobs for teachers, firefighters and police officers. Without the federal help, local governments might be forced to cut hundreds of thousands of positions.
But Republicans have already signaled their intransigence on more spending for unemployment insurance extensions and other emergency federal spending — insisting that the Democrats are sacrificing fiscal responsibility on the alter of political concessions.
McConnell responded, “The original purpose of this bill is to give America’s job creators an assurance that the longstanding tax benefits they’re counting on to retain workers won’t be pulled out from under them. But because Democrats can’t seem to resist any opportunity to use a must-pass bill like this as a vehicle for more deficit spending, they’ve piled tens of billions of dollars in unrelated spending and debt on top of it, all at a moment when the national debt has now reached $13 trillion for the first time in history. This is fiscal recklessness, plain and simple.”
McConnell continued, “[E]ven in the face of public outrage, Democrats are showing either that they just don’t get it on this issue of the debt, or that they just don’t care.”