Both houses of Congress adjourned last night without passing an unemployment benefits extension of any kind, leaving for a weeklong holiday with more than a million Americans having exhausted their unemployment insurance benefits. GOP intransigence on this issue is difficult to unravel. The reason Republican lawmakers give for denying an extension of insurance claims is that they are guarding against deficit spending. Yet, in a cratered job market and with low consumer spending hobbling the recovery, cutting unemployment extension, of all the programs they could cut, makes no economic or mathematical sense.
There are many ironies here, the most obvious of which is that the GOP insists on offsetting the cost of an extension of unemployment benefits with other cuts out of concern for the deficit while simultaneously pushing for policies that will increase the deficit by far more both this year and in the future– that and the undisputed fact that the cost of extending unemployment benefits is a tiny fraction of this year’s budget deficit.
Here’s a chart from the Center on Budget and Policy Priorities that shows the primary inputs into the expected deficits for the next 10 years:
You will notice that for 2010, the economic downturn is responsible for more than $500 billion of the anticipated deficit, more than one-third of the total. The Bush tax cuts are responsible for another $300 billion or so in lost revenue. And the wars in Iraq and Afghanistan, which also win strong Republican support, are responsible for around $200 billion more.
The cost of the unemployment benefits extension for jobless and struggling Americans is a relatively tiny $34 billion.
More than that, at the same time Republicans are demanding the cost of the extension be offset by budget cuts, they’re simultaneously demanding the extension of the Bush tax cuts for the wealthiest Americans — which will add trillions to the deficit over the next ten years and are responsible for more than 20 percent of the deficit this year.