The proposed budget fails to extend unemployment benefits for 1.3 million jobless Americans and fails to restore food stamps to the poor.
Lost in much of the media’s coverage of Congress’s bipartisan budget bill is the fact that while the federal government will be free from worries about an impending shutdown for the next two years, the bill fails to protect the most vulnerable subset of Americans: the impoverished and unemployed.
The most controversial — and neglected — facets of the bill include the legislation’s failure to extend unemployment benefits for 1.3 million jobless Americans, failure to close a single tax loophole for the wealthy, failure to restore food stamps to the poor, contains no short-term stimulus, and does nothing about the long-term deficit.
In a guest post for the Christian Science Monitor, Robert Reich, chancellor’s professor of public policy at the University of California at Berkeley, who also served in three national administrations, most recently as secretary of labor under President Clinton, wrote that while on the surface the bill sounds good, in actuality it’s a bad deal for the country.
“About the only good thing that can be said about the budget deal just patched together by House Republican budget chair Paul Ryan and Senate Democratic budget chair Patty Murray is that the right-wing Heritage Foundation and the Koch brothers’ Americans for Prosperity oppose it,” Reich wrote.
He continued to say that “Although the deal overrides the dread ‘sequester’ that mindlessly cuts domestic spending (except for Social Security, Medicare, and Medicaid), it doesn’t put an end to the sequester. It merely postpones the sequester for two years.”
Though the bill would prevent another government shutdown from occurring on January 15, which is when the stopgap passed in October runs out, the budget bill doesn’t contain any effort to prevent another standoff over the debt ceiling in March when the borrowing authority of the government is exhausted.
Currently there are about three jobless Americans competing for every available job in the U.S., which according to Reich is a ratio worse than it was at the bottom of the last downturn, as 7 percent of Americans report they are unemployed.
The number of Americans who report being unemployed long-term or out of work for 27 weeks or longer is 2.6 percent, or about 37 percent of those who are unemployed — a figure that is higher than before the recession began.
To help those unemployed Americans stay afloat, the government created a $26 billion program that provides about $300 per week to the long-term unemployed. According to White House estimates, discontinuation of the program could result in an additional 1.3 million people no longer having jobless benefits come Dec. 28 when the program expires. An additional 3.6 million would lose their benefits by the end of 2014.
Currently, the federal extension only covers those Americans who have been unemployed for 73 weeks, as opposed to the usual 26 weeks of benefits that states normally provide.
“The nation still harbors an unprecedented number of long-term unemployed,” Reich said. “In past recessions emergency benefits continued until the rate of long-term employment hovered around 1 percent or less.”
But Sen. Rand Paul, R-KY, thinks a shortened benefits package would likely benefit Americans.
“I do support unemployment benefits for the 26 weeks that they’re paid for. If you extend it beyond that, you do a disservice to these workers,” he said. “When you allow people to be on unemployment insurance for 99 weeks, you’re causing them to become part of this perpetual unemployed group in our economy.”
Several other conservative voices agree and argue that unemployment compensation lessens an individual’s incentive to find a job, and argue that the longer a person is out of work, the harder it is for them to obtain one.
Although House Speaker John Boehner originally opposed any bill that included an extension of the long-term unemployment benefit program, the speaker recently said he would agree to extend the program if Democrats could find the money to fund the program. Since the bill fails to include an extension, it appears either the money wasn’t found or Democrats didn’t push very hard for this program.
The Senate is expected to vote on the Murray-Ryan bill this week, and President Obama has said he plans to sign it. But Senate Majority Leader Harry Reid addressed concerns about the impact the bill has on the poor, saying that Congress will address the unemployment benefits issue in January when lawmakers return from their holiday break.
Additional funding thrown at military, NASA
Though funding for unemployed Americans proved to be too difficult of a task to include in the budget bill, the legislation restores about $63 billion to programs and agencies that were cut earlier this year.
Under the budget bill, the Defense Department is expected to get back about $30 billion in the next two years — or about half of the available funds. Another large benefactor, expected to receive about $23 billion in additional funding, are federal agencies that conduct scientific research, which includes NASA.
On this past Sunday’s edition of “This Week,” Reich said that in reality the budget deal is marginal, but because Americans have such low expectations about what Congress can accomplish, we’ve labeled this bill as a triumphant bipartisan effort.
He added that the best part of the bill is that any argument can be made with the deal, as it’s not apparent whether the legislation calls for additional spending or a budget deficit reduction.
“You see what you want,” he said. “That’s the point.”
As Reich argued the bill does almost nothing for the poor, ABC news contributor Cokie Roberts responded that the bill does have some positive aspects, in that it keeps the government going and puts money back into some domestic programs that she said were particularly “screaming” in agony with the cuts they endured, particularly scientific research and defense programs.
Other scientific-focused federal agencies that should also expect a portion of that money include the Department of Energy and Water, the National Institutes of Health and the Department of Interior and Environment. How exactly that money will be divided is not yet known, as that will be left for appropriators to determine.
While there are few spending increases, the lack of a provisions creating additional tax revenue means that in the next 10 years, the budget bill will save $85 billion, or about 1 percent of the U.S.’s projected $6.3 trillion deficit.
Though there are no tax increases, the bill generates income to reduce the deficit with its $13.6 billion in new or increased fees, reduction in pension benefits for uninjured military personnel by $12 billion. The bill also extends $28 billion in Medicare cuts, but prevents a cut in pay for doctors treating Medicare recipients.
Cuts continue to impact poor
Congress may have come to an agreement regarding the budget, but one piece of legislation lawmakers have yet to pass is the farm bill, which includes spending for food stamps and expanding crop insurance for farmers, among other issues.
Last week, the House passed a one-month extension of the current law, but the legislation failed to address some issues, including government dairy subsidies, meaning that the cost of a gallon of milk may increase to $8 in January 2014. Failure to pass the law could result in a surge of other grocery items as well, as farmers may not be able to plant as many crops without knowing how many subsidies they will receive.
Part of Washington’s inability to pass a new five-year farm bill — a piece of legislation that is worth about $500 billion roughly — is largely due to differences in opinion on crop subsidies and how much money to cut from food stamp programs.
Each year the U.S. spends about $80 billion on its food stamp program. During the summer, the House passed a bill that would cut $4 billion from food stamps annually and allow states to create new work requirements for some recipients. But the Democratic Senate, backed by President Obama, felt those cuts were a bit drastic, and passed a bill with a $400 million annual cut, or a tenth of what the House wanted to cut.
As a result, the bill has gone nowhere.
According to a report in the News Observer, “Republicans in the U.S. House are holding up the bill at the urging of groups like Americans for Prosperity, the conservative advocacy group funded by David and Charles Koch. These groups want to use the bill to cut $39 billion from SNAP, the Supplemental Nutrition Assistance Program previously known as food stamps.”
Though Republicans often argue that SNAP and other welfare programs fund laziness, Angel Taveras, the Democratic mayor of Providence, R.I., said “SNAP is a critical benefit for those who need it,” and its importance goes far beyond being a safeguard against hunger.
“Providing access to healthy food builds healthier communities. In addition to SNAP, the Farm Bill includes nutrition programming that provides children and families with information about, and access to, healthier foods,” he said.
Taveras encouraged his fellow lawmakers “to recognize the important role that SNAP benefits and nutrition programming play in cities across the United States,” saying “These are not ‘feel good’ programs that can be used as bargaining chips on the congressional floor; these programs are a vital part of building healthier communities and a healthier future for our children.”
Reich expressed similar comments on “This Week,” when he pointed out that income inequality is an issue happening all over America, “And it is happening in a way that has to do with the fact that wages, median wages, are going nowhere and rents are going up. And there’s absolutely no response in Washington or elsewhere.”
He added that next year is the 50th anniversary of the U.S.’ war on poverty, and said that while the war on poverty saw success at one point, over the last 30 years, “much the ardor, much of the concern, much of what propelled that war on poverty has dissipated.”