The senator takes a stand, but on the wrong side

Posted: March 07, 2010

It was a scene that would have made Hollywood director Frank Capra proud. Sen. Jim Bunning (R., Ky.) stood up courageously to stop Congress from committing a very popular move: sending unemployment checks to thousands of jobless Americans. Democrats could hardly believe their good fortune.

It was one of those congressional moments that tells you everything you need to know about why Washington doesn't seem to work these days: Neither side sounded as if they were listening to themselves, let alone to anybody else.

Bunning objected to a request from a fellow Republican, Sen. Susan Collins of Maine, to pass a 30-day extension of jobless benefits and other expired measures included in a $10 billion spending bill.

By blocking the measure, which also would extend health-insurance benefits, highway funding, and Medicare payments to doctors, Bunning vividly illustrated that Republicans are "the Party of No" and the real reason for congressional gridlock on other issues such as health care.

Bunning said he was fed up with Congress' Wall Street bailouts and other big spending, without finding ways to pay for them. That's a laudable principle. It's just too bad that he decided to take out his anger on the jobless on Main Street.

Although Bunning immediately became a hero to fiscal conservatives and certain mad-as-hell talk-show hosts, when reporters sought reactions from his fellow Republican senators, most of them ran for the tall grass. It's not great politics to hold up aid to jobless workers during an election-year recession.

When Senate Minority Whip Jon Kyl of Arizona tried to offer a silver lining of sorts on the floor of Congress, he sounded a bit like Ebenezer Scrooge decrying the "surplus population" and praising Victorian workhouses.

Unemployment insurance "doesn't create new jobs," he said. "In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work."

Kyl's reasoning is sound, I am sure, in the supply-side economists' universe, but his rhetoric showed little connection to the reality inhabited by today's unemployed.

For one thing, unemployment benefits are not a welfare check. Limited to those who have lost their jobs, unemployment payments pay too little to discourage very many of the laid-off from seeking new work, especially if they're trying to support a family.

That commonsense observation is supported by the nonpartisan Congressional Budget Office. A February CBO analysis of policy options to increase economic growth and employment concluded that extending unemployment benefits would spur economic activity and employment in a timely way. As CBO Director Douglas W. Elmendorf reported to Congress, households receiving those benefits "tend to spend the additional benefits quickly."

Bottom line: The CBO estimates those policies would raise employment and productivity over the next five years by as much at $1.90 per dollar of cost to the federal budget. As much as Bunning might think of unemployment benefits as a budget-buster now, they actually could be a budget-enhancer.

Congress talks a lot about subsidizing big businesses to create jobs, even as many of those businesses cut jobs to enhance their profits. Think of unemployment benefits as a way to stimulate the economy - by giving the money to consumers first.

Clarence Page is a Chicago Tribune columnist.

E-mail Clarence Page at cpage@tribune.com.

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