A top member of President Obama’s economic brain trust greeted 2014 with a rambling, anti-economic plea for the twelfth extension of federal unemployment spending, ignoring the administration’s own role in winding down extended unemployment benefits.
“This New Year’s Day, there is likely less joy and more fear and distress in the homes of 1.3 million Americans who this week have seen their unemployment insurance suddenly cut off,” Gene B. Sperling, director of the National Economic Council, wrote Wednesday in a statement heavy on vague claims and strawman arguments.
“The claims by some that those experiencing long-term unemployment are solely at fault are belied by the countless accounts of the names, faces and stories of responsible Americans among those 1.3 million who have worked hard their whole lives and are fighting to find a new job to support their families,” Sperling wrote.
Sperling did not name anybody who supposedly made this claim. In fact, it is hard to find anybody claiming the long-term unemployed are solely responsible for the stagnant economy, and virtually impossible to find any prominent politician or pundit making this claim.
Proponents of reducing the extended federal emergency jobless benefits program — which began under President George W. Bush in 2008 and has been extended 11 times since then — instead argue that extended benefits correlate strongly with higher long-term unemployment and that broke federal and state governments have no more money to cough up. At their most outré, reduced-benefits advocates might argue that paying a person not to work, though it may be a merciful act in the short term, lessens that person’s incentive to find employment and increases his or her incentive not to settle for a less attractive or lower-paying position — a completely non-controversial point that few economists would dispute.
Sperling doesn’t mention that a majority of congressional Democrats agreed to end emergency benefits at the end of the month, as did President Obama. The Ryan-Murray budget deal that ended sequestration of some federal spending also ended the federal unemployment guarantees — which kick in after state benefits are used up. More Democrats than Republicans voted for the high-spending budget compromise in December. Sperling’s own boss signed the budget during his Christmas vacation in the low-unemployment state of Hawaii.
Nevertheless, Yale Law School alumnus Sperling, whose private sector experience consists mainly of leveraging his political connections for extremely lucrative speaking and consulting contracts, predicted dire consequences if the federal government stops paying people not to work — and big success if it continues doing so.
“Failing to extend emergency unemployment insurance through 2014 will negatively impact 14 million Americans — the 4.9 million workers who will see unemployment insurance cut off and the approximately 9 million additional family members they are supporting,” Sperling wrote. “But if Congress does the right thing and acts to extend emergency unemployment benefits through 2014, it is estimated to lead to 200,000 jobs and a fifth of a point of additional economic growth.”