After nearly three months of fighting, Senate Democrats and Senate Republicans came to an agreement last week to extend unemployment benefits. On Wednesday, House Speaker John Boehner shot down the deal on the grounds that it doesn’t help create jobs—which is ironic, given that his party hasn’t offered a serious jobs agenda since the financial crisis.
More than 3.8 million Americans have been out of work more than 27 weeks, well above pre-crisis levels. Being out of work more than six months—a.k.a. long-term unemployed—is hard. You run through your rainy day fund and bills stack up. You become depressed and discouraged. Employers often refuse to even consider your application, even if you have the requisite experience.
Jobless benefits represent the one lifeline that the long-term unemployed have. They expired at the end of December after Republicans refused to extend the program. When five Senate Democrats finally reached that agreement with five Senate Republicans last week, agreeing to extend unemployment insurance for five months retroactively, it was a big deal. But a big obstacle remained: The House, where the Republicans caucus controls the chamber and conservatives control the Republican caucus. Sure enough, Boehner on Wednesday said, "We have always said that we're willing to look at extending emergency unemployment benefits again, if Washington Democrats can come up with a plan that is fiscally-responsible, and gets to the root of the problem by helping to create more private-sector jobs. There is no evidence that the bill being rammed through the Senate by [Majority] Leader [Harry] Reid meets that test."
In the past, conservatives have raised two main objections to extending unemployment insurance. One, which Kentucky Senator Rand Paul has made repeatedly, is that the benefits discourage work. The best academic evidence suggests otherwise—that the effect is minimal, at most. The other objection has been that any extension needs some kind of offsetting spending cuts, so that it doesn't increase the deficit. This measure has one. It's includes a budget gimmick called "pensions smoothing" and an extension of some custom fees.
Now, Boehner is invoking two new arguments. The first came in the form of a letter from the National Association of State Work Force Agencies, which argued that the Senate legislation “would cause considerable delays in the implementation of the program and increased administrative issues and costs.” Whether or not that's a valid concern, it's not clear why Boehner wouldn't simply try to amend the bill, in order to address what would seem to be a fixable problem. Boehner also complained that the bill didn't include any policies to create jobs—when, in fact, the Congressional Budget Office has found that extending unemployment insurance boosts demand and creates jobs. (People who get the checks tend to spend money right away, causing the economy to grow faster.)
Of course, most Democrats would happily support a bill that did more to strengthen the recovery, perhaps starting with spending on infrastructure. But Boehner and the Republicans want nothing to do with those proposals, instead preferring a series of House-passed bills that sponsors describe as "job creation measures." The problem is that these measures are supply-side policies that might help growth in the long run, but are not macroeconomic tools like fiscal and monetary stimulus to make up for a shortfall in aggregate demand. (Republicans oppose monetary stimulus too.) Boehner is just trying to find any excuse to deny the long-term unemployed a financial lifeline—including false claims that his party has a jobs agenda.