Monday, July 12, 2010

Cutting holes in the safety net

The death of Sen. Robert Byrd last month left Democrats with one less sitting member in the Senate, effectively destroying their immediate plan to pass a financial reform bill and to separately extend unemployment benefits prior to the July 4th recess.

An estimated 2 million Americans reached the end of their unemployment benefits during the six weeks the Senate has been debating the issue. The longer the debate continues, the more unemployed Americans join that group. Passing the proposed six-month extension is a challenge without Byrd in the Senate, but his temporary successor would provide the key 60th vote.

In just one week and in just one state -- last week in Missouri -- more than 8,300 people fell through the unemployment insurance safety net.

Actually, their nets were removed.

The result: Those who have lost jobless benefits already are turning in greater numbers to food pantries and other emergency aid programs, both government and nonprofit.

"We're hearing from more people needing assistance," said Ron Howard, spokesman for the United Way of Greater Kansas City. "Our 2-1-1 call center is seeing an increase in calls, especially from first-time callers.

"Without a doubt, the loss of that unemployment check is a contributing factor."

Advocates for continuing unemployment benefits note that the Congressional Budget Office has ranked unemployment insurance as the most effective form of economic stimulus.

“It gets money into the hands of the people who are most likely to spend it,” [Heidi Shierholz, an economist with the Economic Policy Institute] said. “It goes straight into their local economies when they use it to pay for their food and housing.”

One study indicates that $10 billion of unemployment insurance spending creates or saves 100,000 jobs.

“Do the math,” Shierholz said. “Failure to approve the $35.5 billion unemployment program translates into 350,000 jobs that aren’t happening. Whatever your feelings about unemployment insurance, you can’t ignore that there’s a drain on public assistance in other ways.”

Yes, I hope everyone will.

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