In an appearance on This Week, former Fed Chair Alan Greenspan said he sees the unemployment rate rising above 10% and staying there for a while, but he’s particularly concerned with the number of people who have been unemployed over six months. Greenspan says that prolonged unemployment can lead to an “erosion” of skills in workers which would be an “irretrievable loss.” Although he says he opposes further “stimulus” spending (the non-stimulative nature of unemployment spending, which actually pumps $1.63 into the economy for every dollar spent, is a popular Republican trope), Greenspan supports an extension in unemployment benefits. So did fellow guest Sen. John Cornyn.
So does the House of Representatives, which voted 331-83 last week to extend benefits an additional 4 weeks for all states and 13 weeks for states with over 8.5% unemployment. The Center on Budget and Policy Priorities says that 80% of the long-term unemployed would be covered by the longer extension, which the House says would be revenue-neutral, since it would be paid for by a temporary increase in unemployment taxes.
In the Senate, however, Senators whose states don’t reach the 8.5% cutoff are planning to hold up the bill, demanding that the longer extended benefits go to the unemployed in all states. Sen. Jeanne Shaheen of NH is planning to offer an amendment next week which would increase the benefit for all states to 13 weeks, and in the worst-hit states to 17. The House rejected a longer increase for lower-unemployment states in the debates for their version of the bill.
If they can’t come to an agreement, 40k people in NYS, where the current unemployment rate is above 10% now, could lose benefits. The city currently has the highest unemployment numbers in the state.
This article from the Village Voice Archive was posted on October 4, 2009