Recession and the need for stimulus argue for putting money in pockets.
Congress is kicking around the notion of extending unemployment benefits for those whose checks have stopped because they've exhausted their state allowances. In the environment of recession we're spiraling into, the idea is a good one -- especially here in the Valley.
H.R. 5749, which passed out of the House Ways and Means Committee last week, would provide 13 weeks of benefits to workers in all states, plus another 13 weeks to those in "high unemployment" states. A Senate version that fell one vote short in January is similar, but would set the bar for defining "high unemployment states" higher.
That's significant. The House bill sets the standard for "high unemployment" at 6%, which would include California -- at 6.2% -- and four other states. The Senate's mark is 6.5%, which would exclude all the states except Alaska and Michigan.
At a time when the economy needs all the stimulus it can get, injecting the money paid in unemployment benefits into the system benefits us all, not just those who are out of work.
In a letter to leaders in Congress, Gov. Arnold Schwarzenegger wrote, "There is widespread agreement among economists that extending [unemployment] benefits is one of the most effective ways to stimulate a distressed economy. The money will go into the hands of unemployed workers, who will spend it immediately to meet pressing needs. If legislation extending [unemployment] benefits by 13 weeks were enacted today, those payments would infuse approximately $1.7 billion into California's economy."
That's a real stimulus.
Furthermore, studies have shown that people who are receiving unemployment benefits are much less likely to lose their homes. That's a serious consideration given the foreclosure crisis we're facing.
An extension of benefits would have a big impact in Fresno County, where more than 12,000 workers exhausted their benefits between October 2007 and last month. Statewide, about 444,000 have seen their benefits run out, according to a letter sent by Gov. Arnold Schwarzenegger to leaders in Congress.
And it gets worse. The National Employment Law Project estimates that another half-million Californians will exhaust their benefits in the coming year.
Getting an extension measure through Congress may be the easiest part. Democratic leaders proposed attaching the measure to President Bush's war funding bill, along with an increase in education benefits for veterans. But Bush has threatened to veto any bill that goes beyond paying for the expense of the wars in Iraq and Afghanistan.
An easier course, as some in Congress contemplate, might be to include the unemployment and veterans benefits in a second economic stimulus bill.
Either way, workers in California and elsewhere need the help. Congress and the president ought to provide it, and soon.