Politics August 24, 2014: Obama shifts from easing unemployment with benefits extension to job creation




Obama shifts from easing unemployment with benefits extension to job creation

By Bonnie K. Goodman

Examiner.com, August 24, 2014, 6:23 AM MST


President Barack Obama delivers his weekly address on the US Export-Import Bank, job creation, and the recovering economy, Aug. 23. 2014

Win McNamee/Getty Images / White House

The year 2014 started with the main issue revolving America’s unemployment and the expiration and renewal of the Emergency Unemployment Compensation (EUC) program and helped the long-term jobless, but now both Congress and President Barack Obama are emphasizing job creation as the economy recovers and the short-term unemployment rate falls. President Obama used his weekly address entitled “The Export-Import Bank” released on Saturday morning, August 23, 2014, to boast of the economic recovery, the lowering short-term unemployment rate and urged Congress to renew the charter for U.S. Export-Import Bank, which is set to expire in September.

Win McNamee/Getty Images

The EUC program which helped Americans unemployed for more than 27 weeks expired on Dec. 28, 2013. One bill the Emergency Unemployment Compensation Extension Act of 2014 that Senators Jack Reed, D-RI and Dean Heller, R-NV co-authored and co-sponsored passed in the Senate in April. Speaker of the House John Boehner, R-OH, however, failed to put the bill to a vote before its June 1, 2014, deadline, because it did not include job creation measures.

On Tuesday, June 24, 2014, Reed and Heller unveiled a new bill, extending benefits for five months without a deadline and the retroactive element included in the first bill, but there is still no job creation measures. The House also introduced its own bipartisan unemployment extension bill co-authored and sponsored by Representatives Frank LoBiondo, R-NJ-02 and Dan Kildee, D-MI-05 and introduced on Wednesday afternoon, June 25, 2014. There has been no action in the House or Senate on either bill before the August Congressional recess.

The GOP have been emphasizing job creation rather than unemployment benefits because they believe it perpetuates unemployment. The Republicans are also quoting new research to back-up their assertion including the National Bureau of Economic Research concluded in a recent study released this past spring that “unemployment benefit extensions can account for most of the persistently high unemployment after the Great Recession.” Additionally, researchers at “Federal Reserve banks in Dallas and St. Louis” have also determined in their regional studies that long-term unemployment benefits prolong unemployment, the unemployed have less of an incentive to get a new job or even actively look for work.

Another study, however, contradicts that claim, Andrew C. Quinn of the Conservative American Enterprise Institute recently brought up a 2012 study done by Stanford University sociology professor Cristobal Young who concludes “Unemployment benefits make unemployment easier.” The study entitled “Losing a Job: The Nonpecuniary Cost of Unemployment in the United States” also looked at the psychological effects of unemployment and Young determines unemployment makes people unhappy and even if they would collect their full wages, without working for them Americans are miserable. Young wrote; “Unemployment benefits merely take a little bit of the edge off the happiness downdraft from being laid off. To be sure, the financial help cuts back on some stress at the margins. But just as clearly, involuntary idleness brings a massive psychological cost that mere money can hardly touch.”

Since President Barack Obama announced his economic opportunity program during his State of the Union address in January 2014, he has signed over 20 executive orders to help the economic plight of lower income and middle-class Americans, but there is one area he has not done any action to extend unemployment benefits for the long-term unemployed.

Obama used to regularly pressure and criticize Congressional Republicans for not passing the extension in speeches, but as the year wore on, he has increasingly overlooked the issue even after the Reed-Heller adopted in the Senate. Even ignoring Speaker Boehner begging the president or the White House to provide him a list of mutually acceptable job creation measures to add to the Reed-Heller bill to put the bill to a House vote.

Now President Obama spends more time in speeches praising his administration’s part in the economic recovery, than remembering the still increasing long-term unemployment rate. In his weekly address Obama gave himself again a pat on the back stating “Nearly six years after the worst financial crisis of our lifetimes, our businesses have added nearly 10 million new jobs over the past 53 months. That’s the longest streak of private-sector job creation in our history. And we’re in a six-month streak with our economy creating at least 200,000 new jobs each month — the first time that’s happened since 1997.”

The June jobs report and the July jobs report released by the Bureau of Labor Statistics on Friday morning, Aug. 1 has been misleading and assisting Republican opponents of the unemployment benefits extension. The July jobs report showed good news about the economy, specifically regarding short-term term unemployment and job creation. According to the report, however, the unemployment rate rose slightly from 6.1 percent to 6.2 percent. Still, 209,000 jobs were added and 238,000 created.

The bad news of the July jobs reports continued to be the persistent long-term unemployment rate. Over three million long-term jobless Americans have been unemployed for more than 27 weeks; they need the benefits to survive. Although the total unemployment rate keeps falling each month, the long-term jobless rate remains virtually the same with high numbers at 3.2 million for July. The long-term unemployment fell by 293,000 and in total has dropped 700,000 in the past three months since March, and dropped by 1.1 million since July 2013.

President Obama has joined the Republicans in emphasizing job creation more than helping the long-term unemployed with benefits they need now. In his weekly addressObama indicated that the U.S. Export-Import Bank’s “sole mission is to create American jobs. That’s it. It helps many American entrepreneurs take that next step and take their small business global.”

This time President Obama is attacking Republicans for not renewing the job creating a charter, which always had bipartisan support in the past. Obama recounted; “Now, past Congresses have done this 16 times, always with support from both parties. Republican and Democratic Presidents have supported the bank, too. This time around shouldn’t be any different. Because the bank works. It’s independent. It pays for itself. But if Congress fails to act, thousands of businesses, large and small, that sell their products abroad will take a completely unnecessary hit.” The president is urging Americans to pressure their Congressional representative into renewing the charter

The GOP House was more open to passing job creating legislation versus the unemployment benefits extension, passing the Senate’s bipartisan job training bill the “reauthorization of the Workforce Investment Act (PL 105-220).” The bill reforming federal training programs passed with overwhelming support in both houses, in the Senate the bill as passed in June by a vote of 95 to 3 and in the House on Wednesday, July 9 with a vote of 415 to 6. Yet, two unemployment benefits extension bills sit struck in the committee stage.

Senate Majority Leader Harry Reid, D-NV promises to still put the new Reed-Heller bill to a vote. The Senate returns, however, on Sept. 8 and Reid wants to recess for the midterm election campaign only two weeks later on Sept, 23 leaving little time to push through a vote. Still, as Learning and Finance point out, the Democrats might use the unemployment benefits extension as a campaign issue and push through the bill.


Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. She covers US, Canadian & Israeli politics, with a particular focus on the Obama presidency, Congress, domestic policy, and elections.

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