Labor Secretary: Failing to Extend Federal Payments to Unemployed Will Increase Unemployment

November 30, 2011 - 7:42 PM

Solis Employement

Labor Secretary Hilda Solis. (AP Photo/Manuel Balce Ceneta)

(CNSNews.com) - U.S. Labor Secretary Hilda Solis said Wednesday that failing to extend the length of time that unemployment workers are eligible to receive federal unemployment payments “will mean an increase in the unemployment rate.”

An extension in unemployment benefits that Congress and President Obama enacted a year ago is set to expire at the end of December.

At the same briefing on Capitol Hill, Sen. Jack Reed (D-R.I.), echoing House Minority Whip Steny Hoyer (D-Md.), said that lawmakers may lose their “soul” if they fail to pass legislation to extend unemployment benefits for the long-term jobless.

“Extending unemployment benefits kept 3.2 million Americans out of poverty last year alone, according to the U.S. Census Bureau. A year ago President Barack Obama reached a bi-partisan compromise that kept 7 million Americans from losing these very important benefits,” said Solis.

“If the Republicans do not join hands with us again, it will mean fewer dollars flowing to groceries, to gas stations, to retailers, to businesses, and food on the table for millions and millions of families and their children,” she said. “It will mean that small businesses will close their doors because they won’t be able to meet their payroll. It will mean more layoffs. It will mean an increase in the unemployment rate. And I’m here to tell you that we need to do everything we can to convince members of both houses -- and the senate-- to do the right thing. It’s the American thing to do. We don’t have any more time to waste.”

'Where do we stop?'

On the other side of the issue, GOP presidential hopeful Herman Cain has argued against extending jobless benefits that currently allow up to 99 weeks of taxpayer money for the long-term unemployed.

"Where do we stop?" Cain asked in an interview on CNN's "State of the Union. Cain said extending unemployment benefits -- and extending the cut in the payroll tax -- misses the "bigger problem," which he identified as "lack of economic growth." Moreover, he said a benefits extension would mean "we're spending money we do not have."

"It's unfortunate that people are unemployed," Cain agreed, making another pitch for his 9-9-9 tax plan. "People need to go -- want to go -- back to work," he said. "That's the good news. But this economy's not producing the jobs in order to get 14 million people that are unemployed back to work."

But Labor Secretary Solis argued, “With so many families hurting, we can’t afford to cut off this important lifeline. By helping these families and their children, we’re also helping our economy. It will help us to recover fast and we’ll grow. Economists from both the left and right agree that we need to extend unemployment benefits and avoid the disastrous payroll tax increases.”

If Congress fails to act, Solis said 5 million Americans will lose their unemployment benefits next year, and those laid off after July 1, 2011 will be eligible to receive only six months of assistance.

“Two federal programs – Emergency Unemployment Compensation and Extended Benefits --  have been a lifeline for 17.6 million Americans since 2008,” Solis said.

“If you factor in family members, these benefits have helped provide basic necessities to over 50 million people, including 12 million children. Unemployed workers typically qualify for about 26 weeks of benefits … in recent history extensions have lasted two and three years after the official end date of a recession, so there is nothing unusual about this extension.”

Sen. Reed, echoing Solis, said that extending jobless benefits would alleviate the unemployment rate. He added that if Congress failed to do so, lawmakers might lose their “souls.”

“We have to pass the extension of unemployment benefits, it’s absolutely, essential,” said Reed.  “If we fail to do this, we could lose not only our souls as been discussed here today, but $72 billion in economic activity next year translating to about 560,000 jobs. This is not just about keeping families together [and] keeping some food on the table. This is about keeping our economy moving, moving forward. We have to do this because the impact as the [Labor] Secretary said will be felt in every community in this country.”

Steny Hoyer

House Minority Whip Steny Hoyer (D-Md.). (AP Photo/Alex Brandon)

“This is an imperative. It has to be done,” he said. “It makes sense to the families of America. It makes sense to the economy of America and it makes sense for our ultimate commitment to get people back to work and get this economy moving forward again. We have no more pressing or important issue before we leave than to assure working men and women across this country that they will have the opportunity to have some support as they struggle to find work in a challenging economy.”

Rep. Bobby Scott (D-Va.) agreed that extending the unemployment benefits to the unemployed will be good for the economy.

“We need to make sure that we extend this,” said Scott.  “We have been told from all the economic models that the unemployment compensation is the best way to stimulate the economy. If we do not extend the unemployment compensation we’ll be taking all of that money out of the economy and the results will cascade throughout our economy.”

Minority Whip Hoyer said that the battle over extending those benefits by Dec. 31 will “test whether the Congress has a heart and a soul.”

“There is no more important piece of legislation that we need to pass than the extension of the unemployment insurance benefits for our people,” Hoyer further said.

In urging Congress to extend the benefits, Solis also said, “5 million Americans will lose their unemployment benefits next year unless this Congress acts. Some lawmakers say that we can’t afford to extend unemployment benefits and the payroll tax relief in the current fiscal environment, but I say we can’t afford not to.”

“Two federal programs – Emergency Unemployment Compensation and Extended Benefits --  have been a lifeline for 17.6 million Americans since 2008,” she said. “If you factor in family members, these benefits have helped provide basic necessities to over 50 million people, including 12 million children. Unemployed workers typically qualify for about 26 weeks of benefits … in recent history extensions have lasted two and three years after the official end date of a recession , so there is nothing unusual about this extension.”

Reps. Lloyd Doggett (D-Texas) and Sander Levin (D-Mich.), who also spoke at the press conference today, have introduced legislation to extend the federal unemployment programs through the end of 2012.

Without legislation to extend benefits for the jobless, federal extended unemployment befits will expire on New Year’s Eve 2011. This is the second consecutive holiday season that lawmakers must battle whether or not to prolong the benefits for those who have been unemployed six months or longer.

Sen. Tom Harkin (D-Iowa) vowed during the press briefing that “there will be no Christmas for Congress unless there is an extension of the unemployment insurance before we leave here.”