Pelosi: Unemployment Benefits ‘One of the Most Important Stimuli for the Economy’

By Elizabeth Harrington | December 6, 2012 | 12:51pm EST

House Minority Leader Nancy Pelosi (D-Calif.) (AP)

( – House Minority Leader Nancy Pelosi (D-Calif.) said unemployment insurance benefits act as a “safety net for our whole economy,” adding that they simultaneously  constitute “probably the most important” stimulus for the economy.

During a Capitol Hill press conference on Thursday, a reporter asked Pelosi why she has not brought unemployment benefits into the debate over the so-called fiscal cliff.

Pelosi said, “As far as the unemployment insurance is concerned, that is something that is really a safety net for our whole economy. It’s not just a safety net for individuals.  It’s a safety net for our economy.”

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“Our economy, our capitalist, free market economy is one that swings back and forth in terms of ups and downs,” Pelosi said.  “And when it is down, people have paid into an unemployment insurance program and then they have those benefits, which probably are one of the most important stimuli for the economy.”

She continued:  “The economists tell us that dollar-for-dollar there’s more demand injected into the economy by unemployment insurance than almost anything you can name, food stamps being another one of those.”

“Unemployment insurance, I think we always have to recognize, as an important safety net for the economy, for our system instead of just for an individual,” Pelosi said.

The Congressional Budget Office reported last week that federal and state unemployment insurance (UI) programs have cost $520 billion over the last 5 years, with a peak of 14.4 million Americans collecting UI benefits in 2009.

Aside from the fiscal cliff, Congress may negotiate extending the Emergency Unemployment Compensation program, which provides federal taxpayer money to “individuals who have exhausted regular state benefits,” and is set to expire on Jan. 2, 2013.

The CBO said that extending federal unemployment insurance again could cost taxpayers $30 billion.

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