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Harkin hopeful unemployment extension will pass tonight
Another vote on a bill to extend federal unemployment insurance benefits for the long-term unemployed may come to the floor of the Senate as early as Thursday night, according to U.S. Sen. Tom Harkin, D-Iowa.
“I hope that we can get this done — we only missed it by one vote yesterday — I hope we can pass it tonight before we go home for the 4th of July,” Harkin said early Thursday during a conference call with reporters.
The final Wednesday night tally on the $34 billion bill was 58 to 38, after Senate Majority Leader Harry Reid, D-Nev., switch his vote to “no” to allow the measure to be reintroduced. Republicans as well as a handful of moderate Democrats voiced opposition to the bill because it was not offset and would increase the national deficit.
Such opposition, Harkin said, doesn’t make sense in light of the current recession.
“Moody’s Analytics says that the biggest bang for the buck we can get for government spending during a recession is food stamps because people spend that money right away. Second only to that are unemployment insurance benefits,” Harkin said.
The Moodys.com study he’s referring to from earlier this year found that extending unemployment benefits generates $1.63 in economic activity for every $1 spent by the government.
“[P]eople are using the money to make their house payments, car payments, buy clothing, buy food, get their kids in school, pay medical bills and all of those kinds of things. It simply spins around a lot in the economy,” Harkin said.
“Quite frankly, the worst thing I think we can do in the recession that we are in right now is to not extend unemployment insurance benefits. That will drag the economy down every further.”
Caution in relation to the deficit was heightened this week when the Congressional Budget Office released its long-term budget outlook, noting that the federal government has been “recording the largest budget deficits, as a share of the economy, since the end of World War II.” While Harkin acknowledges that the bill, as written, would increase the deficit, he also notes his belief that the alternative would offer far worse immediate economic harm and the perceived hypocrisy of some in Congress.
“We just did a change in the way we pay for this financial services bill that allows some of the big hedge funds off the hook, but it increases the deficit. So, for a lot of people here in the Senate, it is okay to increase the deficit to help the hedge funds, but it is not okay to increase the deficit to help those who are unemployed,” he said.
Harkin also expressed dismay over recent news reports that U.S. businesses and banks are holding onto large cash balances instead of reinvesting them.
“I just saw a report … that businesses in this country right now are hording over $1.8 trillion in cash. They are not investing. They are not loaning. They are putting in new equipment or hiring new workers,” he said.
“Some really tough questions have got to be asked of the business community in this country as to why they are holding on to all of that money without investing it and starting to invest in new technologies, renewable energy systems — all the things that put people to work and which we need in this country. At the same time they have all of this money, the length of time for people being unemployed is longer than at any other time since we started measuring in 1948.”