Why the Senate Can't Cut Aid and Have Its Jobs, Too

| Thu Jul. 1, 2010 2:46 PM EDT

Millions of Americans are slated to lose their unemployment benefits next week, and millions more could lose their jobs due to state budget cuts—and it’s all the Senate’s fault. On Wednesday night, Democrats were unable to overcome a Republican-led filibuster of a bill that would extend unemployment benefits, which failed for the fourth time due to intransigent Senate moderates.

By the time members of Congress go home for July recess next week, nearly 2 million jobless Americans will be without assistance, threatening to put an even bigger damper on our economic recovery. And despite the claims from conservatives like Nevada Senate candidate Sharron Angle—who called jobless beneficiaries “spoiled” and insisted that “there are some jobs out there”—it’s clear that job growth, like the rest of the economy, has yet to recover from the recession.

Recent figures have shown that there are five jobseekers for every job available. And kicking those looking for work off the government dole won’t make more jobs magically appear. In fact, cutting back the stimulus is more likely to slow short-term growth than speed it up: Mark Zandi, chief economist at Moodys.com, has estimated that unemployment benefits generate $1.61 for every dollar spent. Economists from Goldman Sachs call the Senate’s inaction “an increasingly important risk to growth.” And the human cost of the cutbacks is quickly becoming clear. "I'm drowning," one unemployed 45-year-old woman told the Huffington Post, having recently discovered her benefits would be cut off. "I didn't get any warning...What do I do now?"

Compounding the problem is the massive budget cuts that states will be forced to enact if the Senate fails to take action. Last week, the Senate's earlier jobs’ bill—which included the unemployment benefit extension and Medicaid aid to state budgets—also failed, due to the same conservative fear-mongering about deficits. Most states are required to balance their budgets by law and were counting on the federal aid to help them after stimulus funds expire this year. Now nearly a million jobs could be chopped as a result of the state budget shortfalls, according to the Center for Budget and Policy Priorities.

Why are US lawmakers willing to wreak such havoc upon the economy and job-seeking Americans, who are largely unemployed through no fault of their own? The problem might be summed up as follows:

A recent Pew Research Center survey found that most Americans think that states should solve their budget crises without federal help. Paradoxically, however, most respondents also said they oppose reductions that would have to be made for states to balance their budgets.

So Americans don’t want state governments to lean on the feds to solve their fiscal woes. At the same time, they don’t want to suffer the consequences of the cutbacks that will result if the states do try to balance their budgets without federal help. (The New Republic’s Jonathan Chait points to the same schizophrenic dynamic among New Jersey voters.) But you can’t have it both ways in the current economy. And that’s a reality that both the American public and our dysfunctional Senate need to own up to.
 

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