Making Continuing Appropriations for Fiscal Year 2013

Floor Speech

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Mr. REED. Madam President, I appreciate the Senator from Texas coming here, engaging, and I appreciate the fact that he is making a point. But I am trying to make a point which I think is very compelling. Within a few days--December 28--1.3 million Americans will lose their extended Federal unemployment insurance benefits. It will be a tremendous trauma to those families, and it will be a huge impact for our economy going forward.

I have renewed my request for a full 1-year extension, and it has been objected to. I recognize that. But, I believe it is urgent we extend unemployment insurance benefits.

I also have been working closely with my Republican colleague, Senator Heller, on a bipartisan basis to introduce a bill to extend these benefits for 3 months, giving us the opportunity to go and take a more deliberate and careful review of the program and also to provide for a mechanism to extend the benefits for a full year.

I am very pleased we are beginning to build bipartisan support for this initiative for at least 3 months. It does reflect the fact that my colleagues from all across the country are recognizing the huge impact of this loss of benefits. This is not a problem that is restricted to a particular area of the country. Nevada has the highest rate in terms of unemployment numbers. Rhode Island trails behind, but not by much. We are at over 9 percent. But you have States with high unemployment throughout the country: Michigan at 9 percent, Illinois at 8.9 percent, Kentucky at 8.4 percent, Georgia at 8.1 percent, Arizona at 8.2 percent. These are States that have significant issues with respect to unemployment and need the continuation of this program to protect their families and also to provide stimulus for their local economies.

We have at this point in many of these places two unemployed workers for every available job. So this is not just a question of: ``The jobs are there. Just go get it.'' The job is not there. Also, we recognize--I think we all recognize--the skill sets that are increasingly in demand are some of the skill sets that mature workers--people who have been working for 20 years, who have been every day of their lives going to the office or going to the mill or going to the plant are now competing with 20-year-olds who have sophisticated information technology skills and other skills in a climate where manufacturing is becoming sophisticated. Every sort of enterprise seems to be much more sophisticated and demanding a higher level of skills than years ago. So this is a very difficult time for workers out of a job, and I believe in this difficult period of time we need to extend these benefits.

There is extensive research on unemployment insurance and the labor markets that also supports the point that people who are on unemployment insurance want to go back to work. This is a very sort of pragmatic insight. In Rhode Island, for example, the average benefit is $354 a week. For most workers, that is a fraction of what they were gaining in their job. They would love to be called back to work. They would love to find a job that fits their skills that is close to the pay they had or maybe less. But no one is getting this help and socking away a lot of money on their UI benefits.

Indeed, a recent report by the White House Council of Economic Advisers looks at the economic tradeoffs that are being faced. In their words:

In choosing the optimal unemployment insurance policy, policymakers must weigh competing costs and benefits. On the one hand, some argue that extending benefits may dull the incentives for unemployed workers to exert effort to search for another job, leading to increased unemployment--the so-called ``moral hazard'' effect. But on the other hand, providing benefits gives families income that can in the limit keep them from poverty but more generally can help them to finance a longer job search that might ultimately result in a job better matched with their talents, resulting in higher overall labor market productivity. .....

These are important aspects that have to be considered. I think the consensus of many in Congress is that this program is not only necessary and essential, but it also does not significantly inhibit the willingness, the ability, the desire of people to get back to work.

Raj Chetty is a noted economist who studies these issues. He concludes:

Nearly a dozen economic studies have analyzed this question by comparing unemployment rates in states that have extended unemployment benefits with those in states that do not . ..... These studies have uniformly found that a 10-week extension in unemployment benefits raises the average amount of time people spend out of work by at most one week. This simple, unassailable finding implies that policy makers can extend unemployment benefits to provide assistance to those out of work without substantially increasing unemployment rates.

That is the conclusion of a very well respected economist who has been looking at that issue for several years.

Once again, from the Council of Economic Advisers' report:

Finally, while economists have found only small disincentive effects of UI extensions, recent research shows that the effect of UI on job search behavior is even smaller in recessions as the moral hazard effect shrinks when jobs are scarce.

Let's get back to common sense. There are roughly two workers for every job. The benefits UI beneficiaries receive are a fraction of what they would get in the workplace. They want to get back into the workplace. The jobs are just not there. Frankly, we have not done enough, I would suggest, to put those jobs in place. We have to do more. But in the interim, we have to make sure these families have some benefits and some protection.

I am quite willing to work with my colleagues if there are changes that should be made, could be made. But we are facing this deadline. Unless we move--and I am disappointed we have not moved today--1.3 million people on December 28 lose their benefits. The checks will cease going out the following week, and our economy will take a hit next year of 200,000 jobs, about a 0.2-percent growth shrinkage in GDP. We can avoid that by moving today or moving tomorrow, certainly moving as soon as we get back, to make sure these benefits are in place.

With that, I yield the floor.

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