Nothing for the long-term unemployed in the Ryan-Murray budget deal | Arkansas Blog

Wednesday, December 11, 2013

Nothing for the long-term unemployed in the Ryan-Murray budget deal

Posted By on Wed, Dec 11, 2013 at 4:13 PM

long_term_unemployed.png
The modest budget deal between U.S. Reps Paul Ryan and Patty Murray is a small step forward for "sound governing and economic policy," writes Jonathan Cohn at the New Republic. Or as Neil Irwin at the Washington Post puts it, "The budget deal isn’t good for the economy. It’s less bad for the economy."   

The $85 billion deal softens the blow of sequestration in 2014 and 2015 and raises money via increases in various government fees (the big ones will hit air travelers and federal workers who will have to contribute more to their pensions). That said, more than 90 percent of the sequestration cuts remain in place (for example, the deal does nothing about the more than 50,000 slots lost at Head Start programs already because of sequestration). And the deal is silent on the long-term unemployed, more than one million of whom are slated to lose benefits at the end of the year. More on the issues surrounding the 4 million long-term unemployed Americans in this Washington Post interview with American Enterprise Institute economist Michael Strain. 

Matthew Yglesias at Slate despairs

The bad news is that the long-term unemployed are screwed.

In effect, when companies are looking to hire people, they scan through the résumés they get in the mail and their first step is to throw out all the résumés of people who've been unemployed for a long time. This is research based on pretty well-designed experiments that control for other variables beyond long-term unemployment. You should feel free to see that as a vile form of discrimination, or as a sensible business heuristic according to your temperament. The point is that the people who are about to lose UI benefits are not going to be able to find jobs. Not today, not after they lose benefits. In fact, they probably won't be able to find jobs ever.

Mailing unemployment insurance checks to people who aren't so much unemployed as unemployable is obviously not an ideal public policy. But simply doing nothing for them is cruel and insane. 

It will be interesting to see how Rep. Tom Cotton votes. Club for Growth, Heritage Action, and Americans for Prosperity have already slammed the deal as the treasonous stuff of RINOs, despite the fact that it represents a substantial victory for conservatives on spending (see chart below from Center for American Progress). 

Sen. Mark Pryor will presumably vote for it, as it's likely the best deal with any hope of passing the House. Still, it remains a woefully inadequate response to the problems the nation faces today. The Post's Irwin nails it: "[A]t a time of high unemployment, falling deficits and low interest rates, budget-cutting is still making the economy worse than it otherwise would be. But with this deal, Washington policy will be less counterproductive than it otherwise would be."

After the jump, here's the chart to bear in mind when the Cruz (and Cotton?) contingent labels the deal capitulation: 


click to enlarge murrayryanbudget.png

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