Tag Archives: COBRA

Recession Over? Some Americans Haven’t Gotten the Memo

In case you missed the news, the recession ended in 2009. Some members on a panel of economists are now disputing that fact, to the surprise from politicians and mainstream media who long ago declared the greatest economic crisis of our time dead and gone, and are merely bickering over precisely when it dropped off the twig: Was it in mid-2009? Before then? After? 

Of course, some people just refuse to get with the program, insisting that with a national unemployment rate hovering around 10 percent , the recession isn’t really over. And that for older people dependent on deep-sixed 401ks, it most likely will never be over. People who are unemployed and on food stamps don’t think it’s over. People underemployed and still looking for more work are not receiving any trickledown. And for those lucky enough to have been receiving unemployment insurance, who now find it running out and still can’t find a job, things don’t seem to have materially improved. 

The Center on Budget and Policy Priorities, the Washington,D.C.-based think tank with a liberal bent, recently released a report that offers a different slant on this subject: 

The long-term unemployment rate — the percentage of people in the work force who have been out of work for over half a year and are still looking for a job — reached an unprecedented 4.3 percent of the labor force in March (see the chart). Yet Congress has allowed the Recovery Act measures that provide additional weeks of unemployment benefits and subsidized COBRA health insurance coverage for unemployed workers to lapse. Opponents’ arguments that these measures should not be extended unless they are paid for with cuts in other spending do not withstand scrutiny. Meanwhile, delay imposes unnecessary hardship on the long-term unemployed and weakens the economic recovery. 

Although there are growing signs that the economy is in the early stages of a recovery, unemployment remains very high, and the economy is not running on all cylinders. Demand for goods and services remains far below what the economy is capable of producing, and the rate of job creation anticipated over the next several months will represent only a small start toward restoring the 8.2 million jobs lost since the recession started. (That loss essentially erased all of the jobs created between 2003 and 2007 in the economic recovery that followed the previous recession.) 

Sam Smith over at prorev.com calls attention to another factor reported by Air Force Times

Disturbing new statistics from the Labor Department show that one in three veterans under age 24 is unemployed – and that the unemployment rate for Iraq and Afghanistan veterans has jumped to 14.7 percent, half again as high as the national employment rate of 9.7 percent.The March unemployment rate of 30.2 percent for veterans aged 18 to 24 is a big jump from February’s figure of 21.7 percent, although it may be partly the result of a small sample used by the Labor Department in determining unemployment, said Justin Brown, a labor expert for Veterans of Foreign Wars. 

Then, there’s this from Black Agenda Report:

Official labor statistics show Black unemployment rose to 16.5 percent in March, up from 15.8 percent the month before, while white joblessness remained steady at 8.8 percent. At least a score of major Black population centers now register official unemployment levels nearing 25 percent, comparable to the depths of the Great Depression – and it took World War Two to pull the economy out of that pit.

With 5.5 job seekers for every actual job opening, according to the latest data, employers can discriminate in favor of whites to their hearts’ content, while continuing to lower wages and working conditions. It’s easy to casually fire Black people and even easier not to hire them. We will soon find out if a statistical “point of no return” in unemployment levels exists, from which communities cannot recover absent extraordinary assistance by a caring government.

Brother, Can You Spare a Tax Cut? Latest Version of Recovery Bill Cuts Help for Poor and Jobless

“If there’s anyone out there who still doesn’t believe this constitutes a full-blown crisis,” Barack Obama said last night in his first prime-time news conference, “I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don’t know where their next paycheck is coming from.” Yet it is precisely those Americans who’ve lost out in the Senate’s compromise version of the economic stimulus package, which is scheduled for a vote today. For the sake of securing three Republican votes and a filibuster-proof majority, Senate Democrats have agreed to jettison some of the most vital and most progressive elements of the Recovery and Reinvestment Act–and with them, the lifeline it offered to millions of poor and unemployed Americans.

Obama last night was clearly exasperated, taking some oblique shots at Republican resistance to the plan. Yet the president appears resigned to the Senate compromise, saying over the weekend, “We can’t afford to make perfect the enemy of the absolutely necessary.” Only in the next few days, as the Senate, the House, and the administration hammer out final legislation, will we learn to what extent expediency and lingering fantasies of bipartisanship trump any vision of the federal government as a place its most vulnerable citizens can once again turn to for help.

A bottom-line issue in this economic crisis is whether the government will help provide the unemployed with the most basic necessities of life: food, shelter, and health care. The ranks of jobless Americans have swelled by more than 50 percent in the last year, to 11.6 million. The official rate of 7.6 percent accounts only for the recently unemployed; by a broader measure that includes people who have stopped looking for work or can’t find full-time jobs, it jumps to a sobering 13.9 percent.  Job losses have plunged millions of families into economic insecurity–where they join the working poor and the elderly and disabled poor, whose incomes are already lower than the unemployment benefits of many middle-class people. Beyond these essential stop-gap measures, of course, what these people really need are jobs.

Obama’s original proposal dealt with many of these needs head-on, with a bigger food stamp program, voucher programs and direct government refinancing to prevent foreclosures, and federal funding for COBRA and an expanded Medicaid program, to keep the unemployed from slipping into the widening pool of the uninsured: food, shelter, and health care. Key to all this was increased funding to state governments, whose budgets are now on the verge of catastrophic collapse. More money to the states means social service programs can continue to function, even expand to meet the strains of the crisis. Two weeks ago, I was even inspired to write: “With this package, Obama begins the process of reversing cutbacks initiated by Reagan and carried forward by the two Bushes, with some help from Clinton’s welfare ‘reform.'” On January 28, the House passed the legislation with its most important components intact. But as the Senate has now shown, reports of the death of trickle-down economics seem to have been greatly exaggerated.

The Senate version of the stimulus plan reduces monies already approved in the House for the states, by a crushing $40 billion. Both plans extend unemployment benefits, but the expansion of Medicaid to the unemployed-which could have been a lifesaver for millions of families–is absent from the Senate bill. The subsidies for COBRA have been cut back, as have the increases in food stamps,  and funds for school construction, early education, and environmental cleanup. And according to the Center for American Progress, the compromise would create between 430,000 and 538,000 fewer jobs than the House-passed bill.”

The Senate bill preserves and elevates the revered conservative approach to economic stimulus: tax cuts and more tax cuts, which aren’t much use to the destitute. Obama had already offered up an excess of tax cuts in pursuit of the elusive bipartisanship, but the Senate added more cuts (the AMT “patch,” a homebuyer’s credit, and business write-offs) destined to benefit only those with higher incomes.

In addition to leaving the needy to fend for themselves, the Senate package is considerably less likely to be effective. Washington has long known that the swiftest way out of an economic stagnation like this one is to put money immediately into the hands of people who will spend it on goods and services. Tax cuts, by comparison, are slow to take effect, if they work at all–especially if they benefit the well-off, who are just as likely to keep the money in their pockets.

If Obama supports this compromised Senate version of the Recovery and Reinvestment Act, rather than rallying his progressive base and exposing the Republicans as obstructionists, he will lose moral and political authority. He could also begin to look not only like the cautious centrist Democrat that he is, but like just another triangulator in the fashion of the Democratic Leadership Council–a particular form of slime that I hoped was at long last being sluiced out of the Washington swamp.

Obama’s Lifeline: For a Change, Government Spending That Actually Helps the People Who Need It Most

Republicans took to the Sunday morning news shows to express their “concern” about parts of the stimulus package presented by the Obama administration last week. House Minority Leader John Boehner declared that he would vote no “if it’s the plan I see today”–a pretty idle threat, since even if he takes his entire party with him, the Democrats still have nearly an 80-vote margin. In the Senate, however, two Republican votes are needed to create a filibuster-proof majority, which might at least slow the package down and could force some compromises.

There’s good reason for the Republican resistance. While it makes numerous concessions to favored conservative approaches–lots of public-private partnerships that will allow the private sector to cash in, tax cuts for businesses and the middle class, and no immediate end to the Bush tax cuts (which will expire on their own in 2010)-the $820 billion stimulus package also includes some dramatic increases in support for the nation’s social welfare programs.

With this package, Obama begins the process of reversing cutbacks initiated by Reagan and carried forward by the two Bushes, with some help from Clinton’s welfare “reform.” There may still be plenty of holes, but with this plan, the new government confirms that has some responsibility for providing a safety net for its poor and disabled, its children and elderly. To see the magnitude of the shift, it is only necessary to glance at the last budget drawn up by President Bush, for fiscal year 2009: In the midst of the growing recession, it had yet more cuts to the social welfare system, reducing already inadequate health and feeding programs for the most vulnerable Americans.

Here are some of Obama’s initiatives–not quite the New Deal, but quite a new deal compared to what we’ve grown used to over the past 30 years:

  • As unemployment grows, more and more people lose their health insurance and turn to Medicaid. State budgets already are in desperate straits, and can’t possibly shoulder this added burden. Obama would pump federal money into state Medicaid budgets as well into the program providing for health insurance for children.
  • In addition, Obama wants to shore up existing health insurance coverage for people losing jobs by extending COBRA and underwriting part of its cost through tax rebates. COBRA is a program that enables people losing their jobs to continue their health insurance if they pay for it. Obama wants the federal government to partially subsidize these payments, and also gives some low-income unemployed people access to Medicaid.
  • The president’s plan proposes to extend unemployment benefits through December 2009 and increase weekly unemployment insurance benefits by $25.
  • The stimulus package would incresasing food stamp benefits for the 30 million people now in the program, and provide support for food banks, school lunch programs, and the WIC program that provides for mothers and infants.
  • Obama’s plan would give 7.5 million blind, disabled, and aged Americans an immediate $450 by increasing-on a temporary basis–Supplemental Security Income (SSI) benefits.