Pelosi: Tack cost of more unemployment benefits onto deficit

Democrats have already signaled their first fight for the new year — trying to extend unemployment benefits for the long-term jobless for the 12th time since the economic downturn began and saying it’s a test of the income inequality campaign message they’ll use in this year’s elections.

As many as 1.3 million people will lose benefits on Saturday, when enhanced benefits expire, and Democrats said it was callous of the GOP not to extend the payments as part of this month’s budget deal.

“We have an emergency here right now. The check is not in the mail,” House Minority Leader Nancy Pelosi said Monday as she urged action.

But Republican leaders have said they will not consider any extension that adds to the deficit.

Just before the House shut down for a three-week vacation earlier this month, Speaker John A. Boehner told reporters that the White House didn’t even ask about including unemployment benefits in the budget deal until the last minute.

“I said that we would clearly consider it as long as it’s paid for and as long as there are other efforts that’ll help get our economy moving once again,” Mr. Boehner said. “I have not seen a plan from the White House that meets those standards.”

Republicans say their preferred answer would be to focus on cutting government regulations to free up businesses to create jobs, which they said would lower the unemployment rate and make a benefit extension unnecessary.

As of earlier this month, there were nearly 3 million persons claiming regular unemployment insurance benefits, and about 1.3 million more who were collecting enhanced benefits, which provides extra federally-funded benefits for those who have been out of a job so long they’ve exhausted their state-supported benefits.

At one point those benefits stretched to nearly two years of coverage, but Democrats said as the economy has improved the maximum has been reduced to an average of about 54 weeks.

Underlying the fight over unemployment is a gamble on how strong the economy is.

The number of Americans claiming the enhanced benefits has dropped steadily, from more than 1.5 million in July, but Democrats said that the economy remains too weak to cut off benefits altogether.

Rep. Jan Schakowsky, Illinois Democrat, said the long-term unemployment rate is 2.6 percent, which is twice the rate it’s been in the past when enhanced benefits have been allowed to expire.

“So we know that we’re making progress in general in moving out of the Great Recession, but the unemployment situation is still bleak for many,” she said. “In the past, numbers like today’s would have guaranteed action is being taken.”

But given the difficulties of finding fee increases and spending cuts to offset some of the budget sequesters in this month’s deal, it will be difficult to reach an agreement on something that could add another $25 billion — the cost of a yearlong extension of benefits — to the deficit.

Mrs. Pelosi said she’s comfortable adding that money to the deficit, saying that’s always been done in the past.

But the GOP says the times have changed and, with Republicans controlling the House, they can block action.

Senate Majority Leader Harry Reid, Nevada Democrat, isn’t going to wait. He has said he’ll force a vote on a three-month extension as one of the first votes when the Senate returns in January.

That bill is sponsored by a Republican and a Democrat, signaling at least some bipartisan support for action without regard to the deficit.