Morning Plum: Fate of unemployment insurance hangs in the balance

The news of the morning, aside from continued discussion of Nelson Mandela’s passing, is that negotiators are close to a deal to replace the sequester with higher spending levels on domestic and defense programs — close to $1 trillion — for fiscal 2014. The deal would boost spending by increasing some fees, deferring the big arguments over whether to raise taxes and/or cut entitlements.

Unfortunately, an extension of unemployment benefits that are set to expire for at least 1.3 million people is currently not in the deal.

To put this in perspective, consider the following: If Congress really does punt on extending the Emergency Unemployment Compensation program, it will be the first time in many decades that it has failed to do so under conditions this bad for the jobless.

The White House has released a report on the need to extend these benefits, and you should look at the chart on page 9. It shows that at no point in the recent past has Congress allowed benefits to expire with the long term unemployment rate as high as it is now — 2.6 percent.

“It would be unprecedented for Congress not to extend emergency unemployment insurance under the current economic conditions,” Josh Drobnyk, a spokeman for Dem Rep. Sander Levin, who has been fighting for an extension, tells me.

Today’s monthly jobs report says the unemployment rate ticked down from 7.3 percent to 7.0 percent in November — a five year low. That may make it easier for Republicans not to agree to an extension. But this shouldn’t be the case. Because as the White House report shows, even if the unemployment rate has dropped, it is still higher right now than virtually every other time Congress has let the program expire (the exception is 1982, when the rate was 7.2 percent, barely more than it is now). Meanwhile, the report shows that there is plenty of precedent for jobless benefits being available with the unemployment rate below where it is now.

By all indications, Democrats — including Senator Patty Murray, who is negotiating the budget deal with Paul Ryan, and Nancy Pelosi, who is signaling Dems will resist any deal if benefits aren’t extended — will continue to fight for the extension. And the Republican position on this is increasingly bizarre. John Boehner has said this:

“If the president has a plan for extending unemployment, I’ll take a look at it.”

But the White House does have a plan. It’s called extending unemployment benefits. Democrats should continue fighting for it.

* A DECENT JOBS REPORT: Things are looking up a bit:

The unemployment rate declined from 7.3 percent to 7.0 percent in November, and total nonfarm payroll employment rose by 203,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in transportation and warehousing, health care, and manufacturing.

Revisions:

The change in total nonfarm payroll employment for September was revised from +163,000 to +175,000, and the change for October was revised from +204,000 to +200,000.

But as Brad Plumer also explains, improving conditions do not diminish the need to extend unemployment benefits, because we’re still looking at historically high numbers of long term unemployed, and those who lose benefits may simply drop out of the labor force.

* REPUBLICANS STRUGGLE TO CRAFT AGENDA FOR 2014: Paul Kane has a great piece on the internal arguments among Republicans over whether they should put forth a serious policy agenda next year, including an alternative to Obamacare, or just remain focused on repealing the health law. As Kane notes, Republicans were previously unable to pass a measure that would have increased cancer research for children:

If it is that hard to unify the GOP around fighting cancer in children, many Republican advisers fear that crafting a full alternative to the ACA will be impossible and merely lead to more divisions.

Yep. As of now, there is no GOP alternative to Obamacare that can pass the House, which means the de facto GOP position is to return to the old system.

* STUDY: OPTING OUT OF MEDICAID EXPANSION WILL COST STATES BILLIONS: A new study released by a pro-health reform group finds that states opting out of the Medicaid expansion will lose billions of dollars in federal funds:

By refusing to expand Medicaid, Texas will forgo $9.2 billion in federal funding in 2022, the authors said. Florida, another state that has said it won’t expand Medicaid, stands to lose more than $5 billion. Georgia, Missouri, North Carolina and Virginia will all forgo more than $2 billion in federal funding, while Louisiana, Oklahoma and Wisconsin will miss out on more than $1 billion. Both Tennessee and Indiana, two states that have yet to formally decide whether to expand the program, face losing more than $2 billion in federal funding if they decide against expansion.

This could help Dems use the Medicaid expansion as a weapon against GOP governors who have opted out, even as Republicans continue to be divided over it.

* VIEWS OF OBAMACARE DON’T BUDGE IN GALLUP POLLING: A new Gallup poll finds that despite the rocky rollout, views of Obamacare remain largely unchanged since 2011, with only 32 percent supporting full repeal of the law. While a total of 52 percent want it either repealed (32) or scaled back (20), the latter category is not defined, and could reflect overall disapproval of the law, which is of course very real and continues to pose a threat to Dems.

But the bottom line is that full repeal remains a minority position, and views of the law just haven’t changed much.

* DEMS HOLDING FIRM BEHIND HEALTH LAW: One other key number from the new Gallup poll: 65 percent of Democrats want to keep the law or expand it, while only 23 percent want to scale it back (17) or repeal it (6). This is in keeping with other recent polls finding that majorities of core Dem groups oppose repeal and still think the law can be made to work. It’s another reason why Dems should, and almost certainly will, stick with the law.

* ONLY REPUBLICANS SUPPORT FULL REPEAL: One last nugget from the Gallup poll: Republicans are the only group that shows a majority in favor of repeal (68 percent); meanwhile, only 29 percent of independents do. Similarly, a recent CNN poll found only Republicans think the law can now be pronounced a failure.

* AND YES, OBAMA’S INEQUALITY SPEECH WAS IMPORTANT: Paul Krugman has a great column spelling out why Obama’s big speech this week mattered: The President linked rising inequality to declining mobility; he cast it as the result of a range of wrongheaded policy priorities; and he reoriented the discussion away from deficits to the need for jobs, growth, and preservation of the safety net.

Now…we have the president of the United States breaking ranks, finally sounding like the progressive many of his supporters thought they were backing in 2008. This is going to change the discourse — and, eventually, I believe, actual policy. So don’t believe the cynics. This was an important speech by a president who can still make a very big difference.

As noted here, the speech will serve as a touchstone in an evolving argument over the need for the Democratic Party to embrace a truly progressive economic agenda to deal with these major challenges.

What else?

Also on The Plum Line

Happy Hour Roundup